NHPCO voices concern for flawed Medicare recommendation

Categories: Policy.

In its March 2014 report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended that Medicare Advantage plans assume both the clinical management and financial responsibility of the hospice benefit (hospice would be ‘carved-in’ to Medicare Advantage plans).

“Should the MHB be changed to a ‘carved-in’ benefit, patients, families caregivers, the hospice community and Medicare will be significantly and negatively impacted,” said J. Donald Schumacher, NHPCO president and CEO.

Choice would be limited

Currently, a MA patient is free to enroll in any Medicare certified hospice program. Under the ‘carve-in’, the patient would be directed to a MA contracted hospice giving the patient and family less choice.

“End of life care is a deeply personal experience. It is both unreasonable and insensitive to require families to conform their needs and preferences to those of a MA plan,” noted Schumacher.

Potential financial burden to patients

The MedPAC recommendation opens the possibility for MA plans to require additional co-payments or other cost-sharing for hospice. Such financial burdens are minimal under the current system. 

“By their very design MA plans are concerned about risks and the bottom line. By advancing this recommendation, MedPAC seems to find it an acceptable risk for financial incentives to shape or even limit hospice choice and quality,” said Schumacher.

Hospice ‘carve in’ would cost Medicare $1.3 billion

Under the current system, hospice saves Medicare an average of $2,309 per beneficiary enrolled (Duke, 2007). The ‘carve-in’ would create additional costs for Medicare. 

According to a new study by Avalere Health (PDF), commissioned by NHPCO, the MedPAC proposed ‘carve-in’ of hospice would cost Medicare an alarming $1.3 billion over a ten-year budget window.

Negative impacts on hospices

Hospices contracting with MA plans would not be assured of the baseline reimbursement rates established under Medicare. At a time when MA plans are under immense financial pressure, the carve-in would surely leave hospices vulnerable to further reimbursement cuts.

Reduction in reimbursement would force hospices to re-evaluate staffing and devote valuable resources to maintaining the administrative infrastructure required to support ongoing communication, billing and data reporting with the MA plan. 

These additional burdens would put many hospices, especially smaller and rural programs, at a competitive disadvantage, and could further limit access to compassionate end of life care in underserved communities.