Hospice:
WAGE INDEX CUT THREATENS HOSPICE PROVIDERS
Published on Tue Apr 01, 2008
Industry decries proposed 5 percent reduction to Medicare reimbursement.
The Medicare hospice benefit's significant growth has caught the eye of policy-makers, and now providers and beneficiaries will pay the price for attracting such notice.
The Centers for Medicare & Medicaid Services wants to eliminate hospices' budget neutrality adjustment factor (BNAF), according to a proposed rule in the May 1 Federal Register. That change will cut 4 to 5 percent from Medicare hospice spending over three years, notes the National Association for Home Care & Hospice.
How it will work: CMS proposes phasing out the BNAF by 25 percent in 2009, 75 percent in 2010 and completely in 2011, according to the proposed rule. That would translate to a 1.5 percent decrease to wage index in 2009, 3 percent in 2010 and another 1.5 percent in 2011, CMS explains.
The current BNAF is "clearly obsolete," CMS maintains in the rule. It's based on outdated data that is artificially high, the feds say. CMS and a provider group agreed on the BNAF when CMS revised hospice wage index methodology in 1997.
"Continuation of this excess payment can no longer be justified," the agency argues in the rule. Hospices have had plenty of time to adjust to the new wage index and no longer need this adjustment, CMS says.
The impact: The wage index reductions will result in a 1.1 percent decrease to Medicare hospice spending in 2009, CMS estimates. If an inflation update of 3 percent occurs, hospices will see a 1.9 percent increase overall in payment rates.
The other shoe: But that inflation update is far from assured. President Bush proposed in his 2009 budget to eliminate the hospice market basket update altogether (see Eli's HCW, Vol. XVII, No. 6). And recent discussions by the Medicare Payment Advisory Commission on startling hospice growth may spur lawmakers to adopt the hospice reimbursement rate freeze.
"The President's budget includes a proposal for a zero percent payment update for hospices in FY 2009," CMS cautions in the rule. The final rule will have "to reflect any legislation that the Congress might enact which would affect the market basket update."
And another thing: Hospices also should watch out for an even quicker implementation of the BNAF phase-out. After comments, the final rule may specify that "a more aggressive phase-out alternative ... is more appropriate," CMS warns. For instance, beginning with a 50 percent phase-out instead of the proposed 25 percent. CMS Shoots Itself In The Foot The hospice industry has been quick to condemn the proposed cuts. They are "a backdoor way for CMS to cut rates to hospices," Judi Lund Person with the National Hospice and Palliative Care Association tells Eli.
President Bush included the measure in his array of cost-cutting measures for home [...]
