CMS Proposes 2009 Medicare Hospice Wage Index Changes

On April 28, 2008, the Centers for Medicare & Medicaid Services (CMS) posted a display copy of a Proposed Rule that would update and revise the Medicare hospice wage index for fiscal year (FY) 2009. 

According to the Proposed Rule, CMS proposes to phase-out the Medicare hospice budget neutrality adjustment factor (BNAF) over 3 years, reducing it by 25 percent in FY 2009, by 75 percent for FY 2010, and eliminating it completely for FY 2011.  However, CMS indicates that it may determine that a different percentage reduction in the BNAF, or a different phase-out time frame, would be more appropriate. Nevertheless, CMS projects that the elimination of this adjustment will save the Medicare program approximately $2.29 billion over 5 years.

In the Proposed Rule, CMS also seeks to clarify 2 wage index issues pertaining to the definition of rural and urban areas and to multi-campus hospital facilities. The Proposed Rule is scheduled to appear in the Federal Register on May 1, 2008.  CMS reports that a final rule will be published in August 2008. For additional information, CMS has published a Fact Sheet on the proposed changes.