Medicare hospice care to face increased scrutiny

The inspector general plans to review marketing practices and the relationship between hospice providers and nursing homes.

By Charles Fiegl — Posted July 28, 2011

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

Government auditors recommended increased federal oversight of hospices after an analysis found that palliative care for nursing home patients has jumped by nearly 70% since 2005.

A July report by the Dept. of Health and Human Services Office of Inspector General suggests that some hospices might be seeking out patients in nursing homes who meet certain characteristics and have a greater chance of living longer. The report called on the Centers for Medicare & Medicaid Services to reform the program's payment system to lessen the incentive for this strategy.

"As the growth in Medicare spending on hospice care for nursing facility residents continues, special attention should be paid to hospices that depend heavily on nursing facility residents," the OIG report said. "OIG plans to look at the marketing practices of these hospices and their relationships with nursing facilities."

The trend also is concerning because previous OIG work had found many hospice claims for nursing facility patients to be improper, the inspector general said. In 2006, 82% of claims reviewed by the OIG did not meet the requirements for Medicare coverage.

The findings by the OIG were based on a small sample of hospice providers, said J. Donald Schumacher, PsyD, president and CEO of the National Hospice and Palliative Care Organization in Alexandria, Va. But Schumacher agreed that more oversight of the hospice industry is necessary. Hospice licenses require a survey by the Medicare program every 11 years. He suggested that only two to three years should elapse between surveys.

The OIG recommended that CMS closely examine whether hospices meet program requirements. CMS could conduct medical record reviews on patients who spend extended periods in hospice care, auditors said.

Hospice care is intended to assist terminally ill patients who are expected to live only six months or less if a disease runs its normal course, according to CMS officials. The patient receives palliative care for pain and symptom management, and the hospice is paid a per-diem rate.

The OIG analysis reviewed all 3,385 Medicare-certified hospices in 2009. Auditors found that spending for palliative care by nursing homes had increased 69%, from $2.5 billion in 2005 to $4.3 billion, but the number of hospice patients increased by only 40%. The total number of hospice patients, regardless of setting, rose by just 25% during the four-year period.

The Medicare program paid for-profit hospices more for patients than it paid nonprofit and government-owned hospices. For-profit hospices received about $12,600 per patient, while nonprofit and government entities received between $8,200 and $9,800 per beneficiary.

The OIG found 263 "high-percentage hospices," meaning they had at least two-thirds of their Medicare patients living in nursing homes. These hospices were mostly for-profit operations and were more likely to serve patients who spent more than six months in hospice care. The analysis showed high-percentage hospices more likely to care for patients with ill-defined medical conditions, such as mental disorders and Alzheimer's disease, and less likely to serve patients with terminal diagnoses of cancer compared with other hospices.

The OIG also recommended that CMS modify its hospice payment system after suggesting that the current system creates incentives for hospice providers to seek nursing home patients. Medicare pays the same rates for hospice care provided in nursing home and private home settings. However, the health system reform law states that payment reforms for hospices cannot occur earlier than Oct. 1, 2013.

In a memo to the inspector general, CMS Administrator Donald M. Berwick, MD, concurred with the report's recommendations.

"The OIG's analysis is helpful and reinforces some concerns we have regarding payment vulnerabilities associated with hospice patients in nursing facilities," he said. "We plan to further investigate these concerns as part of our hospice payment reform efforts."

Back to top



Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story

Read story


American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story

Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story

Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story

Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story

Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story

Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story

Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn