MedPAC Finalizes Recommendation for Hospice Rate Freeze and Aggregate Cap Cut for FY 2022   

Situation Report | January 18, 2021

As anticipated, the Medicare Payment Advisory Commission (MedPAC), an advisory body to Congress, met last week to finalize payment and policy recommendations that will be incorporated in its annual March Report to Congress.   

MedPAC actions included payment recommendations for hospice and a legislatively-mandated impact analysis of the hospital post-acute transfer policy on hospice. The payment recommendations are as follows: 

  • For fiscal year 2022, eliminate the update to the 2021 Medicare base payment rates for hospice.
  • Wage adjust and reduce the hospice aggregate cap by 20 percent.

These recommendations are estimated to decrease spending relative to current law by $750 million to $2 billion over one year and $5 billion to $10 billion over five years. 

MedPAC’s recommendations are only advisory in nature. Any payment changes would require an act of Congress.  

As part of its hospice discussion, MedPAC review the items it considers when developing payment recommendations. This includes Medicare hospice services data and an assessment of payment adequacy indicators (beneficiaries’ access to care, quality of care, hospices’ access to capital, and Medicare payments and hospices’ costs).

HCA has reviewed these recommendations carefully and will oppose any proposals in Congress that would adversely impact hospice finances at a time when 72 percent of New York hospices have negative margins and face extraordinary new pressures in the COVID-19 pandemic that are not accounted for in the historical data on which MedPAC bases its analysis.