Home Health & Hospice

Insider's Scoop: Federal scrutiny for LOS and for-profit hospice facilities

Homecare Insider, August 22, 2016

Editor’s note: The following is an excerpt from The Hospice Guide to Billing and Reimbursement: Durable Guidance and Strategy.


Federal and state regulators as well as private payers are working hard to curb the costs of Medicare and Medicaid programs. Although the vast majority of hospice providers are operation within the law, regulators have identified some bad actors. For example, a recent Office of Inspector General (OIG) study of hospice care in ALFs raised concerns about the possibility of hospices focusing on certain types of patients under the current payment system. The OI study concluded that hospices have financial incentives to serve patients in ALFs because these patients tend to have diagnoses associated with longer stays (such as ill-defined conditions, mental disorders, or Alzheimer’s disease) that often require less complex care and result in higher payments per patient for the provider.


Hospices with payments above the cap amount (also called above-cap hospices) have substantially longer patient lengths of stay than hospices with payments below the cap amount (below cap hospitals). About 42% of patients receiving care from above-cap hospices in 2012 had stays exceeding 180 days compared with about 20% of patients treated by below-cap hospices. Eleven percent of hospices exceeded the aggregate payment cap in 2012, according to the Medicare Payment Advisory Commission (MedPAC) report Hospice services: assessing payment adequacy and updating payments.


Above-cap hospices also have substantially higher rates of discharging patients alive than other hospices. These statistics may suggest that above-cap hospices are admitting patients who do not meet the hospice eligibility criteria, which merits further investigation by OIG and CMS, the MedPAC report stated.

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