DETROIT – Hospice of Michigan, the state's largest hospice and one of the largest non-profit hospices in the nation, will have spokespersons available to comment on the New England Journal of Medicine's article on profits in the hospice industry published in the June 25 issue. The article, which is titled "A New Era of For-Profit Hospice Care - the Medicare Benefit," focuses on the evolution of the hospice benefit from the time it was created in 1982 to today when outsized profits in the publicly traded and for-profit sectors of the hospice industry have resulted in government scrutiny of how the benefit is being applied.

What evolved from a grassroots, volunteer-run social movement designed to honor the individual and bring a sense of humanity to the end-of-life experience has become a big business. The number of hospice providers grew from 2,300 in 2000 to 3,200 in 2007. The article suggests that Medicare may have unintentionally provided a financial incentive in its hospice payment system for providers to create and follow a business model where they care for patients with diagnoses that result in longer lengths-of-stay.

For-profit hospices, including publicly traded hospices, have capitalized on the Medicare payment system - selecting patients with diagnoses that predict longer lives while needing less intensive care. The profits being enjoyed by for-profit hospices have gotten the attention of Medicare. The Medicare Payment Advisory Commission (MedPAC), which advises Congress, has recommended substantial changes to hospice payments to improve accuracy, accountability and to increase physician involvement in end-of-life care.

Dottie Deremo, president and CEO of Hospice of Michigan, said, "The transition of hospice as a social movement to becoming big business has occurred in just 27 years. The MedPAC report accurately reflects the changes in the hospice sector that have especially intensified in the last 10 years.

"We are pleased that MedPAC has recommended changes to the hospice payment system because we have found the payment system currently in place rewards for-profit hospices that selectively admit patients requiring less intensive care and resources while they are reimbursed at the same rate as hospices like Hospice of Michigan that take all patients regardless of the complexity of the care and resources required.

"Hospice of Michigan supports MedPAC's endeavor to weed out the 'bad actors' in our field and to modernize the benefit taking into account intensity of care. We do, however, have concerns about the MedPAC proposed changes in the hospice reimbursement model which could have unintended consequences of creating incentives to shorten hospice lengths-of-stay, a devastating consequence to patients and families. Current 'bad actors' would simply change their business model to maximize profits under the new rules.

"Hospice of Michigan fully supports MedPAC'S goal of assuring that our communities receive high quality, cost-effective hospice care. We believe that adding quality, evidenced-based outcomes, and case-mix adjusters (an increased reimbursement adjustment for complex hospice cases) to the reimbursement model would be a better way to weed out 'bad actors' in the hospice sector.

"To that end, Hospice of Michigan and other non-profit hospices are working collaboratively with MedPAC and have recently submitted additional information to MedPAC. Our goal is to assist MedPAC in any way that would be helpful as MedPAC develops their next round of recommendations to Congress on how to refine the hospice reimbursement system and provide necessary corrections without creating unintended consequences.

"It is in the interest of patients, families and the delivery of quality care that the hospice benefit be modernized. As a non-profit that relies on charitable donations to cover the cost of providing care, we have a significant investment in the image of the hospice industry and are eager for those abusing the Medicare hospice benefit to be weeded out. It is essential that all hospice providers be accountable to the public and Medicare for their business practices, and to use their resources wisely. We are pleased to be participating in the reform process."