Even after all of the years that I have been in health care and particularly, post-acute care, I still field a good number of questions regarding Hospice, the benefit under Medicare, how payments work, and what the generalized payment amounts are.
Having started a few hospices in my career, I can attest that done right, particularly as an adjunct business to an existing potential referral source (e.g., CCRC or multi-site senior living organizations, a health system, etc.), hospice is a good business, a good value-based care program, and a great service for patients/residents and their families.
I’ve written about hospice off and on for the duration of this site’s existence. Basically, there is a lot of hospice related stuff on this site. Browse if interested, particularly the stuff related to fraud and abuse (too prominent unfortunately, in the hospice industry).
Gaining an understanding of how hospice works and how payments are made is essentially, the primer to understanding hospice as a core component of the care continuum. As Medicare is the primary payer for hospice care, Medicare rules fundamentally dictate how hospice businesses operate. A great resource on the program and payment basics comes from MedPAC and it is available here: MedPAC_Payment_Basics_23_hospice_FINAL_SEC
Hospice as a program of care, is an election for a Medicare beneficiary. Under the following conditions, a patient may elect to receive their benefits under the Medicare Hospice program from a Medicare certified hospice.
- Patient via physician certification/attestation, has a life expectancy (likely) of 6 months or less, barring any life sustaining interventions.
- Patient chooses to forego life sustaining treatments, choosing to die naturally with palliative services (pain and symptom control).
- Patient voluntarily elects hospice care via a certified hospice, effectively disenrolling from traditional Medicare, receiving going forward, all care via the Hospice, direct or contracted.
- When the patient elects, there is no deductible or cost share for hospice services BUT hospice covers the cost of care and services, including medications, related to the dying/terminal disease process, including physician care.
- Patient may at any time, elect to withdraw from the hospice program, and return to traditional Medicare.
- For Medicare Advantage patients, for the vast majority of cases, this same process applies. CMS is just now exploring wrap-around options for Medicare Advantage providers allowing their patients to access hospice benefits and yet, remain with their Medicare Advantage program (more on this in a future post).
Once enrolled in the hospice benefit with a hospice, patients will have access to four levels of care.
- Routine Home Care: 98% of all care falls in this category. This level is where the hospice provides skilled nursing, volunteers, nursing assistants to patients at their place of resident to assist with palliation of symptoms and provide services to assist with some activities of daily living. Other regular care for the patient such as meals, laundry, dressing is typically provided by the patient’s family, friends or if staying in a care environment (e.g., assisted living, skilled nursing, etc.) by the care staff.
- Continuous Home Care: Round the clock or substantially, the majority of the day, whereby the hospice staff, typically nurses, tend to the patient’s needs at the home. This level of care is most common at the end of life where extreme symptom management is needed or at a point during the patient’s stay in hospice, where a significant change of condition comes with extensive symptoms and additional direct care is required to manage the symptoms.
- Inpatient Respite Care: A brief stay where the patient transfers to an inpatient environment and receives care in this environment so that familial care members or significant others can receive a break in caregiving. Typically, this occurs so that the familial/significant other caregivers can access care for themselves or tend to other needs such as funerals, other family, offsite events, etc.
- Inpatient Care: Similar to Continuous Home Care with the exception that the patient transfers to (typically) a special care environment such as a skilled nursing home, a hospital or a distinct hospice unit to receive expanded clinical care services for symptom management such as pain control (frequent medication changes, IV therapy, etc.).
Each level above has its own associate payment rate under Medicare except, Routine Home Care has two rates plus add-ons for the last days of life. Days 1-60 under Routine have a specific payment amount (daily rate). After day 61, if the patient is still alive, the Routine daily rate falls slightly. At the period of death or proximal death (final seven days), additional payment is available as an add-on, for additional nurse and social work visits.
Payments adjust up or down annually and are sensitized by geographical labor cost differences.
The hospice program includes two dollar value caps.
- One cap limits the number of days of inpatient care an agency may provide to not more than 20 percent of
its total patient care days. - Another cap is an absolute dollar limit on the average annual payment per beneficiary that a hospice can receive.
- If a hospice’s total payments exceed its total number of Medicare patients multiplied by $33,494.01
for fiscal year 2024, it must repay the difference.
- If a hospice’s total payments exceed its total number of Medicare patients multiplied by $33,494.01