Hospice group hails shift on payment adjustment

An association representing hospice providers said it was pleased that the CMS will phase in the elimination of the so-called budget-neutrality adjustment factor for hospice reimbursement over seven years, which was included in the agency's proposed rule on July 30. The calculation is used to ensure equitable reimbursement for hospice providers in different geographic locations, said Jon Radulovic, vice president of communications at the National Hospice and Palliative Care Organization.

“The administration decided last year to remove that completely, and that's not a good thing,” Radulovic said of the calculation, which is commonly referred to as the BNAF. “It's been built around that. To take it away is a real devastating blow. Seven years give hospices a little time to adjust their business models accordingly.”

As a result of the rule, the CMS will reduce the BNAF by 10% in fiscal 2010 and by 15% each year from fiscal 2011 through fiscal 2016. In the rule, the CMS also called for home health agencies to receive an inflation update of 2.2% for 2010, and proposed changes to its outlier policy.

“We appreciate that the administration understands that the impacts are hard on hospices during this difficult economic time, but we need to be attentive to other issues,” Radulovic said, adding that advocacy efforts will continue.

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