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GAO-13-839R 1 (2013-08-15)

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G     A              U.S. GOVERNMENT ACCOUNTABILITY OFFICE
441 G St. N.W.
Washington, DC 20548


B-325065


August 15, 2013

The Honorable Max Baucus
Chairman
The Honorable Orrin G. Hatch
Ranking Member
Committee on Finance
United States Senate

The Honorable Fred Upton
Chairman
The Honorable Henry A. Waxman
Ranking Member
Committee on Energy and Commerce
House of Representatives

The Honorable Dave Camp
Chairman
The Honorable Sander M. Levin
Ranking Member
Committee on Ways and Means
House of Representatives

Subject: Department of Health and Human Services, Centers for Medicare & Medicaid Services:
       Medicare Program; FY 2014 Hospice Wage Index and Payment Rate Update; Hospice
       Quality Reporting Requirements; and Updates on Payment Reform

Pursuant to section 801 (a)(2)(A) of title 5, United States Code, this is our report on a major rule
promulgated by the Department of Health and Human Services (HHS), Centers for Medicare &
Medicaid Services entitled Medicare Program; FY 2014 Hospice Wage Index and Payment
Rate Update; Hospice Quality Reporting Requirements; and Updates on Payment Reform
(RIN: 0938-AR64). We received the rule on August 2, 2013. It was published in the Federal
Register as a final rule on August 7, 2013, with an effective date of October 1, 2013. 78 Fed.
Reg. 48,234.

The final rule sets forth the hospice payment rates and the wage index for fiscal year (FY) 2014,
and continues the phase out of the wage index budget neutrality adjustment factor (BNAF).
Including the 15 percent BNAF reduction for FY 2014, the total 5-year cumulative BNAF
reduction in FY 2014 will be 70 percent. The BNAF phase-out will continue with successive
15 percent reductions in FY 2015 and FY 2016. This final rule also clarifies how hospices are to
report diagnoses on hospice claims and provides updates to the public on hospice payment
reform. Additionally, this final rule changes the requirements for the hospice quality reporting
program by discontinuing currently reported measures and implementing a Hospice Item Set
with seven National Quality Forum (NFQ) endorsed measures beginning July 1, 2014, as


GAO-13-839R

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