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Volume 23.10

Under the proposed hospice payment rule, payments to hospices for the year beginning October 1, 2023, will increase by only 2.8%.  This increase in base rates, adjusted by geography, is not close to the overall increase in the cost of services being experienced by hospice providers across the country.  The comment period relating to the proposed rule has ended.

Even though the 2.8% will be revised later this year to be more reflective of more current data, if available, hospices are experiencing substantially greater cost increases than 2.8%.

A substantial portion of the cost increases being experienced are related to labor costs.  Hospices, and much of the healthcare industry as a whole, have experienced an inability to secure staffing to support healthcare delivery needs.  This shortage, which originated prior to the COVID-19 PHE, has increased because of the public health emergency.  Healthcare professionals can, and are demanding, higher levels of compensation because of this shortage.  Hospices have no alternative but to increase compensation to compete with other healthcare providers for these personnel.  Hospices are also experiencing cost increases related to supplies, drugs and other necessary items to appropriately provide care to terminally ill populations.

Other cost increases are influenced by the ever-increasing regulatory environment, which has only been compounded by the removal of flexibility provided during the COVID-19 PHE.  Simultaneously, there are significant efforts underway to improve program integrity, many of which can be more efficiently addressed than expected to be proposed.

The increase in hospice payment rates, over the past several years, has been less than the actual cost increases incurred and the same will occur in FY 2024 (October 1, 2023, through September 30, 2024).

While we recognize the national efforts to decrease government expenditures generally, we believe there are many areas where healthcare expenditures could be reduced or better managed, rather than simply reducing payments generally compared to the costs being incurred to provide patient services.

Sequestration May Never End – Hospices, like other healthcare providers, are being penalized at the rate of two percent (2%) of Medicare payments due to the inability of Congress to reduce government spending by $1.5 trillion over ten (10) years in 2011.  Congress passed legislation in 2011, signed by President Obama, as part of a debt ceiling compromise which established a Joint Select Committee on Deficit Reduction, consisting of Republicans and Democrats, to reach a compromise on the reduction of expenditures by $10.5 trillion.  If the Committee had done so, sequestration could have been averted.  The Committee took the easy way out and just let the two percent (2%) reduction become law.  Of course, healthcare providers are not the only ones impacted by the sequester; however, it has now been ten (10) years, excluding the COVID-19 PHE period, that hospices, and other healthcare providers, have had their payments confiscated.  The sequestration was originally scheduled to end in 2021 but is currently extended to 2032.  The extension of sequestration continues to be an easy means for Congress to reduce expenditures with little, if any political consequence.

It is becoming increasingly important that hospices, and other healthcare providers, take these issues to their elected officials, especially as elections loom in the future.  CMS cannot address sequestration and has limited ability, on their own, to address the increase in upcoming payment rates.

The Health Group continues to do whatever it can to pursue appropriate reimbursement for hospices, and other healthcare providers, on your behalf.


The Health Group, LLC is accepting registrations for the 2023 Hospice Financial Management and Administration Conference.   Many registrations have already been received and the program is expected to sell-out (attendance, as always, is limited to better ensure the quality of the program).  The program will be held at the beautiful Lago Mar Beach Resort, Fort Lauderdale, Florida on November 9-10, 2023.  For 2023 we are focusing on prospective financial and compliance issues of hospices, while still addressing retrospective reporting issues.  This is especially important now as CMS and federal legislators are focusing on integrity as evidenced by the proposed rules for FY2024.  Program information, including registration information, is available here.

We are encouraging anyone who expects to attend to make room reservations at their earliest opportunity.  Many individuals planning on attending the program have already reserved their rooms.  The Lago Mar Beach Resort will sell out for the days of our conference.  Special rates have been secured with the Lago Mar Beach Resort & Club; however, to secure these rates, call (855) 829-2923 and inform the hotel that you are attending “The Health Group, LLC Hospice Financial Administration Conference” or online at https://lagomar.com/.

When making reservations online, go to reservations, click on group code, and enter 2311THEHEA.  Select the dates you will be staying, even if the dates are indicated as not available, select them and your room type.  All attendees are being offered Executive One Bedroom Suites at $235/night.  Resort fees have been waived for our attendees.  If you have a problem, please call the hotel.  The hotel is making the $235/night available for two (2) days prior and two (2) days after the program dates.

Do not hesitate to contact us with any questions you may have regarding the program or you have any difficulties in securing rooms at Lago Mar Beach Resort.