hospice reduction in bush budget

Wednesday, February 07, 2007

Hospice Reduction in the Bush Budget

Received an alert from NHPCO today indicating that part of President Bush’s proposed budget is a 0.65% cut in the Medicare Hospice reimbursement rate starting next year and continuing every year thereafter. Let me be clear on what this means. If this passes, next year when it is time for Medicare to figure out how much of a raise I should get (usually it is around 3%), they will subtract 0.65 from whatever number they decide upon. Thus, I will get a 2.35% raise next year instead of 3%. Don’t buy into the hype that we are getting our payment rates cut. We are not getting as big of a raise as we expected. That is never good news, but it is far from them actually cutting payment rates. This is an effort to slow the growth of Medicare.

I have posted my thoughts on rate cuts before (here also). I’ll cut and paste one of my favorites here (I was in quite a mood the day I wrote this):

I’ve posted a few times that I know that Medicare cuts or changes are coming and that I welcome them. I’m a good Republican, and spend some time behind my desk conflicted at the waste of government money. The conflict comes because some of that money ends up in my bank account. So, here we go again, time to purify my soul.

Medicare needs to cut the payment rate for hospice patients that live in nursing homes. I’m talking about significant cuts, but only for those patients that live in nursing homes. Yes, the cuts will put some hospices out of business. Yes, they will mainly be the companies whose business practices make me throw up a little in the back of my mouth. Yes, since you asked, I have spent some time practicing my evil laugh for the day when the companies who have gotten into the hospice business to take care of nursing home patients because you can make a killing on them crawl back into whatever vile soulless hole they crawled out of.

Unfortunately for me, the same companies that I hope to see ruined are the ones who have the money (money=power) to make sure that this kind of intelligent decision is not made in Washington. Instead something like freezing the Market Basket is going to happen which will allow inflation to reduce the massive profit on nursing home patients and make it even harder to break even on home patients. That decision will force people like me to focus my energy on the nursing home market in hopes of having enough big profit nursing home patients to finance my admirable but financially unsustainable home patient habit. The problem there is that most of the nursing home patients are taken by the nursing home owned hospices. Thus, people like me will go out of business and companies who don’t have to practice evil laughs because that is the way they laugh naturally will survive.

The person hurt the most? The home patient. When those of us who have no fear of daylight are gone and the nursing home owned hospices are all that are left, it will become very hard for a patient to die at home.

I was on quite a role that day and would probably say things a bit differently if I were writing that today, but the underlying thoughts are still very true. Reducing our “cost of living” pay raise each year from now until Jesus returns, will, over time, make it very financially tenuous to run a hospice that focuses on providing hospice in a person’s private residence. Those patients require more care, more equipment, and more handholding than patients in nursing homes. It remains silly to pay the same amount for nursing home and home patients. Yes, we offer the exact same services to both, but nursing home patients don’t actually take us up on the full extent of that offer. They already have many of the things hospice offers, thus the hospice doesn’t have to provide it.

Hospice remains on the hot list for a Medicare Rate cut, and I remain worried that they will not make smart cuts. When the rate cuts come, they will probably put half of the hospices in the nation out of business. Which half is left standing will determine how Americans face death for the next half century. I hope the good guys win, and you should to!


Christian Sinclair, MD

Good post. I have not read the NHPCO alert yet, but was thinking of researching this a bit in the next few days, but you covered it for us, so I linked over to your post.

Hey, I know you are anonymous and everything but are you going to be at the AAHPM? It would be great to meet you in person.


I agree with your financial assessment of the difference in cost in providing hospice in nursing homes vs hospice home pts. I am sadly learning another component of the problem. I recently relocated from an area where the vast majority of hospice patients were home patients, but we had SNF and ALF patients as well. It was emphatically made clear to staff @ my former hospice that facility patients were to be served in the same way as home patients, as the facility is, in fact, their home. My current hospice makes no attempt @ achieving this equity and views limiting nursing,CNA visits and provision of supplies and equipment to facility patients as a way to help control the bottom line. They preach patient care but utilize denial/limiting of services to enhance the agency’s bottom line. I recently became aware of a financial arrangement between the hospice and SNF that allows the hospice to make money on every patient placed on GIP level of care at the parent company’s SNFs, and the current push from management included instructions to staff to be aggressive in instituting continuous care for home patients as it is beneficial for our hospice. Too creepy for words! Obviously, I’m looking for a job with a more ethical perspective!