Hospice FY2021 Final Rule Issued

Mary Madison, RN, RAC-CT, CDP
Clinical Consultant ā€“ Briggs Healthcare

On July 31, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a final rule CMS-1733-F      that updates fiscal year (FY) 2021 Medicare payment rates and the wage index for hospices serving Medicare beneficiaries. CMS is publishing this final rule consistent with the legal requirements to update Medicare payment policies for hospices on an annual basis. In recognition of the significant impact of the COVID-19 public health emergency, and limited capacity of health care providers to review and provide comment on extensive proposals, CMS has limited annual hospice rulemaking required by statute to essential policies, including Medicare payment to hospices, as well as policies that reduce provider burden and may help providers in the COVID-19 response.

This final rule updates the hospice payment rates and cap amount for FY 2021. This rule finalizes the adoption of the revised Office of Management and Budget (OMB) statistical area delineations and applies a 5 percent cap on wage index decreases from FY 2020 to FY 2021. Finally, in conjunction with this final rule, CMS is providing examples on a CMS website of the hospice election statement and the hospice election statement addendum to reflect the changes finalized in the FY 2020 hospice final rule, effective October 1, 2020.

For FY 2021, hospice payment rates are updated by the market basket percentage increase of 2.4% or $540 million.  Hospices that fail to meet quality reporting requirements receive a 2% point reduction to the annual market basket percentage increase for the year. The hospice payment system includes a statutory aggregate cap. The aggregate cap limits the overall payments made to a hospice annually. The final hospice cap amount for the FY 2021 cap year is $30,683.93, which is equal to the FY 2020 cap amount ($29,964.78) updated by the final FY 2021 hospice payment update percentage of 2.4%.

CMS is providing links to updated examples of the hospice election statement and the hospice election statement addendum that reflect the changes finalized in the FY 2020 hospice final rule (84 FR 38520) in order to assist hospices in understanding the content requirements for the hospice election statement and addendum, effective October 1, 2020. These requirements were finalized in order to increase coverage transparency for beneficiaries electing the Medicare hospice benefit.

Here are additional pieces of information related to the final rule:

FY 2021 Final Hospice Wage Index (ZIP)

Model Hospice Election Statement – Modified July 2020 (PDF)

Model Hospice Election Statement Addendum – Modified July 2020 (PDF)