Healthcare Business News

Audit eyes Medicare payments for hospice care

By Joe Carlson
Posted: May 29, 2013 - 12:01 am ET

With Medicare spending on hospice skyrocketing in recent years, the program's watchdog office says tying hospital payment more closely to the timing of patient transfers from the hospital to the hospice could have cut federal spending by as much as $600 million over two years.

But those savings would come out of hospitals' pockets. That's prompting CMS officials to wonder whether making that payment change would drive hospitals to needlessly prolong acute care in order to guarantee full payments, an audit report published today says (PDF).

Advertisement | View Media Kit


Hospice is intended to comfort dying patients, not cure underlying diseases; demographic trends have fueled a spike in the service. Between 2007 and 2010, Medicare spending on hospice increased 80%, to $2.7 billion in 2010, according to the study by HHS' inspector general's office.

With that kind of money at stake, the inspector general's office is recommending that Medicare start paying hospitals less for inpatients who are discharged into hospice care early, since hospitals get paid flat rates based on diagnoses that assume a certain number of days of inpatient care.

The auditors examined 100 cases in which patients left an acute-care hospital and went into hospice from 2009 and 2010. They found that about 30% of the time, patients were discharged into hospice sooner than would have been expected based on their diagnosis.

The OIG study estimated that by discounting hospital care for these early hospice discharges, the CMS could have saved $602.5 million between 2009 and 2010. A similar payment-reduction methodology already applies in cases where hospitals transfer patients early to other hospitals or to long-term acute care centers.

CMS Administrator Marilyn Tavenner wrote in response to the audit report that the agency would like to study the proposal further, because at least some of the savings could be wiped out if hospitals decided to hold onto hospice patients long enough to justify their full payments.

Tavenner also said it's not clear whether the CMS has authority under the law to enact such a change.

The OIG recently has targeted other areas of Medicare hospice spending for scrutiny.

Earlier this month, that office released a report questioning why treatments for some hospice patients tended to be more expensive depending on the types of services the hospice offered rather than on the patients' health. In many cases, hospices that owned or leased their own inpatient units tended to refer patients to that care at almost triple the rate of companies that did not have an financial interest in those inpatient services, the study found.

Follow Joe Carlson on Twitter: @MHJCarlson

What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.