The Centers for Medicare & Medicaid Services (CMS) released their proposed updates for hospice reimbursement rates in 2023 in the 2022 Hospice Wage Index Final Rule. The proposed updates are intended to provide hospices with more accurate and up-to-date reimbursement rates that better reflect the cost of providing hospice services. The proposed updates will have a significant impact on the operations of many hospices and have been met with both anticipation and apprehension.
Background on Hospice Reimbursement Rates
Hospices are reimbursed by CMS through the Medicare Hospice Benefit (MHB) under the Prospective Payment System (PPS). Medicare PPS pays a flat rate for each hospice claim and covers all related services for a certain period of time. The rate for each claim is determined by the Hospice Wage Index (HWI), which is updated each year. The HWI is used to calculate the reimbursement rate for each hospice claim and is based on the local labor costs for each geographic area.
Proposed Changes for the 2022 Hospice Wage Index Final Rule
The proposed updates for the 2022 HWI Final Rule include a number of changes that are intended to improve the accuracy and timeliness of the reimbursement rates. These changes include:
- Adjusting the wage index to more accurately reflect the labor costs in each geographic area;
- Updating the wage index to reflect the most recent labor costs;
- Making the wage index more consistent across all geographic areas;
- Increasing the wage index for rural areas; and
- Providing a 1.5% increase to the reimbursement rates for fiscal year 2022.
The proposed changes are intended to reflect the actual cost of providing hospice services in each geographic area and to provide a more accurate reimbursement rate for each claim. The 1.5% increase is also intended to help hospices adjust to the proposed changes and to offset the cost of providing services.
Implications for Hospices
The proposed updates to the 2022 HWI Final Rule have the potential to have a significant impact on the operations of many hospices. The changes could result in some hospices receiving an increase in reimbursement rates, while other hospices may not see any change or may even see a decrease in reimbursement rates. As such, it is important for hospices to understand the potential implications of the proposed changes and to plan for any necessary adjustments.
Conclusion
The proposed updates to the 2022 Hospice Wage Index Final Rule could have a significant impact on the operations of many hospices. It is important for hospices to understand the proposed changes and to plan for any necessary adjustments. The proposed updates are intended to provide more accurate and up-to-date reimbursement rates that better reflect the cost of providing hospice services, and the CMS is accepting public comments on the proposed changes until July 6th, 2021.