Patient and Nurse

The Centers for Medicare & Medicaid Services (CMS) recently issued the final rule for fiscal year (FY) 2019—effective October 1, 2018—which addresses hospice payment rates, hospice wage index updates and hospice cap amounts. The final rule also incorporates changes for reporting of drugs and durable medical equipment (DME), physician assistant designation modifications and changes to the Hospice Quality Reporting Program. The changes resulting from the final rule’s issuance are outlined below. For FY 2019, CMS estimates this ruling will result in an increase in hospice payments of approximately $340 million.

Hospice Payment Rates & Wage Index Update

Hospice payments will increase 1.8 percent in 2019. The full 1.8 percent increase is calculated based on the hospital market basket adjustment of 2.9 percent, less a required 2017 Affordable Care Act (ACA) estimated productivity adjustment of 0.8 percent and an additional ACA reduction of 0.3 percent. Hospices that don’t meet quality reporting requirements are subject to a 2 percent reduction in payments. In addition, all payments continue to be subject to the 2 percent sequestration reduction.

While the rate increase in the final rule is encouraging for the industry, not all hospices will experience an increase in rates due to changes in the wage index adjustment. You can find the updated payment rates for all core-based statistical areas on our website.

Hospice Cap

The hospice aggregate cap amount was updated for the 2018 and 2019 cap years. For 2018, the cap limit is $28,689.04 and for 2019, it’s $29,205.44. In addition, as outlined in previous rulings, the cap year will now run from October 1 through September 30. This new ruling made a technical correction to define this period as the “cap period” rather than defining the period by month and day.

Drugs & DME Claims Reporting

To reduce the reporting burdens on hospice providers, in April 2018 CMS modified the requirements for reporting drugs and DME on claims to allow for reporting an aggregated total charge rather than detailed line items. In the final payment rule, CMS clarified that providers may use either the detailed line item methodology or the summarized methodology; however, CMS encourages providers to choose one consistent method for reporting drugs and DME.

Physician Assistants

The rule finalizes provisions to hospice regulations to reflect that physician assistants may serve as the designated attending physician for hospice patients. However, physician assistants may not:

  • Serve as medical directors

  • Lead an interdisciplinary team

  • However, a physician assistant may participate on the team

  • Certify terminal illness of a patient

  • Perform the hospice face-to-face encounter

While CMS does permit physician assistants to serve as a designated attending physician, hospices need to be mindful that some states don’t allow this practice. If a hospice is located in a state where physician assistants aren’t permitted to serve as the attending physician, the state law or regulation applies.

Electronic Data Submission

CMS revised the quarterly data review and correction time for health information system (HIS) data submissions. Providers will now have four and a half months after the end of a calendar quarter to review and correct HIS data submissions. After this time period, data will be frozen and posted to the CMS Hospice Compare website.


CMS proposed the continuation of several items in the Consumer Assessment of Healthcare Providers and Systems (CAHPS). After reviewing comments to the proposal, CMS decided to continue:

  • Treating the preferred language of the caregiver as a recommended variable

  • Requiring CMS-approved vendors to perform CAHPS surveys using one of the three approved modes

  • Reporting eight quarters of hospice data on Hospice Compare

Also under CAHPS, CMS decided to finalize the following in the final rule:

  • Exempt small hospices from data collection

  • Exempt new hospices from data collection and reporting for CAHPS surveys

Cost Report Data

CMS evaluated data from cost reports under the new cost report criteria for reporting years on or after October 1, 2014. Industry subgroups were consulted, and some additional Level 1 edits were recommended. However, those recommended Level 1 edits would result in rejection of close to 66 percent of hospice cost reports. CMS did issue some additional Level 1 edits for reporting periods on or after December 31, 2017, and will continue reviewing hospice cost report data to determine if additional reform changes are needed. The cost report edits issued can be viewed on the CMS website.

Hospice agencies should review the final rule and evaluate the potential effect it may have on their organizations. Review the final rule on the Federal Register website.

In addition, be sure to review the associated Change Request.

For further information, contact Eimee or your trusted BKD advisor.

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