NPHI: Increase Scrutiny of PE Hospice Transactions

Federal regulators should increase scrutiny of private equity activity in the hospice space, according to the National Partnership for Healthcare and Hospice Innovation (NPHI).

NPHI is a membership organization comprising more than 100 nonprofit, community-integrated hospice and palliative care providers from 38 states and the District of Columbia.

The organization recently submitted comments in response to a Request for Information from the U.S. Department of Justice (DOJ), Department of Health and Human Services (HHS) and the Federal Trade Commission (FTC).


“We wish to emphasize that it is not NPHI’s position to oppose all PE associated activity in the hospice market,” the organization indicated in its comments. “However, we believe further scrutiny of the performance of PE associated activity is warranted to ensure that all Medicare beneficiaries receive the quality of hospice care to which they are entitled. The research cited above suggests that may not always be the case.”

In 2022, 5,899 hospices provided care to Medicare beneficiaries, up 10% year-over-year, according to the Medicare Payment Advisory Commission (MedPAC). Of those, about 77% were for-profit entities, which provided care to about half of Medicare hospice decedents that year. MedPAC did not indicate how many of those for-profits were owned by private equity firms in particular.

For-profit providers earn an average profit margin of 19.2% compared to 6% for nonprofits, according to NPHI.


NHPO also recently submitted comments to the U.S. Centers for Medicare & Medicaid Services (CMS) on its 2025 proposed hospice payment rule, stating that the agency’s anticipated 2.6% rate increase was insufficient in light of inflation, rising supply and labor costs, among other headwinds.

The organization also urged CMS to reform its process for adjusting payment rates using the wage index, arguing that current methods do not accurately reflect the costs that hospices face.

“Medicare per diem payment amounts to hospices are adjusted annually using a wage index to reflect changes in the cost of labor. CMS bases the wage index for each geographic area on the change in the cost of labor for area hospitals relative to the change for all hospitals  nationally, as described in the proposed rule,” NPHI indicated. “For several reasons, the resulting annual payment adjustments for hospices often do not reflect the reality of the labor cost increases that hospice  providers experience.”

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