Medicare Compliance & Reimbursement

Non-cancer diagnoses growing for hospice patients, along with lengths of stay.

Providers shouldn't be surprised if new Medicare hospice payment policies are soon afoot.

The Medicare Payment Advisory Commission is eyeing the hospice payment system for possible changes (see related story, this issue). Here's the crucial data the influential advisory body to Congress is considering in making its recommendations:

• Medicare expects to spend $9.8 billion on hospice services in 2006. Hospice payments will increase approximately 9 percent per year through 2015.

• Medicare pays for 88 percent of hospice care.

• Routine hospice days are the most common hospice service by far at a 93-percent billing rate in 2003.

• The ratio of fee-for-service Medicare beneficiaries electing hospice increased from 22 percent in 2000 to 31 percent in 2004.

• From 2000 to 2004, the number of hospice users grew 50 percent, the number of billed hospice days doubled, and payments grew 130 percent.

• While the median length of stay held steady at about two weeks from 2000 to 2004, the mean LOS increased from 51 to 67 days. "The mean length of enrollment was driven up by the upper end of the distribution having increasingly longer lengths of stay before they died," explains MedPAC staffer Kathryn Linehan in the Commission's recent meeting.

• In 2003, more than half of hospice patients had a non-cancer terminal diagnosis. Patients with non-cancer diagnoses have longer lengths of stay on average.

• Forty-seven percent of hospices are freestanding for-profits in 2006, up from 31 percent in 2001.

• MedPAC staff cited research pegging hospice profit margins at 10 percent (Government Accountability Office), 11 to 19 percent (National Hospice and Palliative Care Organization) and 2 percent for non-profits versus 18 percent for for-profits (Journal for Palliative Medicine).