CMS Announces Final FY 2025 Hospice Payment Rate Updates
On July 30, 2024, the Centers for Medicare & Medicaid Services (CMS) released its final rule for hospice payment rates for fiscal year 2025. The update features a 2.9% overall increase from FY 2024, combining a 3.4% market basket adjustment with a 0.5 percentage point productivity reduction. Consequently, the hospice payment cap will rise from $33,494.01 to $34,465.34. The rule also includes the adoption of the latest Office of Management and Budget (OMB) statistical area delineations, impacting the wage index for some providers. Additionally, CMS is introducing a new patient-level data collection tool to replace the current Hospice Item Set and will add two new process measures starting in FY 2028.
This update introduces several key changes, including:
Payment Rate Changes
Increase:
Hospices will see a 2.9% payment increase for FY 2025, translating to an estimated $790 million boost from FY 2024. This rate adjustment combines a 3.4% increase in the inpatient hospital market basket with a 0.5 percentage point productivity adjustment.
Non-Compliance Penalty:
Hospices failing to submit required quality data will face a reduced update of -1.1%.
Cap Amount:
The aggregate cap for FY 2025 is set at $34,465.34, up from $33,494.01 in FY 2024, reflecting the 2.9% increase.
Geographic Wage Index Adjustments
OMB Statistical Areas:
The rule finalizes the adoption of the latest Office of Management and Budget (OMB) statistical area delineations, revising the core-based statistical areas based on the 2020 Census. A 5% cap will limit any reduction in a hospice’s wage index due to geographic changes.
Quality Reporting and Data Collection
New Tool:
The Hospice Outcomes and Patient Evaluation (HOPE) tool will replace the Hospice Item Set (HIS) starting FY 2025. HOPE will collect comprehensive patient-level data throughout the hospice stay, improving the depth and accuracy of quality measures.
New Measures:
Two new process measures—Timely Follow-up for Pain Impact and Timely Follow-up for Non-Pain Symptom Impact—will be introduced, beginning in FY 2028.
Survey and Reporting Enhancements
CAHPS Survey Updates:
Changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey include a new web-mail survey mode, a simplified format, and an extended survey period. New measures on Care Preferences and revised existing measures will also be implemented.
Special Focus Program:
The CMS Hospice Special Focus Program (SFP) will continue to monitor and oversee hospices identified as poor performers based on specific quality indicators.
Technical Updates
Conditions of Participation (CoPs):
Technical updates clarify roles related to the certification of terminal illness and patient admission. The rule aligns the CoPs with payment regulations, updating language to ensure clarity and consistency.
The final rule can be viewed at the Federal Register at: https://www.federalregister.gov/public-inspection.
For further information, see the hospice webpage here: http://www.cms.gov/Center/Provider-Type/Hospice-Center.html.