(304) 241-1261 contact@healthgroup.com

 Volume 22.15

FY 2023 hospice payment rates, effective October 1, 2023, have been set.  Routine home care rates are as follows, before any wage index adjustment based on the location of the patient:

FY 2023 Hospice RHC Payment Rates 

Code       Description                     FY 2022                  SIA Budget
                                                   Payment Rates       Neutrality Factor         

651     Routine Home Care          $ 203.40                    1.0003
            (days 1-60)

651     Routine Home Care          $ 160.74                    1.0003
            (days 61+)     

Code    Description         Wage Index       FY 2023 Hospice        FY 2023
                                      Standardization    Payment Update   Payment Rates

651    Routine Home Care    1.0007                 1.038                    ​$ 211.34
           (days 1-60)          

651   Routine Home Care      1.0003                 1.038                     $ 167.00
          (days 61+)  

The Service Intensity Adjustment (“SIA”) budget neutrality factor is designed to reduce the overall routine home care rates to ensure that that SIA payments have a budget neutral impact on overall Medicare reimbursement.  CMS had proposed to eliminate the SIA budget neutrality factor to simplify the payment update calculation; however, given the possibility of an increase in the use of SIA, CMS has elected to retain the SIA budget neutrality factor for FY 2023 rates.

Additionally, CMS has established a permanent five percent (5%) limit on the decrease to a geographic area’s wage index when compared to the prior year regardless of any factors that could have caused the decline.  There is no limitation on increases in a geographical area’s wage index.

The hospice wage index is used to adjust payment rates for hospices under the Medicare program to reflect local differences in area wage levels, based on the location where services are furnished. The hospice wage index utilizes the wage adjustment factors used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage adjustments. The regulations at § 418.306(c) require each labor market to be established using the most current hospital wage data available, including any changes made by the Office of Management and Budget (OMB) to the Metropolitan Statistical Areas (MSAs) definitions.

Although the wage index is based on hospital data (information not readily available specific to hospices), the labor share of the rate was rebased and revised in setting FY 2022 rates using Hospice Cost Report data.  These labor shares were established based on calculations extracted from 2018 Hospice Cost Report data.  The labor components applied are as follows (secured from FY 2022 Final Rule).

Current Labor Shares by Level of Care
Final FY 2022 Labor Shares

Continuous Home Care                               75.2%
Routine Home Care                                     66.0%
Inpatient Respite Care                                 61.0%
General Inpatient Care                                63.5%                     

Rates, other than routine home care, are as follows for FY 2023.  No budget neutrality factors are applied in the determination of these reimbursement rates.

FY 2023 Hospice CHC, IRC, and GIP Payment Rates 

Code   Description    FY 2022       Wage Index           FY 2023             FY 2023
                                    Payment    Standardization      Hospice             Payment
                                       Rates              Factor          Payment Update       Rates
652     Continuous        $ 1,462.52          1.0026            1.038               $ 1,522.04
Home Care Full Rate
 = 24 Hours of care

655       Inpatient          $ 473.75             1.0007            1.038               $   492.10
Respite Care 

656      General           $ 1,068.28           1.0017            1.038               $ 1,110.76
Inpatient Care

The hospice CAP amount for the 2023 CAP Year has been set at $32,486.92.  This is not subject to any wage adjustment factor regardless of the location of the hospice or the patient’s receiving hospice services.

The 2023 Final Rules can be viewed here


The 2022 Hospice Financial Management Academy, September 19-20, 2022, is in final planning.  Information, including registration and room reservations, is available here.  We are very excited about the program and look forward to seeing you or someone from your organization in New Orleans.