Longer Stays in Hospice Cause Financial Problems

Numerous hospice providers nationwide are facing financial problems due to their patients living longer than expected. You would assume this would obviously be a positive development, yet the effects on hospices’ aren’t.

Over the last eight years, the federal government has had to demand that hospices exceeding reimbursement limits repay hundreds of millions of dollars to Medicare.

A 2006 report concluded that Medicare spent $6.7 billion on hospice care in the year 2004.

When the Medicare hospice benefit first went into act in 1983, it was designed for patients who were expected to live six months or less. Most of these patients were cancer victims. In recent years, hospice use has increased dramatically for a wider realm of patients with illnesses from Alzheimer’s disease and dementia. This has cause the average stay of patients in hospice to rise to 86 days.

The Medicare Payment Advisory Commission, who analyzes Medicare issues for Congress, stated that 220 hospices (one for every 13 providers) had received repayment demands totaling to $166 million.

Medicare’s spending on coverage of hospice has tripled from the years 2000 to 2005 to $8.2 billion and 40 percent of Medicare recipients now use this service.

A cap on how much hospice providers can be reimbursed each year cannot exceed the number of patients it serves and a pre-patient allowance has been set by the government each year. The longer lengths of stays have proven to cause problems with the cap, hospice’s finances and even shutting down some facilities.

It has been almost 25 years since the Medicare hospice benefit has been in effect and it is about time that lawmakers make a revision, otherwise more hospices may face closing. Hospices remain to be extremely cost-effective for patients when you compare the average daily stay in a hospital to $5,036 and in hospice, $136.