Summary of Latest OIG Report and What It Means For Hospices
January 21, 2015 10:54 AM
Earlier this month the OIG released a report on hospices, Medicare Hospices Have Financial Incentives To Provide Care In Assisted Living Facilities (ALFs).
This report provides information to inform CMS’ payment reform decisions. The report is part of the Office of Inspector General’s (OIG) larger body of work on hospice care. While the report focuses on ALFs, many of the issues identified pertain to the hospice benefit more broadly. They are similar to those that both OIG and MedPAC have identified in other hospice settings, such as nursing facilities.
The report raises concerns about the financial incentives created by the current payment system and the potential for hospices to target beneficiaries in ALFs because they may offer the hospices the greatest financial gain. Together, the findings in this and previous OIG reports show that payment reform and more accountability are needed to reduce incentives for hospices to focus solely on certain types of diagnoses or settings.
The OIG could not make statements about the ALFs where the services were provided due to the lack of information available on these types of facilities, nor did the OIG assess eligibility status for the hospice benefit or assess whether services were appropriate.
Findings of this report are summarized below:
Medicare payments for hospice care in ALFs more than doubled in 5 years, totaling $2.1 billion in 2012.
Seventy-three percent of Medicare hospices provided care in ALFs in 2012. Medicare payments to hospices for ALF residents increased 119 percent from 2007 to 2012. This represents 14 percent of total Medicare spending on hospices in 2012. Overall hospice spending during this period increased 46 percent, and increased 38 percent for all settings other than ALFs.
Hospices provided care much longer and received much higher Medicare payments for beneficiaries in ALFs.
Thirty-six percent of beneficiaries in ALFs spent more than 180 days in hospice care compared to 28 percent of beneficiaries in nursing facilities (NF) and 22 percent of beneficiaries at home. Beneficiaries in ALFs had a median length of stay of 98 days, about twice as long as beneficiaries in NFs and more than twice that of beneficiaries at home.
Medicare paid twice as much for care for beneficiaries in ALFs than for beneficiaries in other settings. The longer lengths of stay in the ALF explain this.
The number of beneficiaries in ALFs was 120,444 compared to 195,820 in NF, 673,312 at home and 87,282 in skilled nursing facilities (SNF).
Most beneficiaries in ALFs had diagnoses that typically require less complex care.
Beneficiaries in ALFs were six times more likely to have diagnoses of ill-defined conditions, mental disorders, or Alzheimer’s disease as their terminal illness rather than a cancer diagnosis. Beneficiaries with ill-defined diagnoses typically receive less complex care for longer periods of time than beneficiaries with a cancer diagnosis.
Hospices typically provided fewer than 5 hours of visits per week and were paid about $1,100 per week for each beneficiary receiving routine home care in an ALF.
Most of the visits were aide visits. Visits ranged from 0-66 hours per week with 25 hospices reporting no visits to their beneficiaries in ALFs in 2012. This represents 210 beneficiaries. Hospice physicians rarely saw beneficiaries who received care in ALFs according to the report, and hospices seldom provided services in ALFs on weekends.
For-profit hospices received much higher Medicare payments per beneficiary than nonprofit hospices.
The median amount Medicare paid for-profit hospices was $18,261 per beneficiary in an ALF for care from 2007 through 2012. In comparison, the median for nonprofits was $13,941. This is because beneficiaries in ALFs served by for-profit hospices had longer lengths of stay – the median LOS for for-profit hospices was nearly four weeks longer than the median length of stay for non-profit hospices (111 days and 85 days respectively). In addition, for-profit hospices received a higher percentage of their Medicare reimbursement from care in ALFs. In 2012, for-profit hospices received a median of 11 percent of their Medicare reimbursement for care provided in ALFs, compared to 7 percent for nonprofit hospices.
Some for-profit hospices stand out for their use of the most expensive level of hospice care (continuous home care -- CHC).
Sixty-four percent of all Medicare payments for the continuous home care level of care in ALFs during 2012 went to one hospice, a for-profit chain, according to the report.
Many for-profit hospices appear to have targeted ALFs -- 97.
Hospices relied on ALFs for most of their Medicare payments. For these hospices, care provided in ALFs accounted for more than half of the Medicare payments they received in 2012. The majority of these (90 of 97) were for-profit hospices.
Almost half of the 90 hospices were part of hospice chains. Notably, eight of the nine hospices with the highest Medicare payment amounts for care provided in ALFs were part of hospice chains.
Recommendations from the OIG and this report’s potential impact on hospices are summarized below.
