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Hospices should be scrutinized, says OIG

As Medicare spending on hospice care for nursing facility residents continues to grow, the Centers for Medicare & Medicaid Services should more closely scrutinize hospices, concludes a report from the Department of Health and Human Services' Office of Inspector General.

More scrutiny is acceptable as long as access to care is not blocked, said Judi Lund Person, vice president, compliance and regulatory leadership, National Hospice and Palliative Care Organization (NHPCO), a nonprofit member group.

"We're looking at a time when hospice is under a lot more scrutiny," she said. "We support the scrutiny. We also want to make sure that people are not denied access to care because of a regulatory barrier that might be put up in their way."

In its first of a series of reports on hospice, OIG looked at the growth of hospice in nursing facilities from 2005 to 2009 and examined the issue of hospices with a high percentage of Medicare beneficiaries living in nursing facilities in 2009.

The report, released earlier this month, found that Medicare spending for hospice care for nursing facility residents increased from $2.55 billion in 2005 to $4.31 billion in 2009 while at the same time the number of hospice beneficiaries in nursing facilities grew by 40 percent. The number of hospices also grew, especially in the for-profit market.

The increase in Medicare hospice spending is "an attention getter" said Lund Person, but, not all bad news. "What we would say is that also means that more people are getting hospice care. We don't think that's a bad thing," she said. "We think that more people getting hospice when they need it is exactly what the Medicare hospice benefit was intended to do."

The OIG report took a hard look at hospices it deemed "high percentage," meaning the facilities had two-thirds of its patients who were residents of nursing facilities. OIG found that such facilities were more likely to be for-profit than non-profit. Of the 3,385 hospices that serve Medicare beneficiaries in 2009, only 263 met the two-thirds criteria, which pointed out Lund Person, isn't really a lot.

At these high-percentage hospices, OIG found that Medicare paid an average of $3,182 more per beneficiary than was paid per beneficiary by hospices overall and that beneficiaries at high-percentage hospices spent more days in hospice care than the median number of days of a typical hospice beneficiary (52 days rather than 31). The longer stay contributed to the higher payments. The report also found that a greater percentage of beneficiaries in high-percentage hospices were more likely to have conditions such as Alzheimer's disease, which required less complex and costly care, than beneficiaries at all hospices overall.

Hospices traditionally cared for terminal cancer patients, said Lund Person, but today, fewer than 50 percent of patients at hospices of all stripes have cancer. Today's patients are often older than 85 and they have multiple comorbidities, she said – the sort of diseases that cause people to move into nursing facilities.

Still, the prevalence of for-profit hospices getting patients from nursing facilities in greater numbers than non-profits has raised concerns, as a number of studies attest to. OIG's report seemed to support those concerns.

[See also: Concerns raised about increase in for-profit hospice care.]

"Some hospices may be seeking out beneficiaries with particular characteristics, including those with conditions associated with longer but less complex care," said the report. "Such beneficiaries are often found in nursing facilities. By serving these beneficiaries for longer periods, the hospices receive more Medicare payments per beneficiary, which can contribute to higher profits."

"We want to make sure that hospices are doing the right thing," said Lund Person. "That they are compliant with laws and regulations, that they're admitting eligible patients and caring for them. That would be our goal no matter where the patient is."

[See also: Hospice organization releases marketing ethics guidelines.]

OIG concluded that CMS should monitor hospices with a high-percentage of beneficiaries in nursing facilities and that the current payment structure be modified. "The current payment structure provides incentives for hospices to seek out beneficiaries in nursing facilities, who often receive longer but less complex care," OIG said in its report. "To lessen this incentive, CMS should reduce Medicare payments for hospice care provided in nursing facilities, seeking statutory authority, if necessary."

"(There are) a lot of things that we could argue over when we really start to talk about dropping the rates for hospice care in the nursing facility," said Lund Person, who sits on the technical advisory panel for CMS on hospice payment reform. "We've chosen to say, 'Let's focus on making sure that hospice patients who get services in the nursing home are eligible and get the kind of care that they need.'"

CMS agreed with OIG's recommendations and said that it will share information with Recovery Audit Contractors (RAC) and Medicare Administrative Contractors (MAC) and is in the process of examining payment reforms.

OIG will continue to look at hospice with upcoming reports on hospice marketing practices and business relationships with nursing facilities.

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