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Annual Change in Medicaid Hospice Payment Rates

Medical healthcare and doctor service
Tiffany Karlin

September 29, 2020

Medicaid has published this year’s Medicaid hospice payment rates that will be effective on October 01. The Medicaid hospice payment rates are calculated based on the annual hospice payment rates established under Medicare.

Sections 1814(i)(1)(C)(ii) and 1902(a)(13)(b) of the Social Security Act authorize Medicaid hospice payment rates based on the annual hospice rates established under Medicare along with annual increases in payment rates for Medicare hospice care services. Hospice payment rates can be adjusted for regional differences in wages using the hospice wage indices published annually in the Federal Register. Rates for hospice physician services are not increased under this provision.

Utilizing the hospice payment reform authority under section 1814(i)(6) of the Act, the FY 2021 per diem payment rates for continuous home care, general inpatient care, and inpatient respite care were rebased to more accurately align payments with the cost of providing care. Changes to hospice coverage or reimbursement require submission of a state plan amendment.

For each day that an individual is under the care of a hospice, the state pays the hospice an amount applicable to the level of care that the patient was in for that day.

  • Routine Home Care: The state pays the hospice one of two-tiered per diems, as set by CMS based on a beneficiary’s length of stay, with a higher rate for the first 60 days of hospice care and a lower rate starting on day 61.
  • Continuous Home Care: The state pays the hospice for every hour or part of an hour of continuous care furnished up to a maximum of 24 hours a day.
  • Inpatient Respite Care: The state pays the hospice at the inpatient respite care rate for each day the beneficiary is in an approved inpatient facility and is receiving respite care.
  • General Inpatient Care: The state pays at the general inpatient rate when general inpatient care is provided.

Outside of the payments made for the various levels of care described above, the following payment provisions are also made for hospice services.

  • SIA Payment: The state pays the SIA for visits made by a social worker or a registered nurse when provided during routine home care in the last seven days of life. The SIA payment is in addition to the routine home care rate. The SIA payment will be equal to the continuous home care hourly rate, multiplied by the hours of nursing or social work provided (up to four hours total) that occurred on the day of service.
  • Hospice Nursing Facility Room and Board: Hospice nursing facility room and board per diem rates are reimbursed to the hospice provider at a rate equal to 95% of the skilled nursing facility rate, less the amount that patients able to contribute to the cost of his/her own care. The hospice provider is responsible for passing the room and board payment through to the nursing facility.

States can elect to implement the hospice payment cap and/or a 2% reduction in hospice payment for lack of quality reporting. 

Please confirm that accurate rates are in your agency’s software. If your agency is having difficulty getting paid correctly please contact our Healthcare Team. We will be more than happy to assist you with your billing needs.

Click here for Medicaid Hospice Rate (FY) 2021.

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