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FY2013 Hospice Payment Rates

The Centers for Medicare and Medicaid Services (CMS) has published the FY2013 rates for hospice, effective October 1, 2012. The FY2013 wage index is needed to project rates for individual CBSAs and rural areas. It is not yet published, but will publish in the Federal Register sometime between now and October 1, 2012.
The cap amount is set at $25,377.01 for the cap year ending October 31, 2012.
The rates show an increase of 1.6% over FY2012. The calculation includes the following:
Final hospital market basket update for FY 2013= 2.6%
Less productivity adjustment= -0.7%
Less additional hospice-specific productivity adjustment= -0.3%
TOTAL FY2013 rate increase= 1.6%
National Rate
Wage Component Subject to Wage Index
Non-Weighted Amount
Routine Home Care
Continuous Home Care
Full Rate = 24 hours of care
Hourly Rate = $37.32
Inpatient Respite Care
General Inpatient Care

Additional information will be available once the wage index for FY2013 is published.  We will continue to keep members informed as information and updates are released.


Budget Neutrality Adjustment Factor (BNAF)

The payment rates listed above do not include the rate reduction due to the Budget Neutrality Adjustment Factor (BNAF). The FY2013 BNAF rate adjustment is a multiplier to the wage index and will already be included in the wage index when it is published for FY2013 later this summer. This is the fifth year of a seven-year phase out of the BNAF, and is projected to reduce these payment rates by 0.6% this year.

The multiplier will be the same for all CBSAs (Core Based Statistical Area) and rural areas, but the wage index values for a given area change from year to year and could impact, either positively or negatively, the wage index and the applicable rates.

Other Issues That Could Impact FY2013 Rates

When the Super Committee failed to produce $1.2 trillion in savings for the budget, the enforcement mechanism to reach savings, called sequestration, was triggered. The sequestration includes automatic reductions split 50/50 between domestic and defense spending. The sequestration process protects Social Security, Medicare beneficiaries, and low-income programs from any cuts, but Medicare providers – including hospices – are at risk for a 2% reduction in our market basket updates starting in January 2013. The current thinking is that Congress will try to undo these broad, across-the-board cuts after the November elections (during the ‘lame duck’ session), but it is by no means a certainty that hospice and other Medicare providers will be spared.

Quality Reporting
October 1, 2012 is the beginning of data collection for the FY2014 annual payment year. While mandatory quality reporting does NOT impact the FY2013 payment rates, hospices that do not meet the quality reporting deadlines during the spring of 2013 (January 31, 2013 and April 1, 2013) will be penalized with a 2% hospital market basket reduction for the FY2014 payment year, beginning on October 1, 2013.


Click here to read the full CMS release on the FY2013 Hospice Payment Rates.

For questions contact Jeff Lycan at or (614) 545-9016, or Katie R. Colgan at or (614) 545-9032.