Payment reforms for hospice care furnished under the Medicare program

(a) Adjusting payments for hospice care (1) In general Section 1814(i)(1)(C) of the Social Security Act (42 U.S.C. 1395f(i)(1)(C)) is amended— (A) in clause (iii)— (i) by moving such clause 6 ems to the left; (ii) by striking With respect to and inserting Except as provided under clauses (viii) through (x), with respect to; (iii) by inserting in a setting (as specified by the Secretary for purposes of clause (vii)) after hospice care furnished; (iv) by inserting for such setting after payment rates in effect; and (v) by striking under this clause and inserting under this subparagraph; (B) in clause (iv), by striking clause (ii)(VII) or (iii) each place such phrase appears and inserting clause (iii) or (iv) of paragraph (2)(D) or clause (ii)(VII), (iii), (viii), (ix), or (x) in each such place; and (C) by adding at the end the following new clauses: (vii) Prior to the beginning of a specified fiscal year (as defined in clause (xi)), the Secretary shall specify percentages by which the payment rates for hospice care consisting of services other than routine home care (and, for specified years beginning on or after October 1, 2034, for hospice care consisting of routine home care and other services included in hospice care) in effect for the preceding fiscal year shall be adjusted in such specified fiscal year to align such rates with the costs of such care. In specifying such percentages— (I) the Secretary shall take into account changes in the average cost of such care and such other factors as determined appropriate by the Secretary; and (II) the Secretary may specify different percentages for such care based on the setting (as specified by the Secretary) in which such care is furnished. (viii) (I) With respect to routine home care furnished during fiscal year 2030, the payment rates for such care shall be equal to the sum of— (aa) a per diem amount (which may include an a case mix adjustment to account for variations in cost among different units of service) reflecting the cost of routine home care not consisting of direct patient care for nursing care, physical therapy, occupational therapy, speech-language pathology services, medical social services (other than counseling services), home health aide services, and physician services (other than such services that are considered administrative services); and (bb) subject to such frequency limits as may be specified by the Secretary, a per visit amount (which may vary depending on the type and duration of the visit, as determined appropriate by the Secretary) reflecting the cost of routine home care consisting of direct patient care excluded from the per diem amount established under item (aa) (other than, in the case of such care furnished at a skilled nursing facility or nursing facility (as defined in section 1919(a)), the component of such rates attributable to home health aide services). (II) With respect to routine home care furnished during fiscal year 2031 or a subsequent fiscal year, the payment rates for such care shall be equal to the sum of— (aa) the per diem amount attributable to hospice care described in subclause (I)(aa) in effect under this clause for the preceding fiscal year, adjusted, in the case of a specified fiscal year, by the percentages specified pursuant to clause (vii) for such specified fiscal year, increased by the market basket percentage increase (as defined in section 1886(b)(3)(B)(iii)) for the fiscal year (reduced in accordance with clause (iv)); and (bb) the per visit amount for hospice care described in subclause (I)(bb) in effect under this clause for the preceding fiscal year, adjusted, in the case of a specified fiscal year, by the percentages specified pursuant to clause (vii) for such specified fiscal year, increased by such market basket percentage increase for the fiscal year (reduced in accordance with clause (iv)). (III) For purposes of this clause, the term visit means, with respect to an individual receiving hospice care from a hospice program, in-person contact with such individual by staff of such program (or by others under arrangements with such program), not including any such contact conducted via telehealth or any other form of telecommunications technology. (ix) (I) With respect to routine home care consisting of specified hospice care (as defined in subclause (II)) furnished by, or under arrangements made by, a hospice program during the period beginning on October 1, 2027, and ending on September 30, 2032, in lieu of the rates otherwise payable under this subparagraph for such routine home care, the Secretary shall pay to the hospice program furnishing such care an amount equal to 400 percent of the amount payable for routine home care furnished in fiscal year 2027, increased by the market basket percentage increase (as defined in section 1886(b)(3)(B)(iii)) for the fiscal year (reduced in accordance with clause (iv)), or such other amount determined appropriate by the Secretary (which may vary based on the type of service furnished) for each day during which such specified hospice care was furnished. (II) For purposes of subclause (I), the term specified hospice care means any of the following items and services: (aa) Palliative chemotherapy or radiation furnished under the supervision of an oncologist and in accordance with accepted clinical guidelines. (bb) Palliative radiation therapy furnished under the supervision of an oncologist and in accordance with accepted clinical guidelines. (cc) Subject to such frequency limitations as the Secretary may establish, palliative blood transfusions furnished to an individual diagnosed with a blood cancer and furnished under the supervision of an oncologist and in accordance with accepted clinical guidelines. (dd) Palliative