Home Health & Hospice Week

Massive hospice growth worries advisory body to Congress.

The Medicare Payment Advisory Commission may soon use the new hospice claims data you're providing to recommend serious cuts to hospice payment rates.

Major growth in Medicare's hospice spending has Medicare commissioners worried. Spending tripled between 2000 and 2007, pointed out Med-PAC staffer Jim Mathews in the commission's March 6 meeting. 

"It is no longer a niche benefit," Mathews said. Medicare spent more on hospice in 2007 than on inpatient rehab, critical access hospices, clinical lab services and a number of other services, he noted.

That growth, along with other demographic changes to providers and beneficiaries, is alarming commissioners. "We've had suddenly this rapid transformation of an industry and of utilization," said commissioner William Scanlon, formerly with the Government Accountability Office. "The transformation in this industry has been this influx of for-profit organizations."

"Things are headed ... down a path that is troubling, particularly looking at the change in the composition of the industry and the new entrants," agreed MedPAC chair Glenn Hackbarth. "Clearly people see ... a financial opportunity here," said Hackbarth, former deputy administrator of the Centers for Medicare & Medicaid Services forerunner, the Health Care Financing Administration.

"There's something clearly screwy going on in the hospice industry," summed up commissioner Nancy Kane, a former physical therapist who now is with the Harvard School of Public Health.

Besides possible abuse, commissioners wondered whether the increasing lengths of stay and increasing ratio of non-cancer patients was leading to the hospice benefit becoming a de facto long-term care benefit.

Dissent: But not all commissioners had it out for the hospice industry. "This service seems to save [Medicare] money," noted MedPAC vice chair Robert Reischauer, a former director of the Congressional Budget Office. Data shows hospice use saves Medicare money for the first two months of hospice care, breaks about even for six to seven months and then starts to cost more than fee for service Medicare after that point.

The money-saving service "is growing great guns," Reischauer noted. "Are you wondering what we're struggling for?"

The rebuttal: Hospice industry representatives shared some of MedPAC's concerns about industry growth, but were quick to argue against any drastic moves that would punish all providers.

There's been "a huge growth spurt in our industry," National Hospice and Palliative Care Organization head Don Schumacher told Med-PAC in the meeting's public comment period. That jump "is causing many of us sleepless nights and quite a bit of worry," Schumacher admitted.

But the Commission shouldn't recommend that Congress "use a blunt instrument without looking at all of the detail that would go into the effect that that might have on a dying patient and family member anywhere in the United States."

Instead of focusing on whacking payments, CMS should be [...]