The Centers for Medicare and Medicaid Services (CMS) on April 28 issued a proposed rule to update and revise the Medicare hospice wage index for FY09.
The agency proposes to phase out an outdated adjustment to the hospice wage index that was put into place over 10 years ago. Elimination of this special adjustment--the budget neutrality adjustment factor (BNAF)--which remains based on 24-year-old wage data, will save Medicare $2.29 billion over five years and would update the hospice wage index to reflect current wages, according to CMS. Although hospice payment rates are projected to increase in 2009, it is estimated that the increase will be approximately 1.1 percent lower for FY09, the first year of the three-year phase-out of the adjustment.
The BNAF is proposed to be phased out over three years, beginning with a 25 percent reduction in FY09, an additional 50 percent reduction (for a total of 75 percent) in FY10, and a complete elimination in FY11. The reduction in hospice payments would be netted against annual market basket increases. Currently the market basket increase for RY09 is estimated to be 3.0 percent; the actual update, however, will not be available until July.
The proposed rule appeared in the Federal Register May 1. A final rule will be published in August 2008.
