The Hospice CARE Act’s Potential to ‘Dramatically Reshape’ End-of-Life Care Delivery

Hospice providers and stakeholders are carefully examining the proposed changes included in the recently introduced Hospice Care Accountability, Reform, and Enforcement (Hospice CARE) Act as the bill begins its journey through the legislative process.

Leading concerns in the industry include the bill’s suggested regulatory reforms to address program integrity in the hospice industry, along with potential changes to reimbursement, caregiver support and palliative care payment pathways.

The Hospice CARE Act has a “long road ahead” before enactment, but its introduction presents both significant challenges and opportunities for hospice providers, said Ethan McChesney, policy director at the National Partnership for Healthcare and Hospice Innovation (NPHI).

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“The payment provisions alone would dramatically reshape a reimbursement model that providers have relied on for decades with minimal change,” McChesney told Hospice News in an email.

Transforming hospice policy

The Medicare Hospice Benefit has remained largely unchanged since its establishment in 1983. The benefit was designed to help providers offering palliative services and other support to terminally ill patients and their families.

Recent years have brought mounting financial and operational pressures for providers, who have seen demand rise alongside swelling aging populations. Nearly half (49.1%) of all Medicare descendants utilized hospice services in 2022, which was a similar rate to prior years, reported the National Alliance for Care at Home.

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Rep. Earl Blumenauer (D-Oregon) introduced the Hospice CARE Act last month. The Congress member first announced the bill at the Hospice News Elevate conference in Washington, D.C. this summer. The bill includes an overhaul of the per-diem payment system, along with a slew of other regulatory updates and changes to the benefit.

Making changes to a longstanding benefit could help support a wider range of future patient needs, according to Mollie Gurian, vice president of policy and government affairs at LeadingAge.

“It takes courage to propose this type of overhaul to a longstanding benefit,” Gurian emailed Hospice News. “Done right, changes will expand the benefit to support the realities of modern-day hospice care, address vulnerabilities that are currently being exploited and help ensure quality to support strong funding.”

Revamping program integrity

The Hospice CARE Act includes a proposed temporary, national moratorium prohibiting the enrollment of new hospices. The bill’s discussion draft language included a five-year moratorium period that would begin on the date of the legislation’s enactment, if approved. The moratorium would be intended to help curb fraudulent activity occurring among newly established providers, particularly in four hotbed states of Arizona, California, Nevada and Texas.

The version of the bill that was introduced provided greater specification around possible exceptions that could be granted to new providers during the moratorium. The bill’s language stipulates allowing regulatory authorities to consider granting exceptions for new programs in regards to specific geographic areas and current availability of hospice care.

For example, a temporary lift of the moratorium could be possible in certain geographic areas of a state for new programs that can demonstrate an unmet need in that region. This could include evidence of long wait times for care or proof that existing hospices provide substandard quality of care. New enrollees must also provide plans to address identified service gaps in an area.

The legislation’s proposed moratorium is a “pretty blunt tool” that could allow regulators to better target program integrity on a more permanent basis, according to Gurian. The provisional period of enhanced oversight is just one of several quality improvement measures that the Hospice CARE Act proposes.

If enacted as written, the bill would mandate the establishment of a technical expert panel (TEP) on the moratorium by the Secretary of Health and Human Services, something the draft discussion version did not include. The TEP would establish standards for identifying a hospice program with a history of “aberrant billing patterns.” The panel would also develop standards for enforcement actions, including analyzing data from prepayment medical reviews.

A TEP would create more opportunities for discussion between stakeholders and the U.S. Centers for Medicare & Medicaid Services (CMS) prior to implementation, according to Gurian.

Also, if enacted, a TEP would be convened after the moratorium ends to review aberrant billing patterns to better identify bad actors in the space. This would be an important change in how future payment or oversight policies are formed, Gurian added.

