The government should consider 5% Medicare payment cuts for hospice services provided in skilled nursing facilities, according to Medicare Payment Advisory Commission (MedPAC) commissioners.

Speaking at a public meeting last Thursday in Washington, D.C., the commissioners revisited recommendations from a 2011 report from the Department of Health and Human Services Office of Inspector General (OIG). That report gave advice to the Centers for Medicare & Medicaid Services in advance of an Affordable Care Act requirement to reform Medicare hospice payments after Oct. 1, 2013.

“Medicare currently pays hospices the same rate for care provided in nursing facilities as it does for care provided in other settings, such as private homes,” the OIG researchers wrote, arguing for payment reform. “The current payment structure provides incentives for hospices to seek out beneficiaries in nursing facilities, who often receive longer but less complex care.”

Furthermore, hospices provide more aide visits on average to SNF residents than at-home patients, even though nursing staff should be on hand to provide assistance with daily living activities, the MedPAC commissioners said.

CMS could enact anywhere from a 3%- to 5%-cut in hospice payments for SNF residents, MedPAC proposed. This reduction is based on a formula that assumes “equal provision of aide visits” in home and facility settings, and accounts for the labor costs of these two types of care.

While MedPAC focused on how Medicare hospice payments may be unnecessarily high, a recent report from New York’s Mount Sinai Medical Center showed that increasing hospice enrollment could save millions of Medicare dollars annually. The program could save $6.4 million dollars each year if an additional 1,000 people enrolled in hospice 15 to 30 days before dying, the researchers found.