C.F.R. » Title 42 » CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES › SUBCHAPTER B—MEDICARE PROGRAM › PART 418—HOSPICE CARE › Subpart G—Payment for Hospice Care

42 C.F.R. § 418.309

Hospice aggregate cap

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A hospice's aggregate cap is calculated by multiplying the adjusted cap amount (determined in paragraph (a) of this section) by the number of Medicare beneficiaries, as determined by one of two methodologies for determining the number of Medicare beneficiaries for a given cap year described in paragraphs (b) and (c) of this section.

(a) Cap Amount. The cap amount was set at $6,500 in 1983 and is updated using one of two methodologies described in paragraphs (a)(1) and (a)(2) of this section.

(1) For accounting years that end on or before September 30, 2016 and end on or after October 1, 2033, the cap amount is adjusted for inflation by using the percentage change in the medical care expenditure category of the Consumer Price Index (CPI) for urban consumers that is published by the Bureau of Labor Statistics. This adjustment is made using the change in the CPI from March 1984 to the fifth month of the cap year.

(2) For accounting years that end after September 30, 2016, and before October 1, 2033, the cap amount is the cap amount for the preceding accounting year updated by the percentage update to payment rates for hospice care for services furnished during the fiscal year beginning on the October 1 preceding the beginning of the accounting year as determined pursuant to section 1814(i)(1)(C) of the Act (including the application of any productivity or other adjustments to the hospice percentage update).

(b) Streamlined methodology defined. A hospice's aggregate cap is calculated by multiplying the adjusted cap amount determined in paragraph (a) of this section by the number of Medicare beneficiaries as determined in paragraphs (b)(1) and (2) of this section. For purposes of the streamlined methodology calculation—

(1) In the case in which a beneficiary received care from only one hospice, the hospice includes in its number of Medicare beneficiaries those Medicare beneficiaries who have not previously been included in the calculation of any hospice cap, and who have filed an election to receive hospice care in accordance with § 418.24 during the cap period as defined in § 418.3, using the best data available at the time of the calculation.

(2) In the case in which a beneficiary received care from more than one hospice, each hospice includes in its number of Medicare beneficiaries only that fraction which represents the portion of a patient's total days of care in all hospices and all years that was spent in that hospice in that cap year, using the best data available at the time of the calculation. The aggregate cap calculation for a given cap year may be adjusted after the calculation for that year based on updated data.

(c) Patient-by-patient proportional methodology defined. A hospice's aggregate cap is calculated by multiplying the adjusted cap amount determined in paragraph (a) of this section by the number of Medicare beneficiaries as described in paragraphs (c)(1) and (2) of this section. For the purposes of the patient-by-patient proportional methodology—

(1) A hospice includes in its number of Medicare beneficiaries only that fraction which represents the portion of a patient's total days of care in all hospices and all years that was spent in that hospice in that cap year, using the best data available at the time of the calculation. The total number of Medicare beneficiaries for a given hospice's cap year is determined by summing the whole or fractional share of each Medicare beneficiary that received hospice care during the cap year, from that hospice.

(2) The aggregate cap calculation for a given cap year may be adjusted after the calculation for that year based on updated data.

(d) Application of methodologies. (1) For cap years ending October 31, 2011 and for prior cap years, a hospice's aggregate cap is calculated using the streamlined methodology described in paragraph (b) of this section, subject to the following:

(i) A hospice that has not received a cap determination for a cap year ending on or before October 31, 2011 as of October 1, 2011, may elect to have its final cap determination for such cap years calculated using the patient-by-patient proportional methodology described in paragraph (c) of this section; or

(ii) A hospice that has filed a timely appeal regarding the methodology used for determining the number of Medicare beneficiaries in its cap calculation for any cap year is deemed to have elected that its cap determination for the challenged year, and all subsequent cap years, be calculated using the patient-by-patient proportional methodology described in paragraph (c) of this section.

(2) For cap years ending October 31, 2012, and all subsequent cap years, a hospice's aggregate cap is calculated using the patient-by-patient proportional methodology described in paragraph (c) of this section, subject to the following:

(i) A hospice that has had its cap calculated using the patient-by-patient proportional methodology for any cap year(s) prior to the 2012 cap year is not eligible to elect the streamlined methodology, and must continue to have the patient-by-patient proportional methodology used to determine the number of Medicare beneficiaries in a given cap year.

(ii) A hospice that is eligible to make a one-time election to have its cap calculated using the streamlined methodology must make that election no later than 60 days after receipt of its 2012 cap determination. A hospice's election to have its cap calculated using the streamlined methodology would remain in effect unless:

(A) The hospice subsequently submits a written election to change the methodology used in its cap determination to the patient-by-patient proportional methodology; or

(B) The hospice appeals the streamlined methodology used to determine the number of Medicare beneficiaries used in the aggregate cap calculation.

(3) If a hospice that elected to have its aggregate cap calculated using the streamlined methodology under paragraph (d)(2)(ii) of this section subsequently elects the patient-by-patient proportional methodology or appeals the streamlined methodology, under paragraph (d)(2)(ii)(A) or (B) of this section, the hospice's aggregate cap determination for that cap year and all subsequent cap years is to be calculated using the patient-by-patient proportional methodology. As such, past cap year determinations may be adjusted to prevent the over-counting of beneficiaries, subject to existing reopening regulations.

