Hospice Leaders: Change Must Come to the Medicare Benefit

Calls have grown louder for an overhauled design of the Medicare Hospice Benefit, but the path towards change is riddled with contrasting views over regulation, policy and payment structures.

Hospice providers are hitting financial and regulatory walls when it comes to sufficiently covering the spectrum of services necessary to care for patients and families, according to Marian Grant, senior regulatory advisor at the Coalition to Transform Advanced Care (C-TAC).

One part of the issue is that hospice reimbursement has not kept pace with evolving patient needs, Grant said. Providers are also already trying to absorb a number of changes in the regulatory space, she added.

“Part of the problem is that the [Medicare] Hospice Benefit is 40 plus years old. It needs to be modernized,” Grant told Hospice News at the ELEVATE conference in Chicago. “Some of the issues are because the patients are different, medicine is different … and the benefit doesn’t reflect that. I think we’re all trying to figure out how we will fix the battleship at a time of great scrutiny?”

The length-of-stay conundrum

The hospice benefit was established as a demonstration project in 1970 and became a formal part of Medicare in 1983.

Nearly all who enrolled in hospice at that time were cancer patients. The U.S. Centers for Medicare & Medicare Services (CMS) and its collaborators designed the benefit around the needs and illness trajectory of these patients.

Cancer remains a common diagnosis among hospice patients, but the proportion of these individuals has fallen over the years.

More than 20% of hospice decedents in 2020 suffered from dementia, up from 18.5% in 2019, the National Hospice and Palliative Care Organization (NHPCO) reported. Comparatively, circulatory and heart diseases, the next highest, represented 10.2% of terminal diagnoses in 2020, while cancer accounted for 7.2%.

Dementia patients also tend to have the longest average lengths of stay in hospice — 181 days in 2020, compared to an average 97 days among all patients.

This is one area in which patients’ changing needs bump up against regulatory oversight. Longer lengths of stay can draw scrutiny from CMS, Medicare Administrative Contractors (MACs) or the U.S. Department of Health & Human Services Office of the Inspector General (OIG).

Considerations like these warrant some discussion when it comes to the future of the Medicare Hospice Benefit, according to Mollie Gurian, vice president of home-based and HCBS policy at LeadingAge, a senior advocacy group.

“We’re just not in a state where we’ve updated all the pieces that need to be to try to even layer on with reforms needed,” Gurian said at Elevate. “It’s [having] a holistic conversation about how you update existing regulations so that hospice can be better carried out and that people can expect a consistent level of quality care. It’s our job to continue to push policymakers to have those conversations. It’s an uphill battle.”

Some stakeholders have contended that CMS should reconsider the six-month terminal prognosis requirement, in part due to the influx of patients who have less predictable conditions like dementia.

Changing or eliminating that requirement would allow more patients to benefit from the various types of services that hospices can provide across the care continuum, not just at the end of life, according to Blue Ridge Hospice CEO Cheryl Hamilton Fried.

Taking hospice out of its current silo could be a path towards improved quality outcomes, as well as more sustainable payment avenues for providers, she said.

“It’s not enough that we’re trying to educate about hospice care and about the value in need of that,” Hamilton Fried said. “I truly wish the segment would be removed and that the whole larger hospice would be the solution. The solution really is to redefine it. I really believe that if you don’t own the continuum of that serious and frail population, we will never be able to provide them with a hospice experience. It’s not about products. It’s about the survival of being able to provide the right care at the end of life.”

I truly wish the segment would be removed and that the whole larger hospice would be the solution. The solution really is to redefine it.

— Cheryl Hamilton Fried, CEO, Blue Ridge Hospice

Untangling GIP policies

The appropriate use of General Inpatient Care (GIP) is another area in which some providers feel they are getting mixed messages from regulators.

CMS in its proposed 2024 hospice rule included a request for information on the GIP, continuous home care and respite levels of care and why they may be underutilized.

However, one of the likely reasons is that GIP stays of five days or longer frequently attract MAC audits. OIG is also conducting a national audit of hospice billing for GIP.

Factors like these muddy the waters when it comes to how and when GIP services should be used, according to Gurian.

“A lot of the pieces of the hospice benefit actually can work well now, but the internal regulations haven’t been updated,” Gurian told Hospice News during ELEVATE. “There’s no uniform interpretation around what GIP is supposed to be. [Providers] are not working off a consistent playbook with auditors. Part of it is getting through to CMS that they and their contractors are not enforcing a standard that businesses can actually follow. Therefore, beneficiaries suffer, because they are not getting access to the care because it’s becoming untenable to offer a GIP of care.”

Payers are speaking up

Payers are increasingly stepping into the conversation around a potential restructuring of the hospice benefit.

The ability to provide sufficient reimbursement is being challenged by a need to modify how payment structures are designed, according to Dr. Payam Parvinchiha, corporate vice president of network quality and innovation at SCAN Health Plan.

“In hospice, the reality is just extremely frustrating as far as financial capacities for providers and for payers. There has to be a major evolution in order to get to a place that delivers more value,” Parvinchiha told Hospice News.

In hospice, the reality is just extremely frustrating as far as financial capacities for providers and for payers. There has to be a major evolution in order to get to a place that delivers more value.

— Dr. Payam Parvinchiha, corporate vice president of network quality and innovation, SCAN Health Plan

Roughly 1.7 million Medicare beneficiaries receive hospice care each year, with Medicare paying about $23 billion annually for this care, according to an OIG report.

Inappropriate billing practices and a payment system that “creates incentives to minimize services” are among the most concerning issues in the hospice space, with regulatory changes needed to improve the current financial state in the industry, the OIG indicated in the report.

The “evolution” of hospice payment has begun to branch out of the traditional fee-for-service world to include more value-based care avenues, according to Burke Wise, cofounder of the managed services organization Empassion Health.

The molding of these two payment landscapes may collide in hospice to form a new realm of reimbursement that may better support the various needs involved in end-of-life care delivery, he stated.

“Hospice can be a sustainable business, but it’s changing,” Wise told Hospice News at ELEVATE. “There’s a lot of change on the horizon, both in fee-for-service and on the Medicare Advantage side. That change has been continually happening very slowly over a long time. When things start to shift, they may not happen all at once.”