Written by Dee Geray, Senior Manager, Clinical Consulting, McBee

Now that the Centers for Medicare & Medicaid Services has released its Fiscal Year 2025 Hospice Payment Rate Update, agencies may be wondering what changes could be on the horizon. During a recent webinar with Michael Puskarich, we discussed the proposed rule and its potential impacts on financial and operational quality. Here are the key changes: 

Wage Index Adjustments 

  • 2020 Census Impact: Shifts in population demographics and changing geographic classifications are affecting rural-urban dynamics. 
  • Rural Classification Changes: Use of hospital cost reports in rural classifications marks a significant change in reimbursement calculation methods. 
  • Potential Decreases: Providers must address potential decreases in wage index rates. 

Micropolitan Statistical Areas 

  • Policy Challenges: Providers in areas with populations ranging from 10,000 to 50,000 must navigate evolving policies and intricate reimbursement mechanisms. 
  • Reclassification Impacts: Urban counties reclassified as rural impact reimbursement dynamics, necessitating vigilance from providers. 

Payment Updates and Cap Revisions 

  • Inflation Adjustments: Payment updates reflect adjustments based on inflation indices and rural hospital wage revisions. 
  • Strategic Planning: Incremental rate increases and reductions require focused financial planning. 
  • Cap Revisions: New methodologies for expenditure thresholds over multiple years impact operational budgeting and resource allocation. 

Documentation and Complex Therapies 

  • Streamlined Processes: Clarifications on election statements and certification of terminal illness aim to enhance documentation clarity. 
  • Complex Therapies: Information requests explore incorporating complex therapies into hospice benefits, aiming to reduce financial risks. 

Quality Reporting Enhancements 

  • CAHPS Hospice Survey Changes: 
  • Pre-notification Letters: Starting January 2025, letters sent to potential respondents to improve response rates. 
  • Extended Response Period: Survey response period extended from 42 to 49 days. 
  • Simplified Language: Survey language simplified to reduce confusion and improve feedback accuracy. 
  • New Measures in 2027: New CAHPS measures to be reported starting November 2027, based on data from 2025-2026. 

HOPE Integration 

  • Data Collection and Evaluation: Integration of HOPE (Hospice Outcome and Patient Evaluation) represents a shift in data collection methodologies. 
  • Collaboration: Requires collaboration with private vendors. 
  • Logistical Challenges: Despite challenges, HOPE’s potential to enhance patient care outcomes is significant. 

Proactive Strategies for Providers 

  • Understanding Changes: Providers must grasp wage index intricacies, adapt to payment updates, and manage cap revisions. 
  • Enhancing Quality Reporting: Emphasizing timely reassessment of symptoms and integrating HOPE will foster patient-centric care. 
  • Sustainable Growth: Leveraging insights from the FY 25 proposed rule can help providers achieve excellence in end-of-life care delivery. 

From understanding wage index intricacies to adapting to payment updates and cap revisions, providers must remain agile in their response to evolving regulatory frameworks. Quality reporting enhancements, coupled with the integration of HOPE, offer avenues for fostering patient-centric care paradigms. By leveraging insights gleaned from the FY 25 proposed rule, providers can chart a course towards sustainable growth and excellence in end-of-life care delivery. 

Click here to listen to our full webinar on the FY 2025 Hospice Payment Rate Update Proposed Rule