Medicare’s spending on hospice has nearly doubled, going from $15.5 billion to $27.5 billion from 2015 to 2024, according to a WatchBlog post from the Government Accountability Office.
Here is what to know.
1. The increase in spending is partially explained by a growing number of patients receiving hospice care. The number of people enrolled in hospice care per year grew by 32% in the time period, and the average number of days in care increased 15%. Long stays of more than 180 days accounted for the majority of hospice spending in 2024.
2. Medicare pays a daily rate for hospice home care, meaning regardless of how often a patient is visited or by whom, the payout is the same. Paying per day can create financial incentives for hospices to minimize the care they provide, the report said.
3. Low-visit hospices provided about 2.5 visits per patient per week on average, compared to high-visit hospices providing about 5.5 visits per week. When comparing payments between these two groups, Medicare effectively paid low-visit hospices twice as much per visit as high-visit hospices, on average.
4. Hospices receive higher per-visit payments than home health agencies do. Medicare paid about $16.7 billion for routine home care in recent years, but would have paid about $9.1 billion if care was paid per visit instead of by day — a difference of about $7.6 billion.
5. CMS said it does not have the statutory authority to change the way Medicare pays hospice, but it could make changes if directed to do so by Congress.
“We think Congress should consider directing CMS to revise its hospice payment system. Doing so could make Medicare payments more efficient and reduce the incentive for fraudsters,” the report said.
Read the full report here.
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