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MedPAC approved revisions to the payment system for hospice care providers
Medicare spending is on the rise due to for-profit organization involvement and longer lengths of stay.
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In January, the Medicare Payment Advisory Commission approved recommendations from staff members to revise the Medicare payment system for hospice care providers. MedPAC will issue the recommendations in a report to Congress in March; the recommendations are scheduled to go into effect in 2013.
The decision came out of a November 2008 meeting at which MedPAC heard recommendations from staff members to change the payment system, require more prerequisites for certification and recertification, gather additional visit data and require an Office of Inspector General investigation of financial ties between nursing homes and hospices.
When the current Medicare payment system was implemented in 1983, it was designed for non-profit groups with religious and community affiliations to deliver hospice care. However, in June 2008 MedPAC reported that since the year 2000 hospice care as been delivered mostly by for-profit organizations and hospices.
Additionally, longer hospice stays for illnesses such as Alzheimer’s and congestive heart failure are driving up Medicare spending. According to the report, the average length of stay is 23% longer for hospices whose payments exceed the per-beneficiary limit on Medicare payments — dubbed a ‘hospice cap’ — compared with hospices below the cap. Lengths of stay are also about 45% longer in for-profit hospices compared with not-for-profit facilities.
Revising the payment system
MedPAC’s recommendations for the payment system require Congress to direct the Secretary of the U.S. Department of Health and Human Services to take action. Their recommendations include higher payments each day at the start of the episode that decrease to lower payments as the length of the episode increases. At the end of the episode, relatively higher payments will be required to cover the costs associated with patient death.
Prior to the implementation of the change in 2013, MedPAC recommends a brief transition period. Additionally, the commission suggests the changes be applied using a budget neutral approach during the first year.
Additional requirements
Prior to a patient’s 180th day recertification, MedPAC recommends a hospice physician or nurse visit the patient to determine their continued eligibility. According to the commission, this should take place prior to each recertification and the physician or nurse should confirm the validity of each visit.
The certification and recertification process should also include a brief narrative to describe the clinical basis of the patient’s prognosis. In hospices where stays exceeding 180 days account for 40% or more of total cases, the commission recommends such stays be medically reviewed. To help enforce any new and existing policies relevant to the hospice benefit, Congress should provide CMS with the necessary resources.
Recommended Investigations
Based on the current involvement of for-profit organizations in hospice care, the commission recommends the OIG investigate conflicts of interest that may exist between hospices and long-term care facilities such as nursing homes or assisted living facilities due to the prevalence of financial relationships between them. According to MedPAC, the ability of such relationships to influence admissions to hospice should also be investigated, along with the differences in patterns of nursing home referrals to hospice.
The OIG should also determine how appropriate enrollment systems with unusual utilization practices for hospices may or may not be along with the suitability of hospice marketing materials and other admissions systems. Any correlations between marketing or admission practice flaws and length of stay should also be examined.
Lastly, the commission recommends the secretary collect further data from claims and as a condition of payment and hospice cost reports.
While the MedPAC has identified an important area of cost savings, the detailed rules will be important to understand the clear impact. Hospice services not only provide cost savings, but also provide care to patients and families. Details of which patients (with which specific diseases), in which settings (home or nursing home or inpatient) and what specific treatments increase the cost require scrutiny.
– Biren Saraiya, MD
HemOnc Today Editorial Board member