FYI: FY 2015 Hospice Wage Index Final Rule

The Least That You Need to Know

The advance copy of the FY2015 Hospice Wage Index final rule was released on August 4, 2014 and, for readers familiar with the proposed rules, contains no surprises. This FYI provides brief information on the individual sections and addresses the new regulations that will require the most planning and preparation: submission of the notice of election and notice of termination/revocation forms within defined timeframes and changes regarding identification of the attending physician at time of election and whenever there is a change. The implementation date for changes is October 1, 2014.

Links to Information

Word Version - linda will send

Additional Information

This final rule rolled out pretty much as anticipated. There are some specific regulatory changes – we’ll get to those in the summary below – butit also feels as if CMS may be using these proposed and final rules to create reference documents from which they can quote over the coming years to support the changes, including an expansion of the coverage requirements, that they would like to make. It is important to read it though; there is interesting and important information in it that will guide the Prudent Hospice in on-going internal monitors and audits.

Section / Final Rule Action / Pages / Comments
III.A / Hospice Payment Reform: Research and Analyses / None / 25-37 / Essentially unchanged from the proposed rule material. Details data obtained as part of hospice payment reform, some of which is raises concerns. If you did not read it in the proposed rule, read it now.
III.B / Solicitation of Comments on Definition of “Terminal Illness” and “Related Conditions” / None / 37-47 / CMS continues to try make the case that anything and everything is related to the terminal illness and related conditions. Although they requested comments they do not share any that were received; rather they state that they “will consider the comments and the issues raised for possible future rulemaking.” It’s pretty much a rehash of what they said in the proposed rule.
III.C / Guidance on Determining Beneficiaries’ Eligibility for Hospice / None / 48-50 / Essentially unchanged from the proposed rule material. A reminder of resources available to assist in determining eligibility and a reminder to discharge if it’s determined that the beneficiary is no longer eligible.
III.D / Timeframe for Hospice Cap Determinations and Overpayment Remittances / New Regulation: Change in Cap Calculation Process and Timeframe / 50-57 / Each hospice is subject to a Medicare payment limitation – the aggregate patient cap – which limits the total aggregate payment an individual hospice can receive in a year. This cap has been in place since the beginning of the hospice Medicare benefit and was intended to protect Medicare from spending more on hospice care than it would have on conventional care.
Currently, cap determination is completed by the Medicare Administrative Contractors (MACs) 16 – 24 months following the cap year; demand letters are then delivered to those hospices that have exceeded the cap. As the number hospices exceeding cap has increased (11.6% in 2012), CMS has expressed concerns that Medicare Trust Funds were not being adequately safeguarded when there is such a long lag time and, as a result, proposed a new cap reporting system which has not been finalized.
The final rule amends §418.308 with the following changes for the 2014 and all subsequent cap years.
Hospices will be required to
  1. Submit self-determined aggregate cap determination 5 months after the end of the cap year (although they must wait at least 3 months until after end of the cap year to do so in order to include a reasonable # of claims)
  2. Refund any overpayment with the filed cap determination
Hospices failing to complete and file the required information will have their payments suspended until it has been filed.
III.E / Timeframe for Filing the Notice of Election & Notice of Termination/Revocation / New Regulation: Time Frames for Filing NOEs and NOTRs / 57-66 / Added the requirement that a hospice file the NOE (notice of election) with 5 calendar days after the election for forfeit payment from the start of the election until the date the NOE is filed. Certain limited exclusions will apply.
Also added the requirement that a hospice file a NOTR (notice of termination / revocation within 5 days of leaving hospice care. No financial penalties for this one.
These were both expected; it was a slight reprieve as the proposed rule used a 3-day timeframe. Full details and implementation guidance will come to you the week of 8/18.
III.F / Addition of the Attending Physician to the Hospice Election Form / New Regulation: Identification of Attending Physician at Time of Election and with Any Change / 66-74 / This made it from the proposed to the final rule without changes. As of October 1st, Medicare election statements will need to be expanded to include the beneficiary’s choice of an attending physician and an acknowledgement that the identified physician was his or her choice. Changes in attendings will require completion of a form similar to the current transfer of hospice form. Full details and implementation guidance will come to you the week of 8/18.
III.G / FY 2015 Hospice Wage Index and Rates Update / Implements Wage Index as Discussed / 74-83 / After the various adjustments, the FY 2015 national hospice rates will increase a net 1.3% (to calculate rates for specific locations see wage index information for rural and urban areas at
The hospice aggregate cap amount for the 2014 cap year: $26,725.79.
III.H / Updates to the Hospice Quality Reporting Program / New Regulation:
Hospice Quality Reporting Program / 83-110 / It’s the roadmap that has been laid out over the past few years. Nothing new has been added – the only action here is to add the specific requirements to the regulatory language at §418.312. Full details of this the week of 8/25.

The Actions of the Prudent Hospice™

  1. Read the document. Some of you will want to (and probably already have) read it in its entirety; others may only need selected parts. Regardless of your role, the more you read the better off you will be; every time you read this type of material your regulatory competence increases. You’ll find the accompanying Word document version easier to read and work with – you can add notes, highlight, etc. to your heart’s content.
  1. Get ready to roll up your sleeves and get down to work on the NOE, NOTR and the attending physician changes next week. Those of you who have already started are ahead of the game. Remember that the implementation date is October 1, 2014. To read the actual language that will be added to the hospice regulations go to the end of the Word document.
  1. Make sure that someone in your finance department knows how to access the PS&R and knows how to use it to calculate cap. Specific instructions on the actual reporting process and requirements will be coming from the MACs closer to the reporting time.