MedPAC Finalizes FY2014 Hospice Recommendations

The Medicare Payment Advisory Commission (MedPAC) on Jan. 11. 2013 finalized hospice recommendations for inclusion in its March Report to Congress. As reported in December,MedPAC will recommend a zero market basket update for hospice payments beginning Oct. 1, 2013. It is estimated that the recommendation would save $50 to $250 million over one year and between $1 and $5 billion over five years. MedPAC also will include in its report standing recommendations that were first included in its 2009 report:

  • Payment Reform Recommendation:
  • Increase payments per day at the beginning of the episode and reduce payments per day as the length of the episode increases;
  • Provide an additional end-of-episode payment to reflect hospices’ higher level of effort at the end of life;
  • Budget neutral payment system in the first year.
  • Recommendation for focused medical review of hospices with many long-stay patients

Given uncertainties about whether or not the 2 percent cut in Medicare payments required under the sequester will be implemented as scheduled in March, Chairman Glenn Hackbarth clarified that MedPAC does not intent for its recommendation, in combination with the scheduled sequester, to result in reimbursement cuts over the FY2013 payment level, except that they do expect a continuation of the phase out of the Budget Neutrality Adjustment Factor (BNAF) to the hospice wage index. The BNAF phase out has an annual impact of -0.6 percent on payments.

For this year (2013), MedPAC estimates hospice financial margins to be 6.3 percent (as compared with 7.5 percent in 2010). MedPAC staff reported that supply of hospice providers, volume of services provided, and access to capital all seem to be adequate. The staff presentation slides, which contain additional data about the Medicare hospice program, are available online at the following location: percent20public.pdf . The transcript of the entire two-day meeting is available here: ; the hospice discussion begins on page 326.

Perhaps the most engaging part of the Commission’s discussion centered around potential options for future research, including:

Exploration of options to facilitate appropriate use of hospice among interested patients or promote quality of end-of-life care more generally. For example, could explore:

  • Shared decision-making;
  • Including hospice in MA rather than current carve-out;
  • Focused FFS demonstrations of broader hospice eligibility;
  • Including hospice in bundled payments approaches for episodes;
  • Potential end-of-life care quality measures.

Staff noted that shared decision-making was examined to some degree by the Commission a few years ago; a further update will be provided at a forthcoming spring meeting; the Commission is interested in engaging in additional discussions on how to improve the quality and timing of discussions between patients and physicians relative to care choices, including end-of-life choices. Relative to including hospice in MA, staff posited that such an arrangement might result in better integration. Discussion on demonstrations of broader hospice eligibility raised comments about the concurrent care demonstration authorized under the Affordable Care Act (but not yet funded by Congress) as well as mention of an AETNA program focused on a younger population that allows coverage of concurrent care without an increase in care costs. Commissioners commented that bundled payment approaches could raise practical problems in hospice.

From the NAHC Report Article