Non-hospice spending grabs MedPAC’s attention. While everyone seems to agree that hospice saves Medicare money, the Medicare Payment Advisory Commission still wants to slash funds from hospice providers’ rates. In the advisory body’s Jan. 11 meeting, commissioners unanimously voted to recommend that Congress eliminate the update to the hospice base rate for 2025. Why? Hospices saw a 10 percent jump in agency numbers in 2022, and also saw users and lengths of stay increase in that year, MedPAC noted in its presentation at the meeting. And hospices racked up a 13.3 percent profit margin in 2021, the last year available. Even though the margin is projected to drop to 9 percent in 2024, commissioners voted to recommend a rate freeze that would strip up to $5 billion from hospice spending over five years. “It’s kind of dizzying right now, what’s happening in the hospice space,” noted MedPAC Vice Chair Amol Navathe in the meeting.
“This recommendation is offered at a time when hospice care costs have risen faster than any inflation update provided by [the Centers for Medicare & Medicaid Services],” National Association for Home Care & Hospice President William Dombi says in a release. “A rate freeze would interfere with the progress made through hospice wherein highly patient-centered care, controlled by the patient at the most important point of an individual’s life, offers Medicare with significant financial savings while providing incredible end-of-life care,” Dombi protests. “At a time when costs have been increasing across the board and hospices are competing for a limited healthcare workforce, keeping hospice payments flat would put the squeeze on hospice providers even as patient demand for hospice care is expected to keep growing,” criticizes the National Hospice and Palliative Care Organization’s Ben Marcantonio in a release. Expect More Scrutiny Of Non-Hospice Spending In addition to surging statistics in the hospice market, non-hospice spending for hospice beneficiaries is providing troublesome, commissioners indicated. It seems the March report to Congress will urge scrutiny of such spending, although at least one commissioner advised caution on that front. “I don’t think that bundling … or a payment penalty for non-hospice services is a good policy option because it has the unintentional consequence at the end of life … as positioning the hospice agency as the police … and breaking that sacred relationship,” noted Commissioner Brian Miller, a physician and professor at Johns Hopkins University. “We should be cautious about over-regulatory action in that space because we want to encourage hospice use when the beneficiary feels it is appropriate, and allow them to still occasionally have access when they change their mind,” Miller said in the meeting. Watch for MedPAC’s March report for more details surrounding its hospice rate-setting recommendation.