The Medicare Payment Advisory Commission (MEDPAC) plans to recommend that the U.S. Secretary of Health & Human Services require hospices to report telehealth visits on Medicare claims. The commission will also recommend to Congress that Medicare base payment rates hold at current levels for 2023, and repeated its call to cut hospice aggregate cap by 20%.
MEDPAC indicated that a lack of telehealth utilization data during the pandemic has made it difficult to accurately predict costs for coming years.
“The second recommendation regarding telehealth services was motivated by the expanded use of telecommunications-based visits during the public health emergency (PHE) and the need to know the extent to which telehealth visits are being conducted and access to care during the PHE,” MEDPAC indicated in the transcript of its most recent meeting. “The secretary should require that hospices report telehealth services on Medicare claims. Requiring hospices to report telehealth visits would increase the program’s ability to monitor beneficiary access to care.”
Collecting data on telehealth visits could improve the agency’s ability to monitor access to hospice, though it might also have providers incurring “some additional administrative costs associated with claims data reporting,” according to MEDPAC.
The commission has recommended cuts to the payment cap for several years running, so far Congress has not done it. The payment cap is the upper limit in the amount of funds a hospice can collect from Medicare within a single year. If a hospice surpasses the payment cap, it must refund that amount to the U.S. Centers for Medicare & Medicaid Services (CMS).
For Fiscal Year 2022, the hospice cap is $31,297.61 per patient (not wage adjusted). About 19% of hospices exceeded the cap in 2019, according to MEDPAC. On average, hospices exceeding the cap saw margins in the range of 22.5%, which fell to 10% following refunds to CMS for cap overages.
The proposed cuts to the payment cap are designed to target hospice providers that see longer lengths of stay and high margins, improve equity of the payment cap among different types of providers, and generate cost savings for taxpayers and the Medicare Part A Trust Fund, MEDPAC has reported.
“Changing the cap in this way would make it more equitable across providers and would reduce aggregate Medicare expenditures by focusing payment reductions on providers with long stays and high margins, while the majority of providers’ payments would be unaffected by the cap policy change,” MEDPAC indicated. “Given the margin in the industry and our other positive payment adequacy indicators, the analysis suggests that hospice aggregate payments exceed the level needed to furnish high-quality care.”
MEDPAC also reported that hospice utilization dropped to 47.8% among Medicare decedents in 2020, down from 51.6% in 2019. Though the number of Medicare decedents who used hospice increased by 9% during this span, the share of deaths rose more rapidly than enrollment, leading to a decline in utilization rates that was “not unexpected” given the pandemic’s impacts, according to MEDPAC.
COVID-19 has claimed more than 805,100 lives nationwide since the outbreak’s onset, according to recent data from the U.S. Centers for Disease Control and Prevention (CDC). Many of these patients have come onto hospice services within the last days of life rather than reaping the full six-months of the benefit.
Average length of stay among Medicare decedents increased during 2020, while median length of stay was stable, MEDPAC reported. The amount of visits provided to hospice enrollees declined between 2019 and 2020 from an average of 4.3 visits per week to 3.5 visits.
The dip was largely offset by the rise in telehealth visits during the pandemic, though the comparison was not quantifiable without reporting data available. Unlike in-person visits, hospices are not required to report telehealth visits on Medicare claims. This lack of data impairs the ability to understand the extent to which telehealth visits were provided during the pandemic and the weight they may have on hospice visitations overall.
The pandemic also caused a shift in hospice care settings, with an increase in the number of patients receiving care at home, in assisted living facilities and hospitals, and a decrease among those in skilled nursing or inpatient hospice facilities.
Staffing shortages plaguing the hospice sector have intensified during the pandemic, an issue to which MEDPAC is giving more attention due to the potential impact on costs. Rising turnover due to COVID-19 has exacerbated the crisis, with some hospice providers and health systems shutting down their programs or selling off their operations due to an inability to recruit or retain a sufficient number of employees. Slightly more than 20% of health care workers have considered leaving the field due to stress brought on by the pandemic, with another 30% weighing the option to reduce their hours, according to a study published in JAMA Network Open.
“Everything we’re hearing already suggests big staffing shortages, and that’s especially true among the most senior staff,” said David Grabowski, professor in the Department of Health Care Policy at Harvard Medical School and MEDPAC member. “Looking forward, I imagine this issue is only going to become magnified in the coming years. I’m already hearing a lot about the use of contract staff. That’s going to inflate costs; that’s going to be an issue that we’re going to want to think about.”
Overall in 2020, more than 1.7 million Medicare beneficiaries, including nearly half of decedents, received hospice care from an estimated 5,000 hospice providers, according to the MEDPAC report. Medicare paid out $22.4 billion to these providers last year. The number of hospice providers grew by 4.5% last year. For-profit providers accounted for nearly all of that growth.
The recommendation to keep 2023 base payments at current levels could reduce Medicare aggregate expenditures by 3.7%, according to the commission.
“We’ve assumed higher cost growth that we’ve seen historically in this [hospice] sector,” said Kim Neuman, principal policy analyst at MEDPAC. “The margins have been stepping up almost every year, and that’s because costs grow more slowly than payment rates.”
