Inspector general recommends lower Medicare payment rates to nursing home hospices

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Bundled payment initiative for providers coming: CMS
Bundled payment initiative for providers coming: CMS

A new federal audit has found that Medicare spending on nursing home hospice patients increased by 69% over four years. Now, regulators are recommending a reduction in payment levels for nursing home-based hospice patients.

Medicare spending on hospice patients in nursing facilities jumped from $2.6 billion in 2005 to $4.3 billion in 2009, according to an audit by the Department of Health and Human Services' Office of the Inspector General. The audit found about 58% of increased Medicare outlays were the result of higher enrollment and the length of stays. Additionally, the audit found that hospices with more than two-thirds of their patients in nursing homes earned on average $21,306 per patient, which was $3,182 more than the overall average cost per hospice patient.

The report recommends the Centers for Medicare & Medicaid Services "monitor hospices that depend heavily on nursing facility residents" and "modify the payment system for hospice care in nursing facilities." 

Jodi Nudelman, head of the Inspector General's New York office, said in a podcast accompanying the report that hospices provide on average just four services per week for Medicare beneficiaries in nursing homes. “And many of these services were similar to the services that nursing facilities already are being paid for,” she said, according to Kaiser Health News.

In a written response, CMS said it would move to reduce payment levels for nursing home-based hospice, per the IG report, according to Kaiser Health. Medicare payments to hospices have recently drawn increased scrutiny.