MedPAC Contemplates Reform of Hospice Aggregate Cap

Posted on Friday, October 11, 2019 5:04 PM

The statute authorizing the Medicare Hospice Benefit created two caps on payments designed to control overall spending and increase the likelihood of savings by using hospice over curative care at the end of life. The Inpatient Cap limits the overall annual percent of inpatient care days that a hospice may receive payment for to 20 percent of total days billed. The other cap, The Aggregate Cap imposes an overall aggregate limit on the amount of Medicare payments that a hospice can receive based on the number of patients it has on service and the length of time that those patients have received hospice care. The Aggregate Cap was initially set at $6,500 and has been increased annually to take inflation into consideration. The fiscal year 2020 Aggregate Cap is $29,965.

“The National Association for Home Care & Hospice (NAHC) recognizes that the current mechanism for calculating the Aggregate Cap negatively impacts hospice providers in areas of the country with high wage costs and believes some effort to address this inequity may be in order. However, it is unclear how this would be achieved given that hospice services are based on the location of care and may have variable wage indices applied. This creates some challenges for applying the wage index to the Aggregate Cap unless Congress determines that the cap would be calculated solely using the location of the hospice. Additionally, while NAHC recognizes that the 20 percent reduction was for simulation purposes, we are interested in obtaining additional information around the rationale that would justify a reduction of this or any magnitude, and the data analysis supporting it.”

Source: NAHC Report

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