(update: The link to the nhpco press release has been fixed. Sorry.)
I have focused quite a bit in the past on the proposed hospice rate cuts, and have probably done a poor job of explaining the different fronts on which this battle is taking place. One of those fronts has heated up quite a bit.
The Centers for Medicare and Medicaid Services has now officially proposed a rule change that will change the wage index that is used to figure hospice payment rates. This change, if it takes effect, will be phased in over a three year period and will reduce the daily rate that hospice can bill Medicare. The wage index is different for different portions of the country, so the exact effect for each hospice will vary. For my hospice, our rates will be reduced by exactly 5%. The fun part about this is that CMS can make the rule change without going to congress for approval. Thus, the fact that they have proposed the rule change is a big deal. I have no idea how many hoops the rule change has to go through before it takes effect, but, as far as I understand, none of those hoops will involve anyone outside of CMS in the decision.
NHPCO has written a very good press release about this, and has also been working to get congress to inform Secretary Leavitt that they oppose this rule change. You should read the press release. It does a good job of covering the reasons why this proposed rule change isn’t a good idea.
The most important fact is that the rule change will reduce payment rates by 5% while a study done by MedPAC states that hospice profit margins average less than 3.5%. It would seem that the average elementary school child could understand that this math doesn’t end up positive. Does Secretary Leavitt want hospices to reduce the type or amount of care they are providing to dying people? Do the math and draw your own conclusion.