Medicare regulations provide for two caps on Medicare expenditures for hospice care, listed below:
The total payment for inpatient care is subject to a limitation that total inpatient days of care (general or respite) should not exceed 20 percent of the total days for which these patients elected hospice care. At the end of a cap period, the Medicare Administrative Contractor (MAC) calculates the percentage of inpatient days of care as a part of total days of care. The regulations for payment for inpatient care are found at §418.302(f) Payment procedures for hospice care.
Hospice Aggregate Cap
The hospice aggregate cap is an amount set by the Centers for Medicare and Medicaid Services (CMS) each year that is used to figure, in the aggregate, the maximum amount that a hospice will be reimbursed for Medicare hospice services. The aggregate cap limits the total aggregate payment any individual hospice can receive in a year. A hospice’s ‘‘aggregate cap’’ is calculated by multiplying the number of beneficiaries who have elected hospice care during an accounting year by a per beneficiary “cap amount.” The Act established the per-beneficiary cap amount and provides an annual increase to the cap amount based on the rate of increase in the medical care expenditures category of the Consumer Price Index. A hospice’s aggregate cap is compared with the total Medicare payments made to the hospice during the same accounting year. Any Medicare payments in excess of the aggregate cap are considered overpayments and must be returned to Medicare by the hospice. The regulations for the hospice aggregate cap are found at § 418.309 Hospice cap amount.
CMS Ruling on Aggregate Cap: On April 14, 2011, CMS issued a Ruling (PDF) establishing CMS policy related to when a hospice challenges the validity of the beneficiary counting methodology in its appeal of an overpayment determination for any hospice cap year ending on or before October 31, 2011.
Final guidance for the Aggregate Cap Calculation Methodology (CR7838)
Cap period means the twelve-month period ending October 31 used in the application of the cap on overall hospice reimbursement. The cap year runs from November 1 of each year until October 31 of the following year. Aggregate Cap Amount: 2011 Cap Year: $24,527.69
2012 Cap Year: $25,377.01 Click here for a list of aggregate cap amounts from 1984 to 2012.
Resources for the Medicare Hospice Caps
- Archived Medicare Hospice Wage Indices & Rates
- History of the Hospice Aggregate Cap
- Medicare Benefit Policy Manual (Chapter 9 – Coverage of Hospice Services Under Hospital Insurance. See Section 90 – Caps and Limitations on Hospice Payments (Rev. 156, 6-01-12)
- Medicare Hospice Cap Statute (Social Security Act §1814(i)(2)(A))
- Medicare Hospice Conditions of Participation
- MedPAC report: Medicare’s hospice benefit: Recent trends and consideration of payment system refinements (2006)
- Final guidance for the Aggregate Cap Calculation Methodology (CR7838)