The issue of Medicare's hospice cap or aggregate, average per-patient ceiling on Medicare payments to hospices is coming to a boil -- at least in that corner of the blog and Twitter world where hospice and palliative care posters congregate.
The cap is a provision of the 1982 law that created the Medicare hospice benefit, included for the purpose of ensuring that this new model of care would not prove more costly than the conventional care default for terminally ill patients. Since then, hospice has grown into a $10 billion industry that served 1.4 million dying Americans in 2007. The rapid growth in Medicare outlays for hospice has attracted the attention of the Medicare Payment Advisory Commission (MedPAC) and others in government concerned about extended lengths of stay, questionable admissions practices and the potential for excessive profits in hospice.
The hospice cap has grown with inflation from the original amount of $6,500 per patient to $22,380 currently, but is not adjusted for regional differences in operating costs. The average, aggregated cap amount is calculated for each hospice at the end of its fiscal year based on the total number of unduplicated Medicare beneficiaries served during the prior year. At one time, exceeding the hospice cap was considered a near impossibility. Today some hospice providers hold the opinion that in order to exceed the cap, one must be doing something fishy -- perhaps cherry-picking long-stay, uncomplex hospice patients from nursing homes and avoiding the more typical, challenging, short-stay patients with acute needs who are enrolled in hospice for seven days or less, and who would naturally counterbalance long-stay patients in a hospice's cap calculation. MedPAC has concluded that the cost of providing hospice care is highest in the days immediately after hospice enrollment and then before the patient's death, and has proposed that Congress reduce hospice's daily reimbursement rates between those high cost periods for long-stay patients using a payment model resembling a U-shaped curve. Hospices that wish to retain the cap also feel that this is not the right issue on which to expend the industry's goodwill.
Opponents of the hospice cap say that the retroactive calculation and subsequent demands to repay the government for care already given can be a nasty financial surprise, especially given the complications of tracking patients who come in and out of hospice or cross fiscal years. They point out that this provision of the hospice benefit designed to make sure hospice care remains cost-effective to the government is a blunt tool from another era very different than today, when a vastly larger proportion of hospice patients have diagnoses other than cancer and/or reside in nursing homes. According to Medicare fiscal intermediary data, in 2005, 44 out of 91 hospices in Alabama had cap overpayments totalling $48 million, 47 out of 85 hospices in Mississippi owed $46 million, and 47 out of 112 hospices in Oklahoma owed $28 million. Those are the hardest hit states.
The National Alliance for Hospice Access (NAHA), a coalition of 500 hospices formed to address the cap "crisis", with an Arlington, VA, office and website at http://tinyurl.dgkbqg, worked with the National Hospice and Palliative Care Organization (NHPCO) and other professional groups in the ad-hoc Medicare Hospice Benefit Working Group last winter to mobilize against Bush Administration cuts in hospice rates and MedPAC scrutiny. NAHA recently announced a Leadership Summit to be held April 7, 2009, in Tulsa, OK, to mobilize advocacy for a moratorium on enforcing the cap until Congress can craft a fiscally responsible long-term solution for hospices facing cap problems. Stuart Haugen, a Paris, France-based media commentator, has been using Twitter to help spread NAHA's views.
See http://is.gd/nUrA for an alternate view and nuanced argument in favor of keeping the hospice cap, posted last April by a blogger who calls himself hospice_guy. I can't go to to next month's meeting in Tulsa, but I will be at NHPCO's conference in Washington, DC, April 22-25, and will try to sample what hospice executives are saying about the cap.
Having worked for two hospice agencies as an intake nurse, one for-profit and another NFP, I've witnessed the different attitudes toward patient selection. I found the FP wanted to admit as many patients as possible with preference for those with a potential long stay and really shied away from the ones that were very close to death. It's this type of business practice that makes the cap seem necessary.
However, if Medicare loosed up on the strict admission guidelines, extending hospice to those with a life expectancy of 1 year or less, everyone would benefit. More patients would have access to expert palliative care, Medicare would save money (studies show that hospice care saves our government a lot of money) and hospices wouldn't get stuck having to pay back so much money for services already rendered. While large FP hospices are usually able to pay back cap amts, smaller and NFP hospices can really be hit hard by large repayments.
Posted by: Angela | March 31, 2009 at 08:50 AM