CMS Proposed Changes to Hospice Cap Calculations

CMS has released its FY 2015 Hospice Wage Index which includes payment reform and changes to the hopsice cap calculation. 

The SheppardMullin Hospice Law Blog has analyzed the proposed changes and find that hospices could “experience a decline revenue of between 3-5% almost immediately.” While these changes could be disruptive, they could also move the industry towards a better, fairer system: 

One potential benefit of this adjustment will be that the hospice industry may finally have to stop targeting cap hospices and instead acknowledge the basic structural challenge of running a program with uncertain life expectancy.  CMS criticizes live discharges, perhaps rightly, but then blames hospices for long stays, failing to acknowledge the complexity of life expectancy and terminal illness.

Changes in the hospice cap calculation include: 

CMS proposes to reset the cap accounting year to match the Federal government fiscal year, October 1 through following September 30.  This change would be made in calendar 2017 by ending the FY 2017 cap year on September 30 (a month early) and starting the FY 2018 cap year on October 1 (instead of October 31 and November 1 under the current structure, respectively).

The purpose appears to be to align the cap year to the hospice reimbursement adjustment (starts 10/1 each year). 

The full article can be found here