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Reforming Hospice

MHE PublicationMHE July 2022
Volume 32
Issue 7

Some experts want to see more funding for hospice care in the home. Others say the advantages of hospice in a hospital or nursing home have been underrated.

Alexis Drutchas, M.D., does not claim to be a health insurance or Medicare payment hospice expert. Her expertise, says the palliative care physician at Massachusetts General Hospital in Boston, is caring for patients in their dwindling days of life.

“A lot of our work is talking about being present in the moment with families and sort of witnessing and hearing about their sufferings,” Drutchas says. “And that does help people to be seen and heard, even if we can’t fix the problem.”

It’s not unusual that once a week or so, a patient will confide in her that they would like to spend their remaining time at home. It’s a wish that families desperately want to fulfill. But for a variety of reasons, many can’t.

“They don’t have the family support, or they work full time and can’t be at home,” Drutchas explains. “Or they don’t have the financial means to pay for extra help, and they can’t honor that end-of-life desire of loved ones. That’s incredibly heartbreaking.”

Drutchas can only reassure families that “it’s not their fault that they can’t bring their mom home.”

Coming back home

The Tax Equity and Fiscal Responsibility Act of 1982 created the Medicare hospice benefit that entitles beneficiaries to Medicare coverage of end-of-life care. There is no debate that it was an important addition to Medicare’s coverage policies. Patients, families and medical professionals alike endorse the provision of hospice care, which can occur at home, in an assisted living facility, nursing home, hospital or stand-alone hospice facility.

Hospice does not have a reputation problem. A 2017 Kaiser Family Foundation survey found that 70% of Americans said they know at least a little about hospice. A large majority (85%) of that group had a positive opinion of hospice care and almost half (47%) said their opinion was very positive.

Dying at home was the norm before healthcare became more technology-driven in the 20th century. Now, it is more common. In a research letter published in the New England Journal of Medicine in 2019, Sarah H. Cross, M.S.W., M.P.H., of Duke University’s Sanford School of Public Policy, reported that in 2017, at-home deaths had edged out hospital deaths, 30.7% to 29.8%, for the first time since the early 20th century. But the trend comes at a time when families are scattered across the U.S., making caregiving logistically challenging.

Meanwhile, advances in medical treatments and technology are helping people with terminal and chronic illnesses to live longer. Families, say palliative care physicians and hospice advocates, need help. More specifically, they want Medicare to increase its at-home hospice payment, which is currently $203 a day, and reconsider its policy that limits hospice coverage to people with a life expectancy of less than six months. As the difference between curative and comfort care becomes more nebulous, some experts and advocates also want Medicare to reconsider the rules that require hospice patients to forgo curative treatments that may help relieve symptoms.

“What we really need is for the hospice benefit that was defined and implemented over 40 years ago to be redefined and delivered in a way that meets the needs of those who experience serious illness and end of life today,” says Ben Marcantonio, M.S., M.Ed., LMFT, chief operating officer for the National Hospice and Palliative Care Organization (NHPCO).

Medicare coverage of hospice was, by design, rather limited. Changing it now to be more responsive to 21st-century needs — especially care at home — is likely to be expensive. Lawmakers may be shocked by the price tag. But hospice advocates believe the money can be found. As a country, America spends an estimated $80,000 a year per person for medical care in the last year of life. Compare that with the current cap of $31,297.61 per year per person on Medicare hospice payments. Could some of that money be used to help families who want to bring their loved ones home to die? Drutchas thinks it could.

It is heartbreaking, she says, to see patients — with their families in agreement — who want to die at home but don’t for a number of reasons. “I don’t think it feels good to be part of a system that can’t meet patient needs,” she says.

According to the Medicare Payment Advisory Commission’s (MedPAC) 2022 Report to the Congress, the main hospice location for 47% of the Medicare beneficiaries who received hospice care in 2020 was someplace other than at home: a nursing home, assisted living facility, hospital, or hospice facility. The report also showed how the use — and cost — of hospice services have risen steadily in the last decade. Between 2010 and 2020, spending grew 5.7% annually, going from $12.9 billion to $22.4 billion. Between 2019 and 2020 alone, spending rose 7.4%, largely reflecting the number of people using hospice.

In 2020 Medicare was the largest payer of hospice services, covering 90% of all patient days for 1.7 million beneficiaries deemed terminally ill with a life expectancy of six months. That year, $500 million went to 5,058 hospice providers, a 4.5% increase in hospice providers over the previous year. The entire increase, according to CMS, came from for-profit companies rushing into the provision of hospice services. In 2020, 73% (3,680 of 5,058) of hospice providers are for-profit businesses, according to the 2022 MedPAC report.

