The Centers for Medicare and Medicaid Services (CMS) issued the final rule for the Fiscal Year (FY) 2025 Hospice Payment Rate Update at the end of July. This rule brings several significant updates to Medicare hospice payment rates and policies, ensuring alignment with statutory and regulatory requirements. Following is a detailed look at the key changes and their implications for hospice care providers and patients. Axxess’ Vice President of Hospice Professional Services Zaundra Ellis offered important takeaways from each change.
Medicare Hospice Payment Rates and Aggregate Cap
The FY 2025 hospice payment update percentage is set at 2.9%, translating to an estimated $790 million increase in payments from FY 2024. This update results from a 3.4% inpatient hospital market basket percentage increase, reduced by a 0.5 percentage point productivity adjustment. Hospices that fail to submit the required quality data will see a reduced payment update of -1.1%. The statutory aggregate cap for FY 2025 is finalized at $34,465.34, up from $33,494.01 in FY 2024.
Zaundra’s Key Takeaway: “Hospice organizations must be submitting the Hospice Quality Reporting required data to CMS. Failure to do so will result in payment rates that are a net loss.”
Hospice Quality Reporting Program (HQRP) Enhancements
Significant updates to the Hospice Quality Reporting Program (HQRP) include the introduction of two new process measures: Timely Follow-up for Pain Impact and Timely Follow-up for Non-Pain Symptom Impact. These measures, expected to begin in FY 2028, will be reported through the new Hospice Outcomes and Patient Evaluation (HOPE) instrument. HOPE will replace the existing Hospice Item Set (HIS) and will collect data at multiple points during a patient’s hospice stay, enhancing the quality of care through more comprehensive data collection.
Zaundra’s Key Takeaway: “Organizations should expect that these process measures, as well as existing CAHPS, Hospice Care Index and HIS/HOPE data points, will be used to create a hospice-specific value-based purchasing model. The success and rapid growth of the home health value-based purchasing program is an excellent example of what hospices should expect in the coming years. Understanding VBP and applying concepts to hospice quality operations will improve the quality of care today and prepare for VBP in the future.”
Changes to the CAHPS Hospice Survey
The final rule also brings changes to the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey. These include the addition of a web-mail mode, a shortened and simplified survey, and modifications to survey administration protocols. New measures, such as a two-item Care Preferences measure, and revisions to existing measures, like the Hospice Team Communication measure, are also finalized.
Zaundra’s Key Takeaway: “This is an exciting change for the industry. Shortening the survey and offering an electronic version is a big step forward for providers that have struggled with low response rates. It is important to recognize that these changes may be tied to quality-based reimbursement in the future.”
Hospice Special Focus Program (SFP)
The Hospice Special Focus Program (SFP) will monitor hospices identified as poor performers based on selected quality indicators. The SFP algorithm uses data from four measures related to caregiver experience, ensuring continuous improvement in hospice care quality.
Zaundra’s Key Takeaway: “The SFP is a bit of a mystery for providers. There are many deficits related to the data used to identify hospices selected for the SFP. Understanding past survey performance, CAHPS performance and the process for managing complaints should be scrutinized and adjusted to maximize performance related to selection for the SFP. We will know more when the first group of organizations selected to participate are published later this year.”
Technical Updates to Hospice Conditions of Participation (CoPs)
CMS has made technical updates to the Conditions of Participation (CoPs) to align the medical director and physician designee roles with the hospice payment requirements. These changes clarify that the physician member of the hospice interdisciplinary group (IDG) can review clinical information and certify terminal illness if the medical director is unavailable. Additionally, regulation text changes clarify the requirements related to the election statement and notice of election (NOE), reorganizing them for better clarity without altering current policies.
Zaundra’s Key Takeaway: “This is a small change that will have a significant impact on the hospice audit outcomes. By clarifying the responsibilities of the physician designee, providers and auditors will be able to easily identify compliance related to hospice physician services.”
Focus on Health Equity and Social Determinants of Health (SDOH)
The rule also addresses health equity and the potential inclusion of Social Determinants of Health (SDOH) elements in future quality measures. Stakeholder input on data collection items related to housing instability, food insecurity, utilities, and transportation challenges has been summarized, indicating a forward-looking approach to comprehensive patient care.
Zaundra’s Key Takeaway: “Social Determinants of Health have been included in hospice interdisciplinary group conversations for years. Formalizing the collection of SDOH data will strengthen the ability of the hospice to service their communities in meaningful and impactful ways.”
Axxess’ professional services team is working on more analysis and insights on these changes and the forthcoming transition to the HOPE assessment. Follow Axxess on LinkedIn and subscribe to our blog and emails to receive the latest updates.
Axxess Hospice, a cloud-based hospice software, includes simple tools such as intuitive medication management and real-time plan of care updates to help keep organizations compliant.
