Hospice Payment Rate Update: FY 2022 Final Rule Posted

Mary Madison, RN, RAC-CT, CDP 
Clinical Consultant – Briggs Healthcare

Late afternoon on Thursday, July 29, 2021, CMS issued a final rule that updates Medicare hospice payments and the aggregate cap amount for Fiscal Year (FY) 2022 in accordance with existing statutory and regulatory requirements. This rule rebases the hospice labor shares and clarifies certain aspects of the hospice election statement addendum requirements. In addition, this rule finalizes changes to the Hospice conditions of participation and Hospice Quality Reporting Program (HQRP). The final rule also finalizes a Home Health Quality Reporting Program policy that becomes effective on October 1, 2021, to prepare for public reporting beginning in January 2022.

Under the final rule, the hospices would see a 2.0 percent increase ($480 million) in their payments for FY 2022 relative to FY 2021. This is a result of the 2.7 percent market basket percentage increase reduced by a 0.7 percentage point productivity adjustment. Hospices that fail to meet quality reporting requirements receive a 2-percentage point reduction to the annual hospice payment update percentage increase for the year.

The FY 2022 hospice payment updates also include an update to the statutory aggregate cap amount, which limits the overall payments per patient that are made to a hospice annually. The cap amount for FY 2022 is $31,297.61 (FY 2021 cap amount of $30,683.93 increased by 2.0 percent). As a result of the changes mandated by Division CC, section 404 of the Consolidated Appropriations Act, 2021 (CAA 2021), this rule finalizes conforming regulation text changes at § 418.309 to reflect the new language added to section 1814(i)(2)(B) of the Act, which extends the years that the cap amount is updated by the hospice payment update percentage rather than the consumer price index.

The final rule (226 pages) also includes:

  • Other Medicare hospice payment policies
  • Closing the Health Equity Gap in the HQRP – Request for Information (RFI)
  • Fast Healthcare Interoperability Resources in Support of the HQRP – RFI
  • Changes to Hospice Conditions of Participation (CoPs): hospice aide competency evaluation standards and conducting a competency evaluation related to the deficient and related skill(s) noted during a hospice aide supervisory visit
  • Hospital Quality Reporting Program

More Information:

The unpublished version of the FR is found here