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
651 Routine Home Care $ 160.74 1.0003
Code Description Wage Index FY 2023 Hospice FY 2023
Standardization Payment Update Payment Rates
651 Routine Home Care 1.0007 1.
651 Routine Home Care 1.0003 1.038 $ 167.00
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.
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
656 General $ 1,068.28 1.0017 1.038 $ 1,110.76
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.
SEE YOU IN NEW ORLEANS
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.