Establishing the TEP could potentially ease pressures for hospice providers as they contend with heightened auditing activity. More than half (52.9%) of hospices nationwide have reported undergoing multiple audits simultaneously in the last year, according to a report from LeadingAge, the National Alliance for Care at Home and the National Partnership for Healthcare and Hospice Innovation (NPHI).

“We want to balance the need for more oversight (given the documented fraudulent activity) with the need to not over or unfairly burden our nonprofit and mission driven providers. This is a hard balance to strike,” Gurian said. “Some provisions, including those focused on auditor education and the addition of the TEP on aberrant billing patterns, recognize that CMS should partner with us to ensure that the program integrity efforts are appropriately targeted. This is very important because we have concerns about how audits are carried out today and want to make sure that the efforts proposed here are going after the truly aberrant behavior.”

Rebuilding the payment system

The Hospice CARE Act included potential changes to the hospice per diem payment structure. The bill proposed a reduction in hospice daily rates and the addition of a per-visit payment for clinical services to ensure that hospices are delivering appropriate care to patients. The introduced bill also proposed to prohibit payment for hospice providers who fail to meet quality data reporting requirements, potentially withholding reimbursement for subsequent fiscal years.

The proposed payment reforms were less focused on cost-saving potential and more so on how to better allocate existing hospice dollars, according to Gurian. Some of the legislation’s proposed changes are designed to move existing dollars within the hospice benefit to ensure that monies are being used to provide the most effective, high quality care, she noted.

The payment changes, if enacted, could give hospices a stronger ability to support patients’ families and caregivers, Gurian said. Other changes in the bill’s language could revamp the ways that hospices provide respite care, including the allowable lengths of stay within that level of care.

“The bill targets areas where more money may need to be spent, such as in providing expanded caregiver support and or to cover specified hospice services, while recouping funds from areas in which funds are not being spent well,” she told Hospice News. “Beneficiaries and their families need more support, whether at home or the ability to have longer inpatient hospice stay. These expansions will be a boon to patients and families and give hospices the opportunity to offer this support in a way that is more sustainable.”

The Hospice CARE Act’s other proposed payment changes included adjustments to routine home care provided during the fiscal year 2029 and subsequent years. The bill’s language specified that these services should be paid at per diem rates that reflect costs outside of the scope of direct patient care such as administrative expenses, among others. Routine home care reimbursement rates should include a “case mix adjustment” process to account for variations in service types and patient visit durations, the language stipulated.

The legislation also addresses payment for high-acuity palliative services within the hospice benefit. The bill outlines ways to create payment streams for “specified hospice services” that include palliative chemotherapy, blood transfusions, dialysis and radiation therapy. But the proposed changes come with limitations, such as restricting the amount of these services patients can receive, as well as the duration.

Providers have raised questions around the designation of those four services when other high-acuity treatments also may be necessary, according to Gurian.

The language proposes to pay for palliative radiation, chemotherapy, dialysis and blood transfusions for a five-year period. This time frame is intended to help CMS develop a payment mechanism that, when deployed, would allow hospices to use that outlier mechanism to pay for other types of therapies, said Gurian.

The high costs associated with these palliative therapies represent a large deterrent to expanded utilization, she said. Expanded reimbursement could lead to increased awareness, utilization and longer stays, Gurian stated.

“This expansion is not meant to cover therapies aimed at curing the disease — but that line has gotten fuzzier as medicine has evolved,” Gurian said. “This payment mechanism should open the door for more and more people to go on hospice while still being able to access targeted therapies that make them feel better. And hopefully that will get more people onto hospice, help them feel better while on hospice and keep them on hospice.”

Proposed payment reforms in the legislation have groundbreaking potential for providers, but new policies must come with careful consideration around the wide range of potential impacts to sustainable access, McChesney stated.

An important factor to consider is how value-based payment could impact hospice reimbursement, he stated.
“Given the ongoing program integrity challenges and the rapid shift toward value-based care across health care, payment reform of this nature is welcome but must be carefully considered to prevent unintended consequences that could impact high-quality, well-meaning providers,” McChesney said.

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