Saturday, March 11, 2006

Changing Hospice Reimbursement? Just exploring options.

NHPCO released a report from a MEDPAC (Medicare Payment Advisory Commission) on 3/10/06 looking at a large, for profit hospice and where the highest cost days come in.

They summarized that the first and last days of care under hospice (admission and day of death) typically use a higher level of resources, and they suggested a possible higher level of reimbursement for those days. This is an interesting proposal that would reflect better understanding of how hospices function.

FY 2006 Medicare spending on hospice is 9.8B (compared to 6.7Bin FY 2003) and with the baby boomers they are expecting an increase in hospice utilization, so this could have profound impacts for the future. (FYI total Medicare expenditures, excl admin is 325B for 2005)

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Quick follow-up comment:
One dilemma with this study and how it affects reimbursement recommendations to Medicare is that the RAND corporation only looked at a single multi-site for-profit hospice, which a couple of studies (here and here)have suggested that having a for-profit status means less skilled visits and usually higher profit margins. So what?

Well if Medicare reimbursement changes based on this info, it will likely decrease hospice per diem funding therefore crunching non-profit based hospices which typically have smaller profit margins.

Disclaimer: My employer is a non-profit hospice. And I do not believe that all for profit hospices are bad. Some of my best friends work at for profits!

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