dialysis furnished under the supervision of a nephrologist, but only if— (AA) the individual receiving such palliative dialysis was receiving dialysis treatments prior to making the election under section 1812(d); and (BB) such individual has received fewer than 10 sessions of such palliative in-center or home hemodialysis or the equivalent for peritoneal dialysis or other modalities (or, in the case such individual has received 10 or more such sessions or the equivalent of such sessions, such session or equivalent of such session is subject to prior authorization). (x) With respect to hospice care consisting of services other than routine home care furnished during 2030 or a subsequent fiscal year, the payment rates for such care shall be equal to the rates in effect for such care for the preceding fiscal year, adjusted, in the case of a specified fiscal year, by the percentages specified pursuant to clause (vii) for such specified fiscal year, increased by the market basket percentage increase (as defined in section 1886(b)(3)(B)(iii)) for the fiscal year (reduced in accordance with clause (iv)). (xi) For purposes of this subparagraph, the term specified fiscal year means fiscal years 2030, 2035, and 2040. (xii) (I) The Secretary shall, with respect to cost reporting periods beginning during an applicable fiscal year (as defined in subclause (III)), conduct an audit of a representative sample of cost reports submitted by hospice programs. (II) The Secretary shall, for each applicable fiscal year, convene a technical expert panel for purposes of reviewing the methodology and results of the audit conducted under subclause (I) with respect to such applicable fiscal year. (III) For purposes of this clause, the term applicable fiscal year means fiscal years 2026, 2031, and 2036. (IV) The provisions of chapter 10 of title 5, United States Code, shall not apply to the panel established under subclause (II). (V) The Secretary shall provide for the transfer, from the Federal Hospital Insurance Trust Fund established under section 1817 to the Centers for Medicare & Medicaid Services Program Management Account, of $10,000,000 for each of fiscal years 2027, 2032, and 2037, to remain available until expended, for purposes of carrying out this clause.. (2) Outlier payments Section 1814(i) of the Social Security Act (42 U.S.C. 1395f(i)) is amended— (A) by redesignating paragraph (7) as paragraph (8); and (B) by inserting after paragraph (6) the following new paragraph: (7) (A) Subject to subparagraph (B), with respect to routine home care furnished during a fiscal year beginning on or after October 1, 2032, the Secretary may, if determined appropriate by the Secretary, provide an additional payment for types of such care (such as specified hospice care (as defined in paragraph (1)(C)(ix))) specified by the Secretary to account for unusual variations in the type or amount of such routine home care. (B) (i) The total amount of additional payments estimated to be made under subparagraph (A) for routine home care furnished during a fiscal year may not exceed 5 percent of the total amount of payments estimated to be made for such care furnished during such fiscal year without application of this paragraph for such fiscal year. (ii) The total amount of additional payments estimated to be made under subparagraph (A) for routine home care furnished during a fiscal year to an individual hospice program may not exceed 10 percent of the total amount of payments estimated to be made for such care furnished during such fiscal year by such program without application of this paragraph for such fiscal year. (C) The Secretary shall reduce any per diem rate applicable under paragraph (1) to routine home care furnished during the first fiscal year for which payments are made under subparagraph (A) by such proportion as will result, not taking into account any additional payments made under subparagraph (A) for such care furnished during such fiscal year, in an aggregate reduction of 5 percent in payment for such care furnished during such fiscal year.. (3) Plan of care requirements (A) In general Section 1814(a)(7)(B) of the Social Security Act (42 U.S.C. 1395f(a)(7)(B)) is amended by inserting and, with respect to the establishment of such plan, in the case such plan includes the furnishing of specified hospice care (as defined in subsection (i)(1)(C)(x)(II)), by a nephrologist (if such care is care described in item (dd) of such subsection) or by an oncologist (if such care is care described in any of items (aa) through (cc) of such subsection) who does not have a significant ownership interest in, or a significant financial relationship with, such hospice program, as determined by the Secretary, and, with respect to the periodic review of such plan, in the case such plan includes the furnishing of specified hospice care (as defined in subsection (i)(1)(C)(x)(II)), by the nephrologist supervising the furnishing of such care (if such care is described in item (dd) of such subsection) or by the oncologist supervising the furnishing of such care (if such care is described in any of items (aa) through (cc) of such subsection) after of the hospice program. (B) Effective date The amendment made by subparagraph (A) shall apply with respect to written plans for providing hospice care developed or reviewed on or after October 1, 2027. (4) Excluding home health aide services and homemaker from the definition of hospice care in certain circumstances (A) In general Section 1861(dd)(1)(D)(i) of the Social Security Act (42 U.S.C. 1395x(dd)(1)(D)(i)) is amended by inserting in the case such individual is not residing in a skilled nursing facility or a nursing facility, before services of a. (B) Homemaker services Section 1861(dd)(1)(D)(ii) of the Social Security Act (42 