[48 FR 56026, Dec. 16, 1983, as amended at 76 FR 47332, Aug. 4, 2011; 80 FR 47207, Aug. 6, 2015; 83 FR 38655, Aug. 6, 2018; 86 FR 42606, Aug. 4, 2021; 88 FR 51199, Aug. 2, 2023; 89 FR 64272, Aug. 6, 2024]
Notes of Decisions
Cited in 28 cases (3 in the last 5 years), 2010–2022 · leading case: Hospice of New Mexico, LLC v. Sebelius, 691 F. Supp. 2d 1275 (D.N.M. 2010).
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Hospice of New Mexico, LLC v. Sebelius, 691 F. Supp. 2d 1275 (D.N.M. 2010). · cites it 41× “) For the reasons set forth below, the Court finds that 42 C.F.R. § 418.309 (b)(1) is invalid and should be set aside, Plaintiffs Motion for Summary Judgement/Stay (Doc.”
Los Angeles Haven Hospice, Inc. v. Sebelius, 638 F.3d 644 (9th Cir. 2011). · cites it 13× “(“Haven Hospice”), in this action challenging the so-called “hospice cap regulation,” 42 C.F.R. § 418.309 , pursuant to which Haven Hospice was ordered to repay more than $2.”
Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012 (9th Cir. 2013). · cites it 7× “HHS has adopted a regulation, 42 C.F.R. § 418.309 , to calculate the amount of this cap.”
Native Angels Home Care Agency, Inc. v. Sebelius, 749 F. Supp. 2d 370 (E.D.N.C. 2010). · cites it 48× “Department of Health and Hu *372 man Services (“Secretary” or “defendant”) and contends that 42 C.F.R. § 418.309 (b)(1) is invalid and contrary to law.”
Russell-Murray Hospice, Inc. v. Sebelius, 724 F. Supp. 2d 43 (D.D.C. 2010). · cites it 15× “See 42 C.F.R. § 418.309 . In pertinent part, the regulation provides that the “number of beneficiaries” portion of the statutory cap calculation includes [t]hose Medicare beneficiaries who have not previously been included in the calculation of any hospice cap and who have filed…”
Lion Health Servs., Inc. v. Sebelius, 689 F. Supp. 2d 849 (N.D. Tex. 2010). · cites it 8× “Plaintiff argued to the PRRB that the intermediary’s over *852 payment determinations were invalid in their entireties because they were calculated using a regulation, 42 C.F.R. § 418.309 (b)(1), that conflicts with the statute describing how the annual provider cap should be…”
Lion Health Servs., Inc. v. Sebelius, 635 F.3d 693 (5th Cir. 2011). · cites it 5× “PRADO, Circuit Judge: This appeal concerns the validity of 42 C.F.R. § 418.309 (b)(1) (the “Regulation”), a regulation promulgated by the Secretary of the U.”
Ihg Healthcare v. Sebelius, 717 F. Supp. 2d 696 (S.D. Tex. 2010). · cites it 11× “42 C.F.R. § 418.309 (b)(1) is unlawful and is hereby set aside; 3.”
Hospice of New Mexico, LLC v. Sebelius, 435 F. App'x 749 (10th Cir. 2011). · cites it 10× “The district court decided 42 C.F.R. § 418.309 (b), the United States Department of Health and Human Services’ (HHS) regulation implementing an annual cap on payments to hospice providers, is contrary to the plain language in 42 U.”
Affinity Healthcare Servs., Inc. v. Sebelius, 746 F. Supp. 2d 106 (D.D.C. 2010). · cites it 5× “See 42 C.F.R. § 418.309 . In pertinent part, the regulation provides that the “number of beneficiaries” portion of the statutory cap calculation includes [t]hose Medicare beneficiaries who have not previously been included in the calculation of any hospice cap and who have filed…”
Autumn Journey Hospice, Inc. v. Sebelius, 753 F. Supp. 2d 135 (D.D.C. 2010). · cites it 5× “See 42 C.F.R. § 418.309 . In pertinent part, the regulation provides that the “number of beneficiaries” portion of the statutory cap calculation includes [t]hose Medicare beneficiaries who have not previously been included in the calculation of any hospice cap and who have filed…”
Affinity Healthcare Servs., Inc. v. Sebelius, 720 F. Supp. 2d 12 (D.D.C. 2010). · cites it 3× “See 42 C.F.R. § 418.309 . In pertinent part, the regulation provides that the “number of beneficiaries” portion of the statutory cap calculation includes [t]hose Medicare beneficiaries who have not previously been included in the calculation of any hospice cap and who have filed…”
Show all 28 citing cases →
— 42 C.F.R. § 418.309(b) — 1 case
Los Angeles Haven Hospice, Inc. v. Sebelius, 638 F.3d 644 (9th Cir. 2011). “(“Haven Hospice”), in this action challenging the so-called “hospice cap regulation,” 42 C.F.R. § 418.309 , pursuant to which Haven Hospice was ordered to repay more than $2.”
— 42 C.F.R. § 418.309(b)(1) — 1 case
Hospice of New Mexico, LLC v. Sebelius, 691 F. Supp. 2d 1275 (D.N.M. 2010). “) For the reasons set forth below, the Court finds that 42 C.F.R. § 418.309 (b)(1) is invalid and should be set aside, Plaintiffs Motion for Summary Judgement/Stay (Doc.”
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