Certificate of Need Laws May Influence Hospice Quality Outcomes

Links exist between state certificate of need (CON) laws and hospice quality outcomes, researchers recently found.

Roughly 86% of all hospices nationwide provide services in states that do not have certificate of need (CON) regulations in place, according to research from the American Journal of Hospice and Palliative Medicine. The remaining 14% of hospices in states with a CON provision in place had a higher unadjusted mean Hospice Item Set (HIS) quality score for all measures than those that did not.

Though CON laws correlate with higher quality outcomes, that doesn’t necessarily mean these regulations are necessarily the cause, according to researchers Arlen Gaines and John Cagle. Gaines is a doctoral candidate in palliative care at the University of Maryland, and Cagle is an associate professor at its School of Social Work.

“We did find that the states that do have CON for hospice seem to be associated with a higher level of quality,” Gaines told Hospice News in an email. “The association is predictive, but we can’t say that CON status necessarily causes higher-quality outcomes. It’s incumbent upon lawmakers to have data to guide their policy decisions, especially as many states are examining their CON provisions. It’s important for lawmakers to stay on top of the research, as they gather information that impacts their decision-making.”

Digging into the data

Researchers cross-referenced the incidence of CON laws with Hospice Item Set (HIS) data from the February 2022 Medicare Hospice Provider and General Information reports.

The U.S. Centers for Medicare & Medicaid Services (CMS) developed HIS as a tool to gauge a patient’s overall care experience. The agency requires hospices to submit HIS data for each patient served. Those who do not report those data risk a payment cut of 2% across the board.

The study compared each of the HIS quality measures across roughly 4,870 hospices nationwide. Hospices in states with CON laws on average saw higher quality scores in 4 out of the 8 measures, the research found.

The differences in quality scores between states with and without CONs were slight, but significant, according to Cagle.

“This is an important study, as it expands our conversations related to hospice quality to include the important topic of certificate of need,” Cagle said. “The differences we saw were significant, but slight. The reported percentages of the HIS scores across the board are generally at a mean score of above 90%. However, these small differences in reported percentages we found in relation to CON status may hold greater weight.”

The findings are important for federal and state policymakers to understand as they monitor for quality and compliance, he stated. The data also offer a guide for state lawmakers as they evaluate how CON laws take shape in their own regions, Cagle added.

Currently 35 states and Washington, D.C., operate CON programs, according to data from the National Conference of State Legislatures (NCSL).

These laws often exist in a state of flux, and their provisions vary widely from state to state.

These differences make it difficult to pinpoint how these regulations may influence quality, according to Paul Ledford, president and CEO of the Florida Hospice & Palliative Care Association.

“Every state with hospice CON does it differently, so when you examine one state CON Law, you’ve examined one state CON law,” Ledford told Hospice News.

Some certificate of need regulations are oriented around curbing health care costs. Other CON laws focus on controlling the entry of new hospice providers within a certain region, he explained.

In addition, the complexity of HIS scoring structure covers a wide range of patient experiences across the hospice spectrum, Ledford stated.

“Regarding hospice quality scoring, I’m not sure there is a correlation between CON and quality scores for a number of reasons,” he said. “Hospice quality scores are improved only by the dedication of resources to that purpose. The survey tool is complex … It is a moving target, because there is no static measure of success. It is always a comparison to others using those measures. It is not a letter grade in the conventional sense.”

Their research also suggested a “slight association” of higher quality scores for providers in states with these regulations, “especially for the small and medium-sized hospices,” Gaines stated.

“When looking closely at an analysis of size, we found that CON status is more influential on quality when hospices are small (average daily census of less than 50) or medium (50-99), but that the impact of CON on larger hospices seems to disappear,” she indicated.

One reason for variations by company size may be that larger hospices often have a broader scope of services and resources to offer patients beyond the minimum levels of care outlined in the Medicare Hospice Benefit, according to Ledford.

Other factors might include differences in hospices’ service regions, which can impact census volumes, as well as the amount of quality data available, according to Peggy Funk, executive director of the Hospice & Palliative Care Network of Maryland.

Some states with CON laws in place may have higher numbers of smaller, nonprofit hospices compared to states without these regulations, Funk indicated.

The presence or absence of CON laws can be the difference between thriving and surviving for some smaller hospices, she said.

“Maryland has mostly small not for profits providers. Maryland is also oriented towards a controlled entry into the marketplace, and picking the most qualified candidate when a need arises,” Funk told Hospice News in an email. “The [Maryland health Care Commission (MHCC)] has recently worked to streamline this process. We believe that without the CON, the number of providers entering the market would skyrocket. As we’ve observed in other states, the more populated areas of the state would be ‘cherry picked,’ leaving nonprofits with rising costs to compete for interdisciplinary team members, volunteers and charity donations — all of which are currently in short supply.”