Medicare Reimbursement Rates

CMS Releases Fiscal Year 2007 Medical Reimbursement Rates

NHPCO Regulatory Alert

To:  NHPCO Members
From: Judi Lund Person, Vice President, Division of Quality and Access
Date: August 8, 2006

Re: Fiscal Year 2007 Medicare Rates

The Centers for Medicare and Medicaid Services (CMS) announced the FY 2007 payment rates for hospice care furnished on or after October 1, 2006 through September 30, 2007. NHPCO is pleased to report that the rates are a 3.4% increase over FY2006, which is the total market basket percentage increase forecasted for FY 2007.  They are as follows:

National Rates

Code Description Rate Wage Component Subject to Index Non-Weighted Amount
651 Routine Home Care 130.79 89.87 40.92
652 Continuous Home Care; Full Rate = 24 hrs of care, $31.81 hourly rate 763.36 524.50 238.86
655 Inpatient Respite Care 135.30 73.24 62.06
656 General Inpatient Care 581.82 372.42 209.40

Wage Index:  The wage index for FY2007 has not yet been released.  As soon as it is put on public display at the Federal Register, NHPCO will calculate the rates for every MSA and every state, as has been done in previous years.

As discussed in the FY 2006 Hospice Wage Index Final Rule, for FY 2006 only, a blended wage index value, comprised of 50 percent of the wage index had the Metropolitan statistical Area (MSA) designations remained in effect and 50 percent of the wage index under the Core Based Statistical Area (CBSA) designations was used. Thus the special codes employed in FY 2006 are not in effect for FY 2007.

Cap amount:  Overall aggregate payments made to a hospice are subject to a “cap amount,” calculated by the intermediary at the end of the hospice cap period. The cap period runs from November 1st of each year through October 31 of the next year. The total payment made for services furnished to Medicare beneficiaries during this period are compared to the “cap amount” for this period. The annual cap amount is adjusted each year when the rates for the coming year are released.  It applies to Medicare patients in the aggregate, rather than individual patients.

The latest hospice cap amount for the cap year ending October 31, 2006, is $20,585.39.

Reference to the hospice cap is discussed further in the Pub.100-04, Medicare Claims Processing Manual, Chapter 11, Processing Hospice Claims, section 80.2.

A copy of the August 4, 2006 CMS Change Request, Number 5254, is available on CMS Web site