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Policies that limit access to hospice care for dementia patients in nursing homes to save on costs may be doing the opposite, according to new research. 

While the cost savings for continual hospice care in facilities is less than in community settings, there is still a marked savings, according to study findings in the journal Health Affairs. Nursing home patients receiving hospice care incurred healthcare costs $462 lower than when enrolled for the last three days of life; $2,300 lower costs the last week of life; $3,374 lower the last two weeks; and $4,481 lower the last month of life, when compared with those in facilities who did not utilize hospice services. 

“Medicare policies that reduce hospice access and incentivize hospice disenrollment may actually increase Medicare costs, given that hospice cost savings generally derive from a person’s last days or weeks of life,” the authors explained. “A key implication of our findings is that once a person with dementia enrolled with hospice, it was economically optimal for that person to remain enrolled with hospice until death to avoid hospitalizations in the last week or weeks of life.”

Dementia patients tend to be enrolled in hospice for longer durations than others, and all patients enrolled in hospice care can have an unlimited number of days so long as they are recertified as having a six-month prognosis after the first six months of care. But dementia patients also have a higher rate of disenrollment compared with other hospice patients, the study authors noted.

“Although hospice disenrollment can occur for many reasons and may be initiated by the hospice or the patient or their family, a particular concern for people with dementia is hospice-initiated disenrollment because a person no longer has a six-month prognosis and hospices do not want to risk having Medicare payments withheld,” the researchers wrote. “Disenrollment from hospice represents a disruption in continuity of care and is associated with higher rates of hospital use and hospital death.”

The study’s cohort comprised 4,600 individuals identified as having been diagnosed with dementia, having utilized hospice care and died between 2002 and 2019. Slightly more than 1,000 patients enrolled in hospice while living in a nursing home. Researchers measured total healthcare spending as the sum of various sources and payers, including Medicare, Medicare Advantage, and Medicaid. 

The researchers pointed out there was no difference in the last year-of-life costs for dementia patients living in nursing homes whether they were enrolled in hospice or not, although they did notice cost shifting between Medicare and Medicaid. 

“Specifically, one-year costs were higher for Medicare and lower for Medicaid for people with dementia in nursing homes who received at least one day of hospice,” researchers found.