U.S.C. 1395x(dd)(1)(D)(ii)) is amended by inserting (but only if such individual is not residing in a skilled nursing facility or a nursing facility (as defined in section 1919(a)) or, if such individual is residing in such a skilled nursing facility or nursing facility, only if such services are provided on a volunteer basis in accordance with paragraph (2)(E)) after homemaker services. (C) Effective date The amendments made by subparagraphs (A) and (B) shall apply to items and services furnished on or after October 1, 2029. (5) Conforming adjustment to payment cap Section 1814(i)(2)(B) of the Social Security Act (42 U.S.C. 1395f(i)(2)(B)) is amended— (A) in clause (i), by striking clause (ii) and inserting clauses (ii) through (iv); (B) in clause (ii), by inserting, and subject to clause (iii), after subparagraph (A); (C) by striking clause (iii) and inserting the following new clause: (iii) For purposes of subparagraph (A), in the case of a specified fiscal year (as defined in paragraph (1)(C)(xi)), the cap amount for such year is the cap amount under this subparagraph for the preceding fiscal year, adjusted by the estimated percentage change in the total amount of payment made under this part for hospice care attributable to application of the amendments made by section 3(a)(1) of the Hospice Care Accountability, Reform, and Enforcement Act of 2026 for such specified fiscal year and then increased by the market basket percentage increase (as defined in section 1886(b)(3)(B)(iii)) for such specified fiscal year (reduced in accordance with paragraph (1)(C)(iv)).; and (D) by adding at the end the following new clause: (iv) For purposes of subparagraph (A), and subject to clause (iii), for a fiscal year beginning on or after October 1, 2035, the cap amount for such year is the cap amount under this subparagraph for the preceding fiscal year, increased by the market basket percentage increase (as defined in section 1886(b)(3)(B)(iii)) for such fiscal year (reduced in accordance with paragraph (1)(C)(iv)).. (b) Wage adjusting caps (1) In general Section 1814(i)(2) of the Social Security Act (42 U.S.C. 1395f(i)(2)), as amended by subsection (a), is further amended— (A) in subparagraph (A)— (i) by striking cap amount for the year (computed under subparagraph (B)) and inserting wage-adjusted cap (as defined in subparagraph (B)) for such program and year; and (ii) by striking subparagraph (C) and inserting subparagraph (E); (B) by redesignating subparagraphs (B) through (D) as subparagraphs (D) through (F), respectively; (C) by inserting after subparagraph (A) the following new subparagraphs: (B) For purposes of subparagraph (A), the term wage-adjusted cap means, with respect to a hospice program and a year, the product of— (i) the wage index ratio (as computed under subparagraph (C)) for such program and year; and (ii) the cap amount for such year (as computed under subparagraph (D)). (C) For purposes of subparagraph (B), the wage index ratio for a hospice program and a year is the ratio of— (i) the aggregate payments to such program for such year under paragraph (1); to (ii) the aggregate payments to such program for such year under such paragraph that would have been made had such payments not been subject to any wage adjustment.; (D) in subparagraph (D), as so redesignated— (i) by striking subparagraph (A) each place it appears and inserting subparagraph (B) in each such place; and (ii) by adding at the end the following new clause: (v) Notwithstanding the preceding provisions of this subparagraph, for a fiscal year beginning on or after October 1, 2026, the cap amount otherwise determined under this subparagraph for such fiscal year shall be decreased by the same percentage reduction (if any) applied to the amount of payment made under this part for such fiscal year under an order issued pursuant to section 251 of the Balanced Budget and Emergency Deficit Control Act of 1985. Any reduction to the cap amount for a fiscal year under the preceding sentence shall not be taken into account for purposes of determining the cap amount for any succeeding fiscal year.; and (E) by adding at the end the following new subparagraph: (G) Not later than 1 year after the date of the enactment of this subparagraph, and annually thereafter, the Secretary shall submit to Congress and make public on the website of the Centers for Medicare & Medicaid Services a report on the calculation of hospice programs’ cap amounts under this paragraph. Such report shall contain, with respect to each of the 5 most recent accounting years for which data is available and each hospice program receiving payments under this section for hospice care furnished during such year, the following: (i) Such program’s cap amount determined under such section. (ii) The percentage of such program’s cap amount paid to such program for such care. (iii) In the case payments to such program exceeded such cap, any amount recouped by the Secretary with respect to such program. (iv) The live discharge rate of such program.. (2) Implementation Notwithstanding any other provision of law, the Secretary of Health and Human Services may implement the amendments made by paragraph (1) by program instruction or otherwise. (3) Effective date The amendments made by subparagraphs (A) through (C) of paragraph (1) shall apply with respect to payment for hospice care furnished during fiscal years beginning on or after October 1, 2027. (c) Modification of requirements relating to short-Term inpatient care (1) In general Section 1861(dd) of the Social Security Act (42 U.S.C. 1395x(dd)) is amended— (A) in paragraph (1)— (i) in subparagraph (G), by striking consecutively over longer than five days and inserting for more than 5 days during any 90-day election period (or 60-day election period, as applicable) described