National Government Services, Inc. Medicare Monthly Review Part A and B
A Combined Part A and Part B Newsletter

MMR-2007 08A, August 2007

Update to the Hospice Payment Rates, Hospice Cap, Hospice Wage Index and the Hospice Pricer for FY 2008 (MM5685)

Note: This article was revised on July 24, 2007, to reflect the correct dates for which the rates in the table of Hospice Payment Rates are applicable. All other information remains the same.

Provider Types Affected
Hospices billing Medicare regional home health intermediaries (RHHI) for hospice services

Provider Action Needed
Be sure billing staff are aware of this information.

Background
The law governing the payment for hospice care requires annual updates to the hospice payment rates. Section 1814(i)(1)(C)(ii) of the Social Security Act (the Act) stipulates that the payments for hospice care for fiscal years after 2002 will increase by the market-basket percentage increase for the fiscal year (FY). This payment methodology has been codified in regulations found at 42 CFR §418.306(a)(b).

Hospice Payment Rates
The FY 2008 payment rates will be the FY 2007 payment rates, increased by 3.3 percentage points, which is the total market basket percentage increase forecasted for FY 2008. The FY 2008 hospice payment rates are effective for care and services furnished on or after October 1, 2007, through September 30, 2008.

The national payment rates for revenue codes 651, 652, 655, and 656 for October 1, 2007 through September 30, 2008 are listed in the following table:

Hospice Cap
The Hospice Cap is updated annually in accordance with §1814(i)(2)(B) of the Act and provides for an increase (or decrease) in the hospice cap amount. Specifically, the cap amount is increased or decreased, for accounting years after 1984, by the same percentage as the percentage increase or decrease, respectively, in the medical care expenditure category of the Consumer Price Index for all Urban Consumers.

The latest hospice cap amount for the cap year ending October 31, 2007, is $21,410.04. The hospice cap is discussed further in the Medicare Claims Processing Manual, Chapter 11, Processing Hospice Claims, Section 80.2. (See Additional Information section for the Web address)

Hospice Wage Index
The Hospice Wage Index is used to adjust payment rates to reflect local differences in wages according to the revised wage index. The Hospice Wage Index is updated annually in accordance with recommendations made by a negotiated rulemaking advisory committee as published in the Federal Register on August 8, 1997. 42 CFR §418.306(C) requires that the updated hospice wage index be published annually as a notice in the Federal Register.

The Hospice Wage Index notice will be effective October 1, 2007, and published in the Federal Register before that date. The revised wage index and payment rates will be incorporated in the hospice Pricer and forwarded to your intermediary following publication of the notice.

Additional Billing Instructions
Hospices are also advised to refer to CR5685 for claims processing information. Some key points of CR5685 are:

• Hospices should split claims if dates of service span fiscal years, e.g., if services span September and October of 2007 so the services can be paid using the correct fiscal year rates.
• If a hospice does not split such claims, the entire claim will be paid at the lower FY2007 rate and your RHHI will make no subsequent adjustment to the claim.
• Hospices should include the Core Based Statistical Area (CBSA) corresponding to the state and county of the beneficiary’s home in Value Code 61 –on claims that include routine home care or continuous home care. Use the Federal Register table associating states and counties to CBSA codes (codes in the range of 10180-49740 and 01-65 rural state codes) to determine the code to report in value code 61.
• Medicare systems will use CBSA codes for purposes of wage index adjustment of hospice claims.
• Medicare systems will also use a table of wage index values associated with CBSA codes for FY2008 hospice payment calculations.

Additional Information
If you have questions, please contact your Medicare RHHI at their toll-free number which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip on the CMS Web site.

For complete details, please see the official instruction issued to your RHHI regarding this change. That instruction may be viewed by going to http://www.cms.hhs.gov/Transmittals/downloads/R1280CP.pdf on the CMS Web site.

The hospice payment rate and cap are discussed further in the Medicare Claims Processing Manual, Chapter 11, Processing Hospice Claims, Section 30.2. and Section 80.2.This information may be reviewed at http://www.cms.hhs.gov/manuals/downloads/clm104c11.pdf on the CMS Web site.

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

MLN Matters Number: MM5685
Pub. 100-4, Transmittal# R1280CP, CR# 5685
Related CR Release Date: June 29, 2007
Effective Date: October 1, 2007
Implementation Date: October 1, 2007