Hospices Often at ‘End of List’ for PRF Funds

Hospice providers welcomed the news last month that the Biden administration was moving forward with the fourth round of Provider Relief Funds (PRF), totaling $17.7 billion. Nevertheless, stakeholders in the space argue that more assistance is sorely needed, as providers work to untangle the relief program’s requirements. 

Managed by the U.S. Department of Health and Human Services (HHS) and the Health Resources and Services Administration (HRSA), the PRF program was created via the CARES Act enacted last year, which earmarked $175 billion to assist health care providers across the continuum. The amount of funds allocated for each health care sector is based on a percentage of the Medicare reimbursement that a provider receives.

With much of the nation’s attention focused on hospitals and nursing homes, hospice tends to come last among care settings when it comes to federal support, National Hospice & Palliative Care Organization President & CEO Edo Banach told Hospice News.

“There’s been disproportionate support for institutional providers, and even much less support for community-based providers. Hospice, often and unfortunately, comes really at the end of the list,” said Banach. “A number one issue is making sure that we have sufficient staff to serve the folks who have a need for hospice and palliative care services.”

Phase 4 funding could help to alleviate staffing pressures proliferating in health care during COVID-19. Additional federal support would better position hospices to raise salaries or offer bonuses that many would find unsustainable — especially smaller-community based hospices, according to Banach.

Workforce shortages have affected nearly every provider in the space and have forced some organizations to shut down their programs or sell off their operations. The coronavirus pandemic hasn’t helped. Slightly more than 20% of health care workers have considered leaving the field due to stress brought on by the pandemic, and 30% have weighed reducing their hours, according to a study published in JAMA Network Open.

As the workforce dwindles, demand for care is rising. Staffing obstacles have been compounded for hospice serving rural communities, as lower population density makes for a leaner labor pool. PRF Phase 4 included bonuses for providers that serve underserved communities and rural populations, as well as those that care for Medicaid, CHIP, or Medicare patients who tend to have lower incomes and more complex medical needs. The bonuses will be based on Medicare reimbursement rates.

Determining how providers can apply PRF funds to support recruitment and retention has been confusing, according to Sandy Kuhlman, executive director at Hospice Services of Northwest Kansas.

“One of my biggest concerns is staffing,” said Kuhlman. “Trying to understand what will work and what won’t, and how we can use these funds has been challenging. There’s still so much unknown. We’ve tried to do what we can for staff, looking at our budget and what we have to give to try and stay competitive. We’re also looking at some non-salary benefits and trying to be open scheduling flexibility, looking at other ways we can structure work for the staff that might be seen as a benefit that may not cost us.”

Funding from the latest round of PRF will hopefully assist providers’ ability to recruit staff and continue to meet the demand for care in their communities. In the interim, providers are carefully unpacking the complex criteria and requirements associated with PRF.

“The pandemic has just been a horror show of lost revenue, and there’s been a lot of confusion about how we’re going to report funds we’ve received. At first there were no strings attached, but as it turns out, there were more strings,” Mark Murray, president and CEO of the Center for Hospice Care in Indiana, told Hospice News. “We had to hire a separate CPA firm who specializes in making sure that Medicare providers are paid appropriately, because for us to do the documentation — especially when we didn’t know what was going to be expected —was going to be impossible. They’ve been a great help, and their fees are included in the $1.4 million in funding we’ve received.”

Funding from the latest round of PRF will hopefully continue to support the hospice’s operations at its current level of patients, as well as lead to the ability to fill its ranks with more staff as demand for care rises, according to Murray. Staff recruitment has been a large issue during the pandemic, with Murray indicating that vaccine mandates could be a source of further contention.

Hospices are unique among most health care providers because they generally have one avenue for reimbursement, the Medicare Hospice Benefit. While a large contingent of providers have diversified their services to include upstream care, most still earn most of their revenue by providing hospice.

Nearly two years into the pandemic, hospices continue to face surging costs for personal protective equipment (PPE) supplies and COVID-19 testing kits, paid leave for staff and investments in telehealth. These considerations have added $30,000 in annual excess costs for the Coastal Hospice & Palliative Care in Maryland, a mostly rural nonprofit provider.

While these costs have bogged down hospices of all walks, smaller providers have had difficulty keeping up. The hospice provider saw its PPE and cleaning supply costs rise by $30,000 annually, cleaning and sanitizing supplies, COVID-19 testing and IT costs to ensure connectivity to patients in rural areas. Coastal Hospice President Monica Escalante told Hospice News that these costs added a new layer of difficulty and an additional investment.

“For smaller providers who serve wide geographic regions, the distance for us to cover is enormous and the cost of resources to provide care is significant and different for us during this time,” said Escalante “COVID testing is a big concern, not just with test shortages but with cost. To afford our staff we need to have infection prevention and control done on an ongoing basis. We find ourselves in a pickle if we aren’t finding enough test kits at the right price to continue at this pace.”