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Medicare payments to hospices to increase by 0.9 percent in FY 2013

by Published On: Jul 25, 2012Updated On: Jul 27, 2012

The Centers for Medicare & Medicaid Services (CMS) issued a notice to update the Medicare Hospice Wage Index for fiscal year (FY) 2013.  Hospices will receive a 0.9% ($140 million) increase in Medicare payments in fiscal year 2013 under the annual update to the hospice wage index and payment changes required under the Patient Protection and Affordable Care Act, the Centers for Medicare & Medicaid Services announced on July 25, 2012. 

The net increase is based on a 2.6% increase in the inpatient hospital market basket (the proxy for hospices) minus a 0.7% productivity adjustment and 0.3% adjustment required by law; a 0.6% decrease as part of the agency's seven-year phase-out of the wage index's budget neutrality adjustment factor; and a 0.1% decrease due to the use of updated wage data.

While the ACA requires CMS to reform the hospice payment system sometime after FY 2013, the notice says only that CMS is considering multiple approaches to reform - including a case-mix adjustment and recommendations from the Medicare Payment Advisory Commission, Department of Health and Human Services' Office of Inspector General, and Government Accountability Office - and that it plans to seek input from hospice providers.


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