Hospice Advocacy Groups Ask Congress for Action on Proposed 2023 Medicare Rates

More than a dozen hospice advocacy groups have called on congressional leadership to intervene in a proposed 2.7% bump in Medicare payments, which they say is insufficient in light of COVID-19 and staffing headwinds.

The organizations signed a letter to party leaders in both chambers of Congress. Signatories included the National Hospice & Palliative Care Organization (NHPCO), the National Association for Home Care & Hospice (NAHC), the National Partnership for Hospice Innovation (NPHI), and the Hospice Action Network, among others.

“This proposal ultimately jeopardizes the ability of hospices to continue providing access to appropriate, high-quality care to all Americans who need it,” the letter indicated. “Congress should urge [the U.S. Centers for Medicare & Medicaid Services (CMS)] to reconsider their proposed rate increase and provide adequate payment to hospice providers, otherwise hospices around the country may be forced to close and Americans will lose access to necessary care at the end of life”.

CMS in April released the 2023 proposed payment rule for hospice providers, including the 2.7% per diem rate increase. Typically, the agency finalizes these rules each October, following a period for public comment.

The 2023 proposal also contains a model for phasing in changes to the way CMS will use the wage index to inform payment rates in future years.

A range of providers and other stakeholders have expressed dismay at the size of the increase. Hospices’ financial resources continue to be strained by expenses associated with the COVID-19 pandemic, plus price and wage inflation. Operators are also contending with labor pressures and lower patient lengths of stay.

“This proposal fails to thoughtfully consider the burdens and heightened costs providers are facing in order to continue doing business and provide high-quality hospice care to their patients,” the groups stated in the letter. “When all of the aforementioned factors are taken into consideration, hospice providers are effectively facing a significant rate cut.”

A key point of contention is that CMS used 2019 data to calculate the 2023 rate, including wages and cost reports. These time lags are typical for the agency’s reimbursement decisions, but the conditions that hospices have endured since early 2020 have been anything but normal.

Compensation costs for the health care and social assistance industry rose nearly 4.4% in 2021, according to the Bureau of Labor Statistics (BLS). Hospice providers nationwide have reported similar increases in their labor expenditures.

Hospices are also taking a hit from rampant inflation, which as of March hit 8.5% with no sign of slowing down. This rate is the highest in 40 years.

“The reality is: This doesn’t cover the cost of living, not even close. In comparison to that, you see hospitals and other settings getting the bump to account for all those things that have happened,” NHPCO’s President and CEO Edo Banach, said at the Hospice News Palliative Care Conference in Chicago. “The reality is we can’t provide the care that you’re expecting us to provide, nor can we pay for the employees who are leaving to go work for those hospitals. If you’re trying to send us a message, government, that you value institutional medical care over interdisciplinary care in the community, you’re doing that. But if you want to send a different message, you need to show that.”