Based on these findings, the OIG recommends that CMS, as part of its ongoing hospice reform efforts: (1) reform payments to reduce the incentive for hospices to target beneficiaries with certain diagnoses and those likely to have long stays, (2) target certain hospices for review, (3) develop and adopt claims-based measures of quality, (4) make hospice data publicly available for beneficiaries, and (5) provide additional information to hospices to educate them about how they compare to their peers. CMS concurred with all five recommendations.
Hospices should note that the OIG has identified concerns similar to those resulting from this report in other parts of the hospice benefit. Notably, a previous OIG report raised similar concerns regarding beneficiaries in nursing facilities. Previous OIG reports also have found that hospices often did not provide the number of services outlined in the plans of care they established and that several hundred hospices did not provide any level of hospice care other than routine home care. The results of this report, previous OIG reports, MedPAC research and data sourced by CMS and published in the 2013 and 2014 Hospice Technical Reports, clearly layout the concerns present about hospices. They also point out the fact that a small number of hospices are at the center of the some of the concerns.
Hospices can get a glimpse of what the future of hospice may look like by reviewing this and other reports, the 2013 and 2014 hospice technical reports, and CMS’ response to the OIG’s recommendations.
For-profit hospices may be receiving more attention from oversight bodies such as the OIG and CMS than non-profit entities, especially those for-profit hospices with a large percentage of their patients in ALFs. All hospices should be review their documentation for hospice eligibility, especially long-stay patients (those over 180 days) to ensure compliance with the Medicare eligibility requirements as well as requirements for the level of care provided, especially continuous care and general inpatient care. All hospices should also be looking at the number and types of visits they make to hospice patients.
Regarding payment reform, the OIG encourages CMS to consider other options, particularly those that tie the specific needs of the beneficiary–as identified in the beneficiary’s comprehensive assessment–to payment rates and take into account the number and types of hospice visits and services needed, regardless of whether they are at the beginning or end of the beneficiary’s time in hospice care. As most hospices know, CMS is considering a tiered payment model as part of hospice payment reform. That tiered payment model would include higher payment for patients at the beginning of hospice care, slightly higher payments at the end of hospice care, and lower payments in the middle. The OIG’s recommendation in this report could impact the type of payment model CMS will consider for hospices.
CMS has indicated that it is looking at models of payment for hospices that more closely align with the changing needs of hospice patients throughout the course of a hospice election. Since April 1, 2014 hospices are required to include additional data on their claims, i.e. drug and infusion pump costs and some visits in 15-minute increments. CMS will use this additional information from claims hospices are submitting now. Note that this data was not available to the OIG as they did their analysis so while they could see how many visits were made they could not identify the non-visit services being provided by the hospice.
CMS supports the development of Fraud Protection System models targeting hospices that have high percentages of beneficiaries who rarely receive visits, as well as considering hospices that provide high percentages of their beneficiaries with care at the continuous care level. Hospices providing no visits to high volumes of hospice patients should be considered high risk, according to CMS.
Regarding the OIG’s recommendation of claims-based measures of quality, CMS stated that it will consider including claims-based measures as part of its measure development, such as the average number of services the hospice provides, the types of services, how often physician visits are provided, and how often a hospice provides services on the weekend.
CMS stated that it plans to publicly report data from the Hospice Item Set as well as any future measures to be developed in the Hospice Quality Reporting Program and that the OIG’s recommendations fit right into CMS’ push for transparency. The OIG suggested that CMS take the interim step of making available to the public claims-based hospice data regarding the number and types of services a hospice provides, including physician services and services on the weekend. Given the OIG’s position on reporting of claims-based data, hospices should be prepared for publicly reported data to possibly include data from claims, and for that data to be publicly reported, potentially, prior to the quality outcome measures.
Regarding the OIG’s recommendation to provide data to hospices about how they compare to their peers, CMS stated that the development and implementation of a standardized data set for hospices must precede providing information to the hospices or for public reporting of hospice quality measures. Data collected by hospices during the first three quarters of CY2015 will be analyzed starting in the fourth quarter of CY2015. Decisions of what to report and to whom (hospices or hospices and the public) will be determined based on this analysis. CMS will develop an infrastructure for public reporting and allow hospices to review their data. CMS does not anticipate hospice review and public quality reporting occurring in FY2016, but could occur in the FY2018 annual payment update year -which runs from October 1, 2017 – September 30, 2018.
CMS does expect that providing additional data to hospices will occur soon.