Build Value, Manage the Hospice Cap, Plan for FY 2016 Wage Index Changes

The Medicare hospice environment continues to challenge every hospice provider.  The aggregate hospice cap remains a barrier to patient access and a devastating financial trap for unwary hospices. Nationally, the percentage of Americans receiving any hospice care before they die has been stagnant at only about 45% since 2007 and hospice length of stay appears to be declining in most markets.  Provider economics are being squeezed at the top line by political pressure to reduce hospice payments, while direct patient care costs continue to increase, driven by caregiver salaries, benefits, and pharmaceuticals.  Administrative costs are also escalating, driven mainly by increasing regulation.

Now, CMS’ FY 2016 Hospice Wage Index Proposed Rule

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 suggests a “U shaped” hospice cost curve and proposes that CMS will pay 16% more for routine home care days until a patient’s stay exceeds 60 days, and 9.2% less thereafter.  In addition CMS proposes a Service Intensity Add-on payment (SIA) that will pay per hour for (only) RN and SW visits in the last seven days.   This is an extraordinary change that, for most hospices that are not hospital-owned, will mean materially lower, and far less predictable, Medicare payments per patient day.

Solstice Healthcare principals are uniquely experienced hospice owners and operators.  We work directly with a select number of Clients to identify, quantify and manage the risks and opportunities most critical to sustaining and building their hospices’ value.

Solstice Healthcare has unique expertise with the Aggregate Hospice Cap.  We have assisted Clients in:

  • recovering or avoiding payment of millions of dollars of inaccurate Cap demands they did not owe;
  • forecasting and managing the Proportional Hospice Cap simply and effectively, and
  • valuing the hospice they were buying or selling, especially when the hospice cap is a value issue.

We also assist our Clients plan and improve their financial performance; our Clients:

  • already understand the impact of the FY 2016 wage index proposed rule on their 2016 financials, and are planning for it;
  • have a financial plan and metrics that compare their financials to their competitors and to regional benchmarks;
  • have simple, effective performance metrics that guide their key managers, and
  • consistently reduce administrative costs while improving compliance.


We can help you, please call us.