Our last Hospice Alert (Volume 22.03) indicated that CMS revised the Hospice Cost & Data Report on September 25, 2022. The actual date of the revision was February 25, 2022, and is available here.
HOSPICE CAP OBSERVATIONS
Self-determined CAP filings for the 2021 CAP Year, year ended September 30, 2021, were due yesterday, February 28, 2022. The Health Group, LLC prepares many of these filings for clients as part of an ongoing CAP management process. Based on the filings for the 2021 CAP Year, whether prepared by us or by our many hospice clients, and other circumstances the following are noteworthy:
- In our opinion, the number of hospices exceeding the CAP for the 2021 CAP Year will again increase from the prior year. It is noteworthy that MedPAC reported over 19% of hospices exceeded the CAP in the latest MedPAC reporting. This is a substantial increase from prior years. Many hospices, not reporting a liability at the time the self-report is filed, will incur a CAP liability as time passes and the beneficiary count for the 2021 CAP Year erodes.
- Many hospices that continue to calculate the CAP on the Streamlined Method, have a CAP liability (resulting from declines in first-time admissions combined with an increase in lifetime length-of-stay) or creep closer to having a CAP liability than in prior years. Any conversion to the Proportional Method requires careful analysis. The Medicare Administrative Contractors are not consistent in their approach to determining the financial implications of the conversion.
- Additionally, the 2020 and 2021 CAP of hospices are being impacted by live discharges of patients served in the 2020 and 2021 CAP Years, who have now elected hospice service with another hospice provider for whatever reason. The beneficiary count for the patient is now shared between those hospices serving the patient. One hospice which calculates the CAP on the Streamlined Method saw their 2020 CAP liability increase over $100,000 in 2022 because five patients admitted in the 2020 CAP Year re-elected hospice services with another hospice provider. The original 2020 beneficiary count for these patients is now being shared with another hospice.
- While we expect the total number of hospices exceeding the CAP to increase again, we also expect that the average amount by which hospices exceed the CAP will not increase. This is the result of hospices exceeding the CAP for the first time, but by relatively small amounts which lower the average, as well as the establishment of two separate routine home care payment rates and the lower rate for days after the first 60 days of service. Many hospices exceeding the CAP for the first time are still surprised when they discover a repayment is required.
The increasing disparity in hospice reimbursement rates by geography continues to grow creating a need to carefully monitor CAP liability status by hospices located in high wage index areas. These hospices are at greater risk of incurring a CAP liability.
CAP management involves annual filing, periodic monitoring (frequency is dependent on various factors), and liability estimation. Regardless of the CAP exposure, every hospice should have a management plan in place. Some plans may be very simple and require little attention, others may require monthly tracking of CAP liability and CAP liability indicators and trends which allow for assessing the impact of any CAP management strategies.
2022 HOSPICE FINANCIAL MANAGEMENT ACADEMY
The Health Group, LLC is in the final planning process for the 2022 Hospice Financial Management Academy. The program is expected to occur in September 2022. Site selection is currently underway. Additional details will be forthcoming. If this program is of interest to you, please make certain you are the first to be alerted to details as available by contacting us at firstname.lastname@example.org and ask to receive early notifications. As always, space will be limited based on the interactive nature of the program.