CMS Announces Hospice Capitation Rates for Medicare Advantage

The U.S. Centers for Medicare and Medicaid Services (CMS) recently released the capitation rates for hospice care through the value-based insurance design model (VBID), often referred to as the Medicare Advantage hospice carve-in.

During the first month of a patient’s stay, Medicare Advantage organizations (MAOs) will receive Medicare A/B capitated payments, a Medicare Advantage rebate, and a monthly prescription drug payment.  MAOs will also receive a capitation payment corresponding to the number of days the patient spent in hospice during that month.

This payment would total $1,764 for the first six days of the patient’s hospice stay and $3,330 for days seven through 15.  The MAO would then receive $5,291 for day 16 through the end of the first month.  For the second month of the hospice stay through the end, the monthly capitation payment would total $5,187.

Hospice capitation rates were determined using policies that govern rate setting under Medicare Advantage, including the use of base experience for multiple years, localized rates developed through use of an average geographic adjustment, and base data trended to contract year.

Medicare Advantage plans currently pay a capitated monthly rate for services provided under Medicare Parts A and B, exclusive of costs related to hospice care.  However, under the hospice carve-in, Medicare Advantage plans will provide more benefits than they presently do.  These changes are designed to increase access to hospice services and facilitate better coordination of care between hospice providers and clinicians.

The Medicare Advantage program has experienced significant growth in recent years.  According to CMS, the number of participating beneficiaries tripled to nearly 1.2 million enrollees in 30 states from 2019 to 2020.  The program will be available in all 50 states and U.S. territories in 2020.

For more information, please contact Jason E. Bring .