CMS published a proposed rule May 1 that would update and revise the Medicare hospice wage index for FY 2009. CMS proposes phasing out the wage index budget neutrality factor over three years, which would reduce Medicare reimbursement by $2.29 billion over five years. The budget neutrality factor reform combined with other wage data proposals in the rule would result in a 1.1% decrease in Medicare hospice rates in FY 2009, although CMS notes the reduction in hospice payments would be offset by the annual market basket increase, which is expected to be 3% for RY 2009 (the actual update will not be available until July). The rule also would clarify two wage index issues related to the definition of rural and urban areas and to multi-campus hospital facilities. CMS will accept comments on the proposal until June 27.