Hospice Medicare Rates Impacted by Sequestration

As March 1 approaches, NHPCO wants to provide more detailed information on the implementation of sequestration, which will involve a 2% cut in Medicare payments, effective for services provided on or after April 1.

Why did this happen?

Most Americans are aware that Congress took action in January to avoid the fiscal cliff that would impact just about every aspect of federal spending. While most individual income tax increases were avoided, Congress provided only short term relief from dramatic spending cuts within the federal budget. Indeed, absent a more considered alternative, “across the board” spending cuts will be made effective on March 1, 2013. These forced spending cuts are a process called sequestration – and in most cases, legislators want to avoid sequestration because the cuts are done with such a broad brush that they negatively impact just about everyone. NHPCO has released a press statement on sequestration.

Now March 1 is looming and sequestration is more likely. Don Schumacher, NHPCO President and CEO, and Angie Truesdale, NHPCO Vice President, Public Policy, did a short video with an explanation of the fiscal cliff, sequestration and its impact on hospice providers.Click here to watch the video.

What does this mean?

  1. Hospices will continue to bill at the FY2013 rates.
  2. For services provided on or after April 1, 2013, the MAC will deduct 2% from the reimbursement before paying the claim. The hospice will NOT bill at the 98% rate.
  3. The sequestration cuts will continue for 10 years, unless there is Congressional action to discontinue them.

How should my hospice prepare?

  1. Budget cuts for FY2013:NHPCO has been providing information on sequestration for some time. Hospices should prepare for this 2% cut in payments for the time period from April 1 2013 through the end of this fiscal year.
  2. Budget planning for FY2014 and beyond:In budget planning for FY2014 and beyond, unless sequestration is discontinued, budget planning should incorporate this 2% cut.
  3. Wage index calculator and state-by-state rate chart:Review the wage index calculator or the state-by-state rate charts to determine the amount of reimbursement for each level of care.A reminder that the hospice should continue to bill at the FY2013 rates and the reimbursement adjustment will be made by the MAC. Sequestration reimbursement rates are highlighted in purple.
  4. FY2013 rates for Medicaid REMAIN THE SAME AND ARE NOT IMPACTED BY SEQUESTRATION.