my hospice cap conclusion

Tuesday, April 22, 2008

My Hospice Cap Conclusion

I have been accused of many things in the comments section of my prior posts that mention the Medicare Hospice Cap issue. Most seem to be from people who are effected by the cap problem and think that I just can’t understand the issue since I am not. Many were nice, many were not. To be honest, I have had trouble from day one knowing exactly what I think and feel about this issue. I’ll try to sort that out for both you and I in this post.

I base my judgment on the following facts.

  • My hospice does not have a cap problem.
  • My hospice does not come anywhere close to having a cap problem.
  • I have trouble picturing a way that my hospice would have a serious cap problem.
  • I do understand how a hospice could have minor cap problems.
    • (Let me explain. The biggest thing that keeps my hospice from having cap problems is that we care for quite a few cancer patients who, on average, are not on hospice very long. This allows our dementia patients who, on average, live longer to have “room under the cap”. If we stopped getting cancer patients, my hospice would probably be much closer to cap problems than we are now. Thus, I understand how, if your referral sources are exclusively working with the types of hospice patients that tend to live longer, you could find yourself in cap problems.
  • I know there are hospices out there who have earned their cap problem, and I do not feel sorry for them in the least. Those hospices who admit people who have no business being on hospice, keep them on service for an extended period of time, and then whine about their cap problems get no sympathy from me. The thought of them going out of business makes me somewhat happy.
  • I know there are hospices out there who have stumbled into cap problems, and I do feel sorry for them.
    • There is someone in my state that I look to as an example of what a hospice director should be. I believe this person to be honest with pure intentions, but this person’s hospice has cap issues. Processing that is hard for me, and has helped me understand that good hospices can be caught up in the cap.
  • There is no way to know for sure what percentage of the hospices with cap issues are problem hospices and what percentage are hospices with a problem.
  • Most importantly, no matter what the people pushing for a fix to the cap seem to believe, there is no way to separate the cap issue from the other issues within the hospice industry.

With those things in mind, here are the conclusion I have come to. Am I right? I’m not sure. Will some think I’m wrong? No doubt. Will some think I am the devil himself? Probably. This is an emotionally charged issue to say the least.

My Conclusion:

I do not want congress to focus on changing the hospice cap. Instead, I want Medicare to focus more on enforcement of the cap.

My reasoning:

The government, especially Medicare, is well aware that there is abuse and corruption in the hospice industry, and they will be forced to address it at some point. As best I can tell, they have three opportunities on the horizon to address these problems.

  1. The hospice reimbursement issues that are currently before congress. An across the board cut of hospice reimbursement has the ability to reduce the services hospice patients receive. Yes, if you cut the rates deeply, those companies that are only in hospice for the money will leave, but it will also force those who stay in the industry to reduce services to match the income. Even with that, the corruption will not be stopped. Any company that wants to bend the rules to increase profits would still be able to do so.
  2. Later this year, Medicare will begin gathering information on exactly what hospices are doing for their patients. As much as they claim that they will not use this information for payment reasons, nobody believes them. I have said many times on this blog, the current Medicare Hospice reimbursement system does not work. It is crazy that we get paid the exact same amount for every patient no matter where they live, how sick they are, or what care we provide. I believe Medicare will change that in the next few years. I pray they will not use that fix as their way to try to fix every industry problem. We all know what happened to home health a few years ago. I think Medicare will change our payment system, but I hope the corruption within the industry will be under control so that Medicare doesn’t have to “drop the hammer” like they did on home health. A lot of home health agencies went out of business when they changed the payment system and many of them were good agencies that got caught in the crossfire. It is in the best interest of hospices and their patients that the reimbursement system be set up to encourage and reward best practices instead of being set up to punish bad practices.
  3. The Hospice Cap. Given the facts above, I believe that corrupt agencies are probably the ones who will be hit hardest by the cap. I also believe that is what the cap was created to do. There are going to be honest hospices who have cap issues, but I have trouble understanding how an honest hospice has a serious cap problem. Yes, they will have to pay back money. Yes, they are going to have to try to make sure they don’t cross the cap line in the future, but, in the end, they will endure the pain and come out the other side alive and well. I believe that the hospices that owe amounts so large that they can’t ever pay it all back are generally the ones that earned their problems. Some may have done this with good intentions of helping people (which is what they all claim), but the fact is that they admitted a lot of people who lived significantly longer than six months on hospice. They crossed the cap line at a dead sprint and kept going. The cap is a regulation put in place to keep hospice admissions reigned in around the six months to live mark, and it is doing its job. Enforcement of the cap will mean that patients are not admitted as early in their disease process as they have been in recent years, but it will not reduce the services they receive once they are admitted to hospice.

With those options in mind, I believe the best thing that could happen for the hospice industry as a whole is for the Medicare Hospice Cap to be enforced more not less. The best hope for those who will need hospice in the future is that the cap will be enforced and the bad actors will be put out of business. That will allow Medicare to focus on coming up with an appropriate payment system instead of a payment system intended to be punitive. Yes, this will cause some real issues for some hospices, but it will cause minimal issues for hospice patients. There is going to be pain in the hospice industry. I believe there should be some pain within the hospice industry, because there is, no doubt, corruption within the industry. Out of the three options listed above, enforcing the Cap is the best way to focus the pain towards corruption and away from patient care. Yes, some hospices will be injured in the crossfire, but I think the majority of those who should be allowed to survive will.


Christian Sinclair, MD

Excellent post HG! You covered the issues well, and showed that you have thought deeply about the issues. This is a tough thing our industry has to face, and I agree that the cap has a reason to be there.

It is hard to reconcile that all hospice providers want to be able to provide services earlier but then our field casts a suspicious eye at hospice agencies who have longer LOS. There is a bell curve and regional variation but when you begin to have 300% differences in LOS, you are going to raise the attention of CMS

Does anyone know of a CAP calculator so you could post a couple of example patient distributions so people could actually see the differences and not just understand this in the abstract?

That is too bad about such negative comments. We need more dialogue, and I think your posting on this issues gives a wider forum for our field as a whole.


Great post hospice_guy, not too much to disagree with that I can see. 🙂