The National Association for Home Care and Hospice puts out a very good magazine called Caring. As far as I can tell, it is not available on-line which is too bad, because the November edition had a great article titled “The Future of Hospice”. The article was written by Tom Hoyer who worked for Medicare for thirty years and was “assigned to work on implementing the Medicare hospice benefit and was responsible for producing the regulations that have governed the benefit.” He also “continued to maintain responsibility for hospice benefit policy…until his retirement.” I guess that makes him very qualified to discuss the future of the Medicare hospice benefit from the Medicare prospective, which is what he does in the article. I really wish the full text was available online.
This is the first post in a series where I look at the many points made in the article. Much of what is written are topics I have written about in the past, but, for obvious reasons, seem much more real when Mr. Hoyer writes about them. The article is broken into two sections. The first discusses improvements that can be made to the Medicare hospice benefit. The second discusses changes in the “product” or changes in the core definition of hospice. This post deals with a portion of the section on improvements that can be made to the Medicare hospice benefit.
This subject is one that I have discussed many times in many different ways. I believe that there is going to be a major change in how hospices get paid. I also believe that these changes are probably necessary. Mr. Hoyer seems to agree, but has some insight and details on how and when these changes will appear that I have not heard anyone say out loud before.
First, Mr. Hoyer points out that MedPAC and the GAO have been looking at this subject and have both concluded that, while the government is probably spending enough money on hospice, they are probably not spending it well. As he says, “They [MedPAC and GAO] believe the rates need to be reexamined with a view towards updating the components to reflect current medical practice, and to do a better job of matching individual payments to individual patients (case-mixed payment).” This means creating a system where a hospice is paid more for high need patients and less for low need patients. I have discussed here many times that there is a difference in the amount of care provided to home patients (higher need) as apposed to nursing home patients (lower need). There is also a difference in the amount of care (or cost of care) a dementia patient requires (low need) as opposed to an HIV/AIDS patient (high need). This new system would take those factors (and probably more) into account when determining how much a hospice is paid for each patient.
Mr. Hoyer’s proof that this change is coming is the fact that the MedPAC and GAO reports called for data gathering to determine how to set up this new system. That data will start being gathered on January 1st from hospices who have voluntarily implemented the new billing system that becomes mandatory for all hospices later in 2008. Once enough data has been gathered, Medicare can start using the data to create a new payment system. The question is, why would they gather the data unless they planned to do something with it? The answer, they wouldn’t. The good news for those, like me, who have been living in a bit of fear that the sky could fall on us at any moment, is that Mr. Hoyer says that this process is going to take some time. On that he says, “it is a safe assumption that payment reform would not likely occur until at least 2010, unless the Congress or the Administration make it a very high priority.”
With this in mind, Mr. Hoyer’s advice is for hospices to spend the next couple of years making sure that their operations will be financially sound in a case-mixed system. His hope is that the case-mixed system will stop the “gaming” being done by hospices that focus on recruiting low intensity patients to make profits.
“Gaming” becomes a big subject in the rest of section one. I’ll talk about that more in the next post.