By definition, for-profit hospice providers are moneymaking ventures with an eye to delivering a return for investors or shareholders. Medicare’s daily rate makes for tight margins. That concerns Mass General’s Drutchas. “If you are for-profit and you only get $203 a day, then what you could theoretically do is think about picking and choosing the patients with fewer physical needs so that you don’t spend your resources on them and get to keep more of that money,” she says.

NHPCO’s Marcantonio understands, saying that the influx of for-profit hospices has been a “challenge” for the healthcare field and his industry. But for-profit and quality, he says, are reenforcing, not mutually exclusive.

“As a for-profit provider, if we are not quality, we won’t be able to be successful financially or otherwise,” he says. “So, we had better be committed to quality.”

NHPCO has implemented a program focused on a commitment to quality among its members. There are also several accrediting organizations that oversee the industry, including Medicare.

The $500 million that Medicare spent on hospice care in 2020 (and the money that it spends every year) pays for physician services, nursing care, counseling and social worker services, hospice aides and homemaker services. Medicare funds also pay for care planning, drugs, medical equipment, a 24-hour call center, crisis response and transporting patients between sites for care.

The organizations and companies that provide hospice services receive daily payment from Medicare every day a patient is enrolled in a hospice program. Patients get, on average, just three to five hours of in-person care a week. But Marcantonio stresses that is an average. Visits are “determined by the needs of that patient at that given time,” he says. “When someone comes on the service, they may get 10 hours or more during the week to make sure they are set up well and that they are comfortable and have what they need. When their condition stabilizes and they reach a level of comfort, then it does go down to three to five hours a week.”

The amount of the daily payment to hospice organizations or companies depends on where they fall among Medicare’s four levels of care: routine home care, continuous home care, respite care and general inpatient care. Routine home care is reimbursed at $203 a day for 60 days and then drops to $161 daily for up to six months. Starting this year, hospice providers are eligible for additional payments for registered nurses and social worker visits during the last seven days for patients in the routine home care category. The hourly payments are for up to four hours a day of care and are on top of base payment rate. The visits must be in person.

Continuous home care is layered on top of routine home care. A hospice worker is paid $61 an hour to be on site for eight to 24 hours to provide nursing care during brief periods of crisis to, for example, manage pain or other acute symptoms. The stated purpose of continuous care is to keep the person at home.

Respite care, designed to give the patient’s primary caregiver time off, is reimbursed at $474 a day. The current Medicare payment for general inpatient care is $1,068 a day and applies to hospice care delivered in a hospital, hospice inpatient facility or nursing home.

Advantages of the hospital

Less than 2% of all hospice care is delivered in an inpatient circumstance, Melissa Wachterman, M.D., M.P.H., noted during a recent a New England Journal of Medicine podcast. A palliative care physician and an assistant professor at Brigham and Women’s Hospital in Boston, Wachterman agrees that dying at home is the best option for many patients and their families and that “a lot of good comes from hospice.” But she is concerned that the decision to send someone home to die isn’t always best for the patient, despite the strong, overall preference.

“Hospitals get paid based on the diagnostic risk group, where they get a lump sum of money for a patient regardless of how long they stay in the hospital,” Wachterman said during the podcast. “So, if stays are shorter, they can save money, and oftentimes home is one of the easiest discharge destinations for a patient. Sending a patient home can save hospitals and Medicare money because it shifts the burden of around-the-clock care and out-of-pocket expenses to families and is paid out at the much lower routine home care rate.”

Dying in a hospital or at an inpatient hospice facility, she added, may be the better choice for families. Both offer support from nurses and aides who can respond quickly to issues like pain, incontinence or delirium, all common as death nears. The stereotype of someone dying in a hospital, hooked up to machines with monitors continually beeping, isn’t accurate, as a hospital death can be very peaceful, Wachterman said. “In these settings, patient families can focus on quality time together, which becomes more important where there isn’t a lot of time.”

Wachterman would like to see Medicare increase financial support for families. She said the Department of Veteran Affairs and some state Medicaid programs that pay for family caregiving are setting a good example. She also wants to see easier access for inpatient hospice because, she believes, it is the best option for some families. In Wachterman’s view, people who have severe symptoms and need great deal of care are strong candidates for inpatient care.

Drutchas agrees that everyone should have an option about where they want to die, including those who want to spend their final days at home but don’t have the necessary support network.

“It should be an option for everyone, not just those who have the money to pay for private care or those who are blessed to have multiple family members and friends in the exact geographic location who can help with that 24-hour care,” she says.

The main issue Marcantonio would like to see addressed is Medicare’s requirement that a patient have a life expectancy of six months or less. “Is there a way to think about that and talk about that differently? Because these various illnesses and how they proceed is different,” he says. “There isn’t (always) a clear six-month prognosis. We need to evolve that in a thoughtful, meaningful way that is still efficient and uses our resources responsibly.” 

Robert Calandra is an independent journalist in the Philadelphia area.

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