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Some Hospices Forced To Repay Medicare For Exceeding Reimbursement Limits

Armen Hareyan's picture

Medicare Reimbursement Limits

The increase in hospice patients who live longer than expected has led CMS to demand hundreds of millions of dollars in repayments from facilities that exceed Medicare reimbursement limits, the New York Timesreports. The Medicare hospice program originally was designed forpeople with terminal illnesses who had less than six months to live, ascertified by a physician. Nearly all of the patients had cancer and"tended to die relatively quickly and predictably once curative effortswere abandoned," according to the Times.

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However,in the last five years, the use of hospice by patients with lesspredictable life expectancies, such as those with Alzheimer's diseaseand dementia, has "skyrocketed," the Times reports. According to the Medicare Payment Advisory Commission, the average stay for an Alzheimer's patient is 86 days, compared with 44 days for lung cancer patients.

Congressin 1998 removed limits on how long a person could receive Medicarehospice services but did not remove a cap on the aggregate amount thathospice could be reimbursed each year. A recent MedPAC analysisprojected that 220 hospices, or about one in every 13 providers,received 2005 repayment demands totaling $166 million. The National Alliance for Hospice Access,which is lobbying for a three-year moratorium on repayments, says 250hospices received 2005 repayment demands totaling $200 million.

According to the Times,"Hundreds of hospice providers across the country are facingcatastrophic financial consequences" because of the repayments andcould be forced to close. The Times reports that thecharges are assessed retrospectively, and in many cases the fundsalready have been spent on salaries, medicine and supplies. LoisArmstrong, president of the hospice access alliance, said if the limitsare not changed or removed, patients' access to care will decline at atime when hospice care is in high demand and saves Medicare money.According to the Times, hospice has become "one of thefastest growing components" of Medicare, with its services being usedby nearly 40% of Medicare beneficiaries and spending nearly triplingfrom 2000 to 2005 to $8.2 billion. Medicare officials say that becauseless than one-tenth of all providers have faced repayment,mismanagement might be a greater issue than the reimbursement cap.

CMSdeputy director Herb Kuhn said, "Well over nine out of 10 hospices seemto be managing well, including the ones in higher-wage areas, so itdoes raise an issue of management." Another issue that should bereviewed is whether physicians are prematurely certifying theirpatients as terminal, Kuhn said (Sack, New York Times, 11/27).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily HealthPolicy Report is published for kaisernetwork.org, a free service of The HenryJ. Kaiser Family Foundation.