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Medicare hospice payment reform: not seeing eye to eye


By: Alex Smith @alexsmithMD

Eye-popping numbers from the headlines of the New York Times today - 2% of doctors bill for one quarter of all Medicare payments.  At the top of the 2% is a Florida ophthalmologist who billed Medicare for $21 million in a single year.

So what does this have to do with hospice payment reform, you ask?  Those 2% of doctors billed Medicare 14 billion dollars in 2012 for their services (note this doesn't include the cost of medications, but may include the costs of administering medications, like chemotherapy). 

In 2012, Medicare hospice payments totalled $15 billion.  That $15 billion was for ALL the services hospice provides, including medications, durable medical equipment, etc. 

Medpac, the government organization responsible for making recommendations to congress for changes to Medicare payment policy, has been recommending a number of reforms to hospice payment for years.   In the most recent two years the recommendations have been to freeze Medicare payments to hospices at their current levels.  Adjusting for inflation - this is a cut.  They also reiterate recommendations to root out fraud and abuse in hospice. 

Now certainly fraud and abuse exists in hospice.  Certainly hospice is not the ideal model for frail elderly patients.  As Joanne Lynne recently wrote, "The prognoses of people dying slowly of the degenerative conditions of old age have unpredictable timing of death, need nursing care and housing more than opioids and counseling, and generally have needs that do not match the hospice paradigm."  We can't turn a blind eye to the faults of hospice.

But if you have to root out fraud and abuse in Medicare, don't you think there is more low hanging fruit in excessive payments to very few physicians than in payments to all hospices?  Go after the 2%!!!  Going after hospice just seems...well... myopic.  Lay off already!

Random extras:
  • In the New York Times, you can search for Medicare payments to doctors in 2012 by physician's name, specialty, and city.  Fascinating!  I put in Geriatric Medicine in San Francisco.  Pretty low numbers, less than $100,000 (except for one guy - what is he doing?) Then Hospice and Palliative Care in San Francisco - just one fellow who must have been dilligent about billing in 2012.  Now put in ophthalmology or oncology.  Wow!  Some people billing $1, $2, $3+ million!  That's the 2%!!  Geriatrics and Palliative Care - WE ARE THE 98%!!!
  • The Joanne Lynn quote is a comment left on a terrific commentary by Kimberly Johnson, famous palliative care researcher from Duke.  Kim Johnson is in turn commenting on a fanstastic study by Melissa Aldridge about differences between for-profit and not-for-profit hospices, finding that for-profit hospices are more likely to provide community outreach to minority and low income communities.  Dr. Johnson argues that she doesn't care as much about the reasons they are making the outreach, as she cares about the outcome of greater enrollment of minority patients in hospice.
  • The latest MedPac recommendations are out!  Interesting wrinkle - they argue that Medicare Advantage (managed care payed for by Medicare) now include hospice.  To date, Medicare Advantage patients have disenrolled from managed care in order to receive Medicare hospice.  Some have speculated this creates a bizarre incentive for managed care plans to move high cost seriously ill patients into hospice.  Others have noted that managed care plans may do a better job of moving patients into hospice when it meets patient's goals, and doing so earlier in the course of illness.  The idea behind the reform is to allow Medicare Advantage to innovate, by paying them to include hospice serivces as part of their "package."  This may provide incentives for things like concurrant care, for example.  This one eyeballs like a good idea on first pass - anyone have objections?

Comments

Mary said…
When talking about hospice, it is important to distinguish between hospice services offered in a patient's home - the original humanitarian intent - and hospice offered to residents in a skilled nursing facility. The latter is where for-profit hospices are expanding their operations and deriving much of their revenue. Whether Medicare should continue to reimburse at the same rate in both situations may well be questioned.
Alex Smith said…
Agreed Mary! I'm not arguing that hospice payment should not be reformed. It should! Just that the focus on fraud and abuse from a few bad players should not detract from the bigger picture -> in the overwhelming majority of cases, hospice does great work.

Hospice should be reformed, including the payment structure. How that is best accomplished is still an open question, particularly when we're talking about meeting the needs of frail elders, whose needs are often distinctly different from younger patients with cancer.
Angie said…
The National Hospice and Palliative Care Organization opposes MedPAC’s recommendation to “carve-in” hospice to Medicare Advantage programs. NHPCO is currently exploring alternative ways to maximize care coordination for Medicare Advantage hospice patients without limiting their choices or increasing financial burdens.

See more information here: http://hospiceactionnetwork.org/get-informed/issues/medicare-advantage-and-hospice/

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