Eli's Hospice Insider

Move could lengthen hospital stays unnecessarily, CMS counters.

Hospice lengths of stay may get even shorter for patients referred by hospitals if the Centers for Medicare & Medicaid Services listens to the HHS Office of Inspector General.

In a new report, the OIG recommends that CMS institute a proration of the hospital DRG payment when the hospital discharges a patient “early” to hospice. “Medicare could have saved $602.5 million for calendar years 2009 and 2010 by applying a hospital transfer payment policy for early discharges to hospice care,” the OIG estimates in the report.

Reminder: Hospitals already receive prorated DRG payments for some patients that transfer to home care under the post-acute care (PAC) transfer adjustment.

About 30 percent of all hospital discharges to hospice were early discharges that would have received per diem payments rather than full payments under a hospital transfer payment policy, the OIG says. “In addition, this transfer payment policy would not have caused a significant financial disadvantage for hospitals or disproportionately affected any hospital,” the watchdog agency claims.

But CMS isn’t so sure. “There is a tangible financial incentive for hospitals to initially admit hospice-bound beneficiaries as hospital inpatients,” the agency allows in its response to the report. But “adopting a transfer policy to the hospice setting would produce lower than estimated savings by discouraging hospitals from making transfers to more appropriate and cost effective care settings.”

Note: See the report at http://oig.hhs.gov/oas/reports/region1/11200507.pdf.