Home Health & Hospice Week

CMS picking on most vulnerable providers, industry charges.

Weathering reimbursement cuts is tough for any provider, but the new proposed cuts to hospice wage index will hurt those that can least afford it.

The proposed 4 to 5 percent Medicare payment cuts to hospice rates will be tough on all providers, notes Margaret Rudnick with the Illinois Hospice & Palliative Care Organization. The high price of gas and the nursing shortage both leave hospices strapped already, Rudnick observes.

And the average profit margin for hospices is below the amount of the cuts (see related story, p. 130).

But hospices that are small and that serve rural areas will be hit especially hard, industry representatives say. The cut "is primarily picking on small businesses and rural America," Jeff Lycan with the Ohio Hospice & Palliative Care Organization tells Eli.

The Centers for Medicare & Medicaid Services claims the wage index reduction won't unduly affect rural hospices because the rural payment floor protects them, according to the proposed rule in the May 1 Federal Register.

But CMS admits in its own impact chart that rural hospices will see a 0.9 percent decrease to payments in 2009 compared to 1.1 percent for urban hospices, which isn't a big difference.

And CMS maintains that beneficiaries' access to hospice care won't be affected, considering the significant growth in the hospice market in recent years.

The reality: "There are rural areas in Virginia served by very small programs to which this is a real threat," reports Susan Warinner Hogg with the Virginia Association for Hospices. "Where will access be then?"

Oregon has significant areas that are rural, remote and frontier, says Ann Jackson with the Oregon Hospice Association. This cut seriously threatens hospices in these very rural counties.

Example: One such county is Harney, which is served by Harney County Hospice, Jackson relates. That provider "does not and cannot enjoy the same economies of scale of hospices in urban areas or more populous rural areas," Jackson tells Eli.

Harney County Hospice already operates "at a great disadvantage because its rate of reimbursement fails to take into account ... the 'windshield' time necessary to cover its vast service area," Jackson says. "Gas prices in Harney County are certainly not less than in urban areas." The hospice's patients generally aren't in close enough proximity to each other to allow the hospice nurse to visit more than a few patients a day.

"I cannot agree that people who have elected to live in the more rural and remote parts of the United States, by default, have opted to not have hospice and palliative care at the end of life," Jackson concludes. "A specialized cancer center may be unrealistic. Hospice is not!"

Impact: Hospices seeing the steepest Medicare payment rate reductions under the [...]