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Volume 21.02

After preparing substantial numbers of self-determined CAP Report filings for the 2020 CAP Year and CAP liability assessment reports for hospices across the country, it is increasingly obvious to us that greater numbers of hospices are exceeding hospice aggregate payment limitations (“CAP”).  This appears to be true for hospices calculating CAP on both the Streamlined and Proportional Methods.  CAP liabilities relating to the 2020 CAP Year will be repaid by hospices in 2021 and future years as the Medicare Administrative Contractors (“MAC”) recalculate CAP liabilities as beneficiary counts erode over time.

Even as more hospices exceed CAP, the Medicare Payment Advisory Commission (“MedPAC”) continues to pursue its recommendation to Congress that the CAP amount be wage adjusted, and that the CAP amount itself be reduced by twenty percent (20%).  Using 2017 data, MedPAC estimates that the 14% of hospices that exceeded the CAP would increase to 26% of hospices.

The Health Group, LLC has often raised the issue that geographical adjustment to the CAP, or some portion of a geographical adjustment, would be fair and reasonable; however, such an action would require a phase-in period or limitation on financial impact, at least in the short-term.  Of course, an across-the-board 20%, or any other reduction to the CAP, is not justified by either the original intent of the CAP or currently available and reliable information indicating that the CAP amount itself is too high or inappropriate.  The recommendation to reduce the CAP amount is nothing more than an effort to reduce Medicare expenditures, which is not based on anything except Medicare margins reported by hospices.  We encourage all hospices to express their opinions regarding the CAP reduction to MedPAC directly and through your respective state and national associations.  You can secure copies of MedPAC reports, transcripts of meetings, and other relevant information at http://www.medpac.gov/.


Hospices, like other healthcare provider types, have been significantly impacted by the COVID-19 PHE.  It is amazing how many hospices have been similarly impacted, but also uniquely impacted.

As more industry-wide information becomes available regarding the impact of the COVID-19 PHE on hospice providers, hopefully, we, along with others, will be able to better determine both the short-term and long-term impacts of the COVID-19 PHE on the current and future financial operations of hospices, including CAP.  This information will be invaluable as hospices move beyond the COVID-19 PHE.

Our hospice clients have experienced and continue to experience a wide variety of utilization changes, which, of course, impact financial operations.  The accumulation of information to be used in future reporting for the use of Provider Relief Funds (“PRF”) as well as cost reports for 2020 are already providing substantial insight into the current and future financial impact of:

  • Reduced numbers of hospice patients in nursing homes and assisted living facility settings;
  • Changes in the numbers and composition of patients in hospice free-standing inpatient facilities;
  • Reduced or modified admissions and admission patterns,
  • Staffing modifications as well as salary and wage modifications;
  • Increased expenses for non-salary items directly and indirectly related to COVID-19 PHE;
  • Availability of resources, both personnel and other,
  • Changes, and in some cases, elimination of a truly centralized administrative facility as more administrative personnel work remotely;
  • Alternative service delivery methods, and
  • Other COVID-19 PHE induced operational changes.

We look forward to hearing from you regarding how the COVID-19 PHE has impacted your hospice and associated activities, as well as changes in your operations that are expected to be ongoing post the COVID-19 PHE.  Comments are always appreciated at contact@healthgroup.com.


The Health Group, LLC is planning to return to live programming on September 13-14, 2021 at Paris Hotel and Casino in Las Vegas.  Details are in the planning stage; however, expect discussion to include the following:

  • Final reporting for Provider Relief Funds (“PRF”) – yes, we expect you will still be reporting, amending reports, or preparing for governmental review;
  • Using readily available information for financial assessment, planning, and budgeting;
  • COVID-19 PHE debriefing (lessons learned and future operational and financial impacts);
  • Reporting essentials going forward (including cost reporting to influence payment rates);
  • Preparing for future CAP implications, including monitoring of liabilities, and of course,
  • Current financial developments impacting hospice providers.

Even though we are hopeful that COVID-19 restrictions will be eased as the population is immunized and cases continue to decline, our programs are always subject to limited capacity.  Mark your calendar now if you consider attending.  More information will be provided as it becomes available on our website.