Some Hospices Forced To Repay Medicare For Exceeding Reimbursement Limits As Patients Live Longer Than Expected

Main Category: Medicare / Medicaid / SCHIP
Article Date: 28 Nov 2007 - 7:00 PDT

email to a friend   printer friendly   opinions  

The increase in hospice patients who live longer than expected has led CMS to demand hundreds of millions of dollars in repayments from facilities that exceed Medicare reimbursement limits, the New York Times reports. The Medicare hospice program originally was designed for people with terminal illnesses who had less than six months to live, as certified by a physician. Nearly all of the patients had cancer and "tended to die relatively quickly and predictably once curative efforts were abandoned," according to the Times.

However, in the last five years, the use of hospice by patients with less predictable life expectancies, such as those with Alzheimer's disease and dementia, has "skyrocketed," the Times reports. According to the Medicare Payment Advisory Commission, the average stay for an Alzheimer's patient is 86 days, compared with 44 days for lung cancer patients.

Congress in 1998 removed limits on how long a person could receive Medicare hospice services but did not remove a cap on the aggregate amount that hospice could be reimbursed each year. A recent MedPAC analysis projected that 220 hospices, or about one in every 13 providers, received 2005 repayment demands totaling $166 million. The National Alliance for Hospice Access, which is lobbying for a three-year moratorium on repayments, says 250 hospices received 2005 repayment demands totaling $200 million.

According to the Times, "Hundreds of hospice providers across the country are facing catastrophic financial consequences" because of the repayments and could be forced to close. The Times reports that the charges are assessed retrospectively, and in many cases the funds already have been spent on salaries, medicine and supplies. Lois Armstrong, president of the hospice access alliance, said if the limits are not changed or removed, patients' access to care will decline at a time when hospice care is in high demand and saves Medicare money. According to the Times, hospice has become "one of the fastest growing components" of Medicare, with its services being used by nearly 40% of Medicare beneficiaries and spending nearly tripling from 2000 to 2005 to $8.2 billion. Medicare officials say that because less than one-tenth of all providers have faced repayment, mismanagement might be a greater issue than the reimbursement cap.

CMS deputy director Herb Kuhn said, "Well over nine out of 10 hospices seem to be managing well, including the ones in higher-wage areas, so it does raise an issue of management." Another issue that should be reviewed is whether physicians are prematurely certifying their patients as terminal, Kuhn said (Sack, New York Times, 11/27).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

• Additional
• References
• Citations