As more hospices hit Medicare cap, legislation calls for a moratorium
Hospices disagree and call for other solutions
Legislation introduced by Oklahoma lawmakers U.S. Sen. James Inhofe and U.S. Rep. John Sullivan calls for a three-year moratorium on efforts by the Centers for Medicare & Medicaid Services (CMS) to collect overpayments for hospice patient care.
While experts throughout the hospice industry agree that the Medicare hospice cap needs to be re-evaluated, there is disagreement about the need for a moratorium.
"A moratorium has the potential for unforeseen consequences," says Jonathan Keyserling, JD, vice president of public policy and counsel for the National Hospice and Palliative Care Organization (NHPCO) in Alexandria, VA. "We have to be cognizant of the federal budget process, and while the cap is a crude tool to contain expenses, it does provide some control," he says.
A moratorium would remove all controls and potentially place hospice organizations that do admit primarily long-stay patients at greater financial risk, he adds.
Another risk of a moratorium is the reduction of payments to hospice organizations across the board, says Greg Wood, LBSW, executive director of the Hospice of North Central Oklahoma in Ponca City and president of the Oklahoma Hospice Association. A moratorium might save money for some of the hospices that owe CMS now, but in the long run, CMS might reduce hospice payments in order to control costs and manage the budget, he says.
Wood questions the data that lawmakers Inhofe and Sullivan used as proof that Oklahoma hospices were in trouble. "The statement that 40% of Oklahoma hospices have hit the cap is not accurate," he says. There are 157 hospices in Oklahoma, with 99 of them handled by one Medicare intermediary and 58 handled by another, he explains. Forty percent of the 99 hospices have hit the cap, but there are no data released about the other 58 hospices, he says.
Based on feedback from association membership and leadership, the Oklahoma association does not support the moratorium, says Wood. The cap is not new, he points out. "It is described in the Conditions of Participation to which we all agree," Wood says.
In 1982, CMS began paying hospices a flat fee for care of hospice patients but designated a cap on the total amount that a hospice can be reimbursed for a patient's care. "It is an aggregate payment level, so we look at all patients admitted and multiply the cap level by total number of payments to get the total reimbursement for that year," says Wood. The cap was $21,410 per patient in 2007, he points out.
In 1998, limits on the number of days that a patient could receive hospice care were removed, which increased access to hospice for terminally ill patients with diseases other than cancer, says Wood. "Although a hospice may care for some patients longer than six months, most hospices care for a wide range of patients and the patients who are in hospice care for less time will bring the average number of days and the reimbursement level down below the cap level," he points out.
Smaller providers benefit from a moratorium
One of the supporters of the moratorium is Lois Armstrong, president and chief operating officer of Sojourn Care in Tulsa, OK, and one of the organizers of the National Alliance for Hospice Access (NAHA), an advocacy group committed to study and revision of the hospice cap.
"This issue became important to my partner and I when our hospice hit the Medicare cap in 2005," she says. "We received a demand letter for $2 million 18 months after we provided care for patients who did meet Medicare admission criteria," she says.
Armstrong and her business partner organized NAHA to pull together hospice organizations that might not be part of larger organizations and might feel the effects of the cap more dramatically, she explains. "If you are part of a larger organization or part of a chain, you can afford to pay money back to Medicare, but smaller, independent hospices have already spent the money on patient care and don't have the financial resources to meet the demand for repayment," she explains.
A key component of NAHA's advocacy effort is the moratorium that would stop the calculation of any 2006, 2007, or 2008 cap overpayment that has not yet been calculated, and stop collection of any cap overpayment that already has been calculated but not collected by CMS, says Armstrong. Review of the hospice cap and any changes to the cap might take two to three years, and independent providers cannot survive that length of time if they do not have a moratorium in place, she adds.
Four trends identified
The percentage of hospices that have exceeded the cap has grown from 1% to 6.8% in the past five years, admits Wood. Medicare fiscal intermediaries have reported four distinct trends that contribute to a hospice reaching the cap, he says. Reasons range from premature admission to hospice, to long lengths of stay and lack of administrative processes to handle discharges and financial monitoring. However, there are several ways that hospice managers can reduce their hospice's risk of reaching the cap, Wood adds.
The federal cap on hospice payments is an issue that needs to be reviewed in the context of all issues affecting hospice payments, Keyserling says. "The NHPCO has submitted a proposal that looks at all four levels of hospice care and adjusts geographical reimbursement rates," he says.
Per diem reimbursements vary according to geographical location, Wood says. A hospice providing services in an urban area might receive a higher per diem than a hospice operating in a different part of the state, he explains. "Even though per diem rates vary, the cap is the same for all hospices," Wood says. This variation means that providers receiving the higher per diem are more likely to reach the cap sooner than providers receiving the lower per diem, he explains. "Solutions to this problem would be the same per diem for all hospice organizations or a cap that is based on geographical differences," Wood says.
In addition to adjusting reimbursement rates or the cap itself, Wood also would like to see some long-term changes in the hospice Medicare program to ensure that potential problems within hospices are identified before they reach a crisis stage. "We should have more surveyors and more frequent surveys for hospice," he says. Hospices are not surveyed frequently, with some undergoing surveys every 10 years, and we've had an explosion of new hospice organizations, he says. The rapid growth of hospice means that surveyors don't get back to resurvey organizations in a timely manner, he says. "Home health agencies are surveyed every 36 months, and hospice should have the same oversight," he says. "This will require hospice managers to stay up-to-date on financial reports, monitoring quality of care, and documentation requirements."
Even without surveys, hospices should consider Additional Documentation Requests (ADR) from CMS as red flags to carefully review practices and processes, suggests Wood. The key is to address small problems before they become big problems, he adds.
Because many patients see hospice as a source of palliative care, many hospice owners and managers would like CMS to consider funding palliative care services separately, says Wood. "You may have a multiple sclerosis patient who would benefit from palliative care, but they might not be considered terminal for years," he says. "If CMS offered a palliative care benefit, we could still care for these patients and keep hospice care for terminally ill patients."
The hospice cap is a looming issue that needs to be addressed now, says Keyserling. The percentage of the total population of Medicare decedents who die of noncancer-related causes is 70%, and the percentage of Medicare decedents in hospice care that die of noncancer-related causes is 54%, Keyserling says. "As hospice moves toward the 70% of noncancer-related deaths, there will be longer stays and an increase in the number of hospices reaching the cap if no changes are made," he says.
Need More Information?
For more information about the Medicare hospice cap, contact:
- Lois Armstrong, c/o National Alliance for Hospice Access, 1220 N. Fillmore St., Suite 400, Arlington, VA 22201. Telephone: (866) 799-2080. Fax: (866) 916-5696. E-mail: [email protected].
- Jonathan Keyserling, JD, Vice President of Public Policy, National Hospice and Palliative Care Organization, 1700 Diagonal Road, Suite 625, Alexandria, VA 22314. Telephone: (703) 837-1500. Fax: (703) 837-1233. E-mail: [email protected].
- Greg Wood, LBSW, Executive Director, Hospice of North Central Oklahoma, 1904 N. Union, Suite 103, Ponca City, OK 74601. Telephone: (800) 814-9102 or (580) 762-9102. E-mail: [email protected].
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