in section 1812(d)(1); and (ii) in the flush matter following subparagraph (I), by adding at the end the following new sentence: In the case of an individual who receives short-term inpatient care described in subparagraph (G) consisting of respite care during an election period and the furnishing of such care is immediately preceded by a hospital stay (which may include a stay for observation) during which such individual made an election described in section 1812(d)(1) for the first time during such individual’s lifetime (or if such care is immediately preceded by the furnishing of hospice care consisting of general inpatient care and such general inpatient care is immediately preceded by such a hospital stay), the first continuous 15 days of such care shall not be taken into account for purposes of applying the limitation on the number of days during which such care may be furnished during an election period under such subparagraph, but only if such individual does not have sufficient caregiver support to be discharged to the individual’s home.; and (B) in paragraph (2)— (i) in subparagraph (A)(iii)— (I) by striking provides assurances satisfactory to the Secretary that and inserting ensures that the sum of; and (II) by striking 20 percent and inserting 10 percent (or a higher percent (not to exceed 20 percent) specified by the Secretary if determined necessary by the Secretary to ensure sufficient access to such inpatient care); and (ii) by adding at the end the following flush sentence: For purposes of subparagraph (A)(iii), the Secretary shall ensure that the limitation described in such subparagraph is applied, to the extent practicable, on a real-time basis.. (2) Allowing respite care to be furnished in residential care facilities Not later than October 1, 2027, the Secretary of Health and Human Services (in this paragraph referred to as the Secretary) shall revise section 418.108 of title 42, Code of Federal Regulations (or a successor regulation) to allow short-term inpatient care consisting of respite care (as described in section 1861(dd)(1)(G) of the Social Security Act (42 U.S.C. 1395x(dd)(1)(G))) to be furnished in residential care facilities (as defined by the Secretary) that only provide care to individuals receiving hospice care (as specified by the Secretary) and that meet such standards relating to health and safety as the Secretary may specify (which may be based on State licensure requirements applicable to such facilities). (3) Effective date The amendments made by paragraph (1) shall apply to hospice care furnished on or after October 1, 2027. (d) Hospital discharge planning requirements (1) In general Section 1861(ee)(2)(D) of the Social Security Act (42 U.S.C. 1395x(ee)(2)(D)) is amended— (A) by inserting, home health services, after including hospice care; (B) by striking including the availability of home health services through individuals and entities and inserting the following: including— (i) in the case of individuals who are likely to need home health services, the availability of such services through home health agencies; (C) by striking listed by the hospital as available and, in the case of individuals who are likely to need post-hospital extended care services, and inserting the following: listed by the hospital as available; (ii) in the case of individuals who are likely to need post-hospital extended care services,; (D) by striking the period and inserting; and; and (E) by adding at the end the following new clause: (iii) in the case of individuals who are likely eligible for hospice care, the availability of such care (including the availability of respite care described in subsection (dd)(1)(G)) through hospice programs that participate in the program under this title and that serve the area in which the patient resides.. (2) Effective date The amendments made by paragraph (1) shall apply with respect to discharges occurring on or after October 1, 2027. (e) Payment for respite care furnished in the home (1) In general Section 1861(dd)(1) of the Social Security Act (42 U.S.C. 1395x(dd)(1)) is amended— (A) in subparagraph (H), by striking and at the end; (B) by redesignating subparagraph (I) as subparagraph (J); and (C) by inserting after subparagraph (H) the following new subparagraph: (I) short-term home respite care furnished to an individual on or after October 1, 2029, that— (i) is furnished in the place of residence used as such individual’s home (other than a skilled nursing facility, a nursing facility (as defined in section 1919(a)), an assisted living facility (as defined by the Secretary), or another facility specified by the Secretary); (ii) is furnished on an intermittent, nonroutine, and occasional basis; (iii) is furnished for not more than 120 hours during any 90-day period described in section 1812(d)(1) (or, in the case of any 60-day period described in such section, for not more than 80 hours during such period); and (iv) meets such other requirements as the Secretary may specify.. (2) Payment rates Section 1814(i)(1)(C) of the Social Security Act (42 U.S.C. 1395f(i)(1)(C)), as amended by subsection (a), is further amended— (A) in clause (iii), by striking through (x) and inserting through (x) and clause (xiii); and (B) by adding at the end the following new clause: (xiii) With respect to short-term home respite care furnished to an individual during fiscal year 2030 or a subsequent fiscal year, the rates payable for such care shall be equal to the sum of the per diem rate established for routine home care for such fiscal year and an hourly rate established by the Secretary, except that in no case may such rate payable for such short-term home respite care furnished in a 24-hour period exceed the rate of payment for general inpatient care furnished during such a period..