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Update to Hospice Payment Rates, Hospice Cap, Hospice Wage Index and the Hospice Pricer for FY 2012

MLN Matters® Number: MM7518
Related Change Request (CR) #: 7518
Related CR Release Date: July 29, 2011
Effective Date: October 1, 2011
Related CR Transmittal #: R2260CP
Implementation Date: October 3, 2011

Provider Types Affected

Hospice providers submitting claims to Medicare contractors (Fiscal Intermediaries (FIs), Part A/B Medicare Administrative Contractors (A/B MACs), and/or Regional Home Health Intermediaries (RHHIs) for services provided to Medicare beneficiaries need to be aware of this article.

Provider Action Needed

The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 7518 which provides the annual update to the hospice payment rates for Fiscal Year (FY) 2012, the hospice aggregate cap amount for the cap period ending October 31, 2011, and the hospice wage index and Pricer for FY 2012. Be sure your billing staffs are aware of these changes, which are described in the Background and Key Points sections, below.


CMS updates the payment for hospice care, the hospice aggregate cap amount, and the hospice wage index annually. The Social Security Act (the Act) (Section 1814(i)(1)(C)(ii)) stipulates that the payments for hospice care for fiscal years after 2002 will increase by the market basket percentage increase for that Fiscal Year (FY), and this payment methodology is codified in the Code of Federal Regulations (refer to Title 42, Section 418.306 (a)&(b)).

Key Points

FY 2012 Hospice Payment Rates

The FY 2012 payment rates will be the FY 2011 payment rates, increased by 3.0 percentage points, which is the total hospital market basket percentage increase forecasted for FY 2012. The FY 2012 hospice payment rates are shown in the following table and are effective for care and services furnished on or after October 1, 2011, through September 30, 2012.

Code Description Rate Wage Component Subject to Index Non- Weighted Amount
651 Routine Home Care $151.03 $103.77 $ 47.26
652 Continuous Home Care Full Rate = 24 hours of care $36.73= hourly rate $881.46 $605.65 $275.81
655 Inpatient Respite Care $156.22 $ 84.56 $ 71.66
656 General Inpatient Care $671.84 $430.04 $241.80

Reference to the hospice payment rate is discussed further in the "Medicare Claims Processing Manual," Chapter 11 (Processing Hospice Claims), Section 30.2 (Payment Rates); see PDFon the CMS website.

Hospice Cap

The latest hospice cap amount for the cap year ending October 31, 2011, is $24,527.69. In computing the cap, CMS used the medical care expenditure category of the March 2011 Consumer Price Index for all Urban consumers, published by the Bureau of Labor Statistics, (see Website on the Internet), which was 397.726. The hospice cap is discussed further in the "Medicare Claims Processing Manual," Chapter 11 (Processing Hospice Claims), Section 80.2 (Cap on Overall Hospice
Reimbursement); see PDF on the CMS website).

Hospice Wage Index

The FY 2012 Hospice Wage Index final rule will be effective October 1, 2011, 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 the intermediaries following publication of the wage index final rule.

Be Aware: Hospice providers should split claims if dates of service span separate fiscal years, e.g., September/October billing as the FY 2011 rates will be used if the hospice chooses not to split the claim and your Medicare Contractor will perform no subsequent adjustments to these claims.

Additional Information

The official instruction, CR7518 issued to your carrier, A/B MAC, and FI regarding this change may be viewed at PDFon the CMS website.

If you have any questions, please contact the Provider Contact Center at (866) 590-6703.


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. CPT only copyright 2010 American Medical Association.

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