The 2022 Hospice Payment Rate Update Final Rule

On July 29, 2021, CMS issued a final rule (CMS-1754-F) that updates Medicare hospice payments and the aggregate cap amount for FY 2022. This rule rebases the hospice labor shares and clarifies certain aspects of the hospice election statement addendum requirements. In addition, this rule finalizes changes to the Hospice Conditions of Participation (CoPs) and Hospice Quality Reporting Program (HQRP). The final rule also finalizes a Home Health Quality Reporting Program (HH QRP) policy that becomes effective on October 1, 2021, to prepare for public reporting beginning in January 2022.

The final rule (CMS-1754-F) can be downloaded from the Federal Register by clicking here.

FY 2022 Routine Annual Rate Setting Changes

Under the final rule, the hospices would see a 2.0 percent increase ($480 million) in their payments for FY 2022 relative to FY 2021. This is a result of the 2.7 percent market basket percentage increase reduced by a 0.7 percentage point productivity adjustment. Hospices that fail to meet quality reporting requirements receive a 2 percentage point reduction to the annual hospice payment update percentage increase for the year.

The FY 2022 hospice payment updates also include an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made to a hospice annually. The cap amount for FY 2022 is $31,297.61 (FY 2021 cap amount of $30,683.93 increased by 2.0 percent). As a result of the changes mandated by the Consolidated Appropriations Act, 2021 (CAA 2021), this rule finalizes the extension of the years that the cap amount is updated by the hospice payment update percentage rather than the consumer price index.

Other Medicare Hospice Payment Policies

This final rule rebases and revises the labor shares for all four levels of care: routine home care, continuous home care, inpatient respite care, and general inpatient care based on the compensation cost weights for each level of care from the 2018 Medicare cost report data for freestanding hospices. The final FY 2022 labor shares are 66.0 percent for routine home care, 75.2 percent for continuous home care, 61.0 percent for inpatient respite care, and 63.5 percent for general inpatient care.

Hospice Quality Reporting Program

As a result of this rule, the HQRP will contain four quality measures that capture care across the hospice stay, including a new measure called the Hospice Care Index. This measure includes 10 indicators of quality that are calculated from claims data. Collectively, the indicators represent different aspects of hospice care and provide a comprehensive characterization of the quality of care furnished by a hospice throughout the stay. This claims-based measure will be publicly reported no earlier than May 2022.

This rule also finalizes the addition of the Consumer Assessment of Healthcare Providers and Systems (CAHPS┬«) Hospice Survey Star ratings on Care Compare. Star ratings benefit the public in that they can be easier for some to understand than absolute measure scores, and they make comparisons between hospices more straightforward.

Additionally, the rule finalizes the addition of the claims-based Hospice Visits in the Last Days of Life (HVLDL) measure for public reporting, which supports patient empowerment and transparency of hospice performance. The claims-based measures will utilize eight quarters of data in order to have a larger population for publicly report on small providers, thereby more hospices will be available for consumers to compare. This rule also removes seven individual Hospice Item Set (HIS) measures because a more broadly applicable measure, the Hospice Comprehensive Assessment Measure (NQF # 3235), for the particular topic is available and already publicly reported. This measure helps to ensure all hospice patients receive a holistic comprehensive assessment. Finally, CMS is providing updates regarding its development of a new Hospice Outcome and Patient Evaluation (HOPE) assessment instrument.

For more information on other changes in the 2022 Hospice Final Rule, view the CMS Fact Sheet by clicking here.