Situation Report | October 5, 2020
The Medicare Payment Advisory Commission (MedPAC) met last week on hospice payment policy, noting concerns about aggregate hospice payments exceeding costs, the continuing misalignment of per-diem payments with hospice costs, long lengths of stay, high live-discharge rates, and national margin data.
During the meeting, MedPAC focused on data indicating that the largest portion of hospice spending (60 percent or $11 billion) is attributable to long-stay patients (those on service for more than 180 days, which make up 14 percent of patients) and aggregate margins that increase with length of stay. Officials said more work was needed to change hospice payment incentives, even after a recent federal recalibration of payments from routine home care (RHC) toward higher levels of care and MedPAC recommendations earlier this year to wage-adjust and reduce the aggregate cap by 20 percent (changes that have not been approved by Congress).
MedPAC suggested that future research could explore “site neutral” payment adjustments for long stays (using home health as a benchmark with additional payment to support the cost of durable medical equipment and hospice-covered drugs) as well as development of compliance thresholds to address providers with outlier utilization patterns (length of stay, live discharge rates).
A few MedPAC commissioners also expressed interest in ways that alternative payment models and Medicare Advantage might impact hospice practices.
MedPAC is expected to continue its work in this area for future discussions. HCA will update our hospice members if additional information becomes available.