Yesterday's (2/19) Denver Post and its Internet iterations carried a brief announcing that the just-signed federal stimulus package would benefit the Denver Hospice, the largest provider of end-of-life care in the Denver area, by $800,000 (see http://tinyurl.com/bbgw9t). For those who were wondering what hospice is doing in the stimulus package, I offer a brief explanation. Hospice care is covered by Medicare, and the rates Medicare pays are subject to an annual cost-of-living increase and are regionally adjusted based on local labor and other cost variations. Complex negotiations a decade ago over how to fairly apportion the wage index between rural and urban providers without hurting either too much resulted in the Budget Neutrality Adustment Factor (BNAF) to the hospice wage index.
Last year the Bush administration decided to eliminate the BNAF in phases over three years, starting Oct. 1, 2009, as a cost-cutting measure. Over the course of five years, it was predicted that eliminating the BNAF would reduce overall hospice rates by about 4.5 percent, which amounts over five years to a $2.2 billion reduction in Medicare spending on the $10 billion industry that hospice has grown into. Hospice representatives challenged the administration's move to eliminate the BNAF in Congress and the courts, but the first phase (25 percent of the total elimination of the BNAF) went into effect Oct. 1.
With its history of allies and legislative support in Congress, hospice got a provision included in the stimulus bill that would delay the BNAF's elimination for one year, retroactive to Oct. 1. That restored hospice rates to the level they would have been at if the BNAF never been eliminated, which industry leaders estimate amounts to about $135 million over the course of the year. Some of that is for care already provided and hospices are in line to collect some additional payments for that care. The Denver Hospice believes it is in line for an additional $800,000, which is its proportional share of the stimulus support for the hospice industry as a whole.
What happens in the next fiscal year, starting Oct. 1, 2009, is still to be determined. As it now stands, the cuts ordered last year by the Bush Administration would be implemented but a year later than first ordered, and perhaps with the phases readjusted. But perhaps all of that will be reconsidered by the new administration. What remains unanswered is whether hospices are overpaid or underpaid. The recent rapid growth of the for-profit sector of the hospice industry suggests one answer, but many agencies providing hospice care in patients' homes across vast rural stretches, or responding to the needs of patients for expensive treatments to relieve their pain and other symptoms of terminal illness, all while shelling out increased travel costs for gas and increased labor costs in an era of nursing shortages, draw a different conclusion. One thing we know is that America's hospices, caring for 1.4 million terminally ill patients in 2007, have become an ever more mainstream participant in the health care system and a significant part of the Medicare budget -- and thus a target for more government scrutiny.
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