Hospices with strong quality metrics and low care delivery costs could have a fighting chance of withstanding regulatory and operational headwinds on the horizon. While some hospices are turning to palliative care for improved patient reach and outcomes, others are branching into value-based agreements.
These trends were outlined in recent analysis on the home health and hospice industries from the law firm Holland & Knight LLP.
Hospices’ most significant challenge is that demand for their services is outpacing professional growth, according to Jennifer Rangel, partner at Holland & Knight. Providers are seeking diverse avenues to expand and support their clinical workforces, including stepping outside of traditional fee-for-service reimbursement, Rangel said.
“[Hospice] demand is growing because of an aging population, more chronic diseases and rising Medicare Advantage enrollment,” Rangel told Hospice News in an email. “In addition, more than 51% of Medicare deaths now occur on hospice. As a result, hospice providers increasingly need to show total cost-of-care value to Medicare Advantage plans. Participation in value-based care initiatives is becoming the norm.”
Significant regulatory, reimbursement and operational challenges are reshaping the home health and hospice market, according to Holland & Knight’s recently published Healthcare Trend Report. The report examined how merger and acquisition activity, regulatory developments and litigation trends have impacted the hospice and home health legal and business landscapes.
The report’s key hospice and palliative care findings include:
— Growing aging populations are increasing demand for hospice, with other factors including greater prevalence of chronic diseases among seniors and rising enrollment in Medicare Advantage programs.
— More than 51% of Medicare decedents received hospice care prior to death. The trend is driving a need for more hospice providers to demonstrate overall cost-of-care savings to Medicare Advantage payers.
— More states are building separate rules for palliative care delivery, including payment avenues through Medicaid reimbursement. Additionally, federal Medicare payment models are considering different types of palliative care methodologies. A significant factor driving these payment trends is that, unlike hospice, palliative care can often be provided alongside curative treatments.
–The development of palliative care separate from hospice is an additional trend. Certain cost- and quality-related “lessons are learned” when palliative care is provided to hospice patients with a focus on chronic illness management as opposed to just their terminal condition, Rangel said.
— Value-based and risk-based care providers are increasingly focused on working with hospice providers that demonstrate improved quality and cost outcomes. Hospices are treating technology and artificial intelligence (AI) tools as “operational necessities” to prove their quality, particularly amid rising demand and staff shortages, Rangel stated.
Regulatory influences
Hospices have seen more regulatory obstacles in the past year, according to the Holland & Knight report. Among the most significant challenges came with the implementation of the U.S. Centers for Medicare & Medicaid Services’ (CMS) national moratoria on new home health and hospice provider enrollment in Medicare. The six-month temporary moratoria are set to expire Nov. 13.
An additional regulatory strain for hospices is the increased levels of auditing activity and enforcement, the report found. Regulatory agencies are employing more technology tools to identify fraud, waste and abuse, according to Rangel. Medicare auditors are focused on triggers such as long lengths of hospice stays, making documentation of eligibility and recertifications “critical,” she said.
Additionally, CMS uses real-time data analytics alongside in-person mandatory site visits in enrollment revocation cases, Rangel stated. Hospices can be barred from Medicare re-enrollment even in “minor technical lapses” for up to three years, she said.
Hospices nationwide are seeing increased audits, payment suspensions, as well as more post-payment “claw backs” and regulatory requests for extrapolated overpayment details, according to Rangel. These issues can create “significant financial exposure” and “threaten survival” for legitimate providers, she added.
Hospices could see lasting impacts from the current auditing climate and the temporary moratoria, Rangel indicated. Hospices’ growth and sustainability are challenged as providers respond and adapt to the regulatory pressures, she said.
“The biggest regulatory challenge facing hospices today is Medicare integrity scrutiny, including the current moratorium on hospices, which is restricting organic growth and driving acquisitions of existing hospices as the sole growth option during the moratorium,” Rangel told Hospice News. “The key point for legitimate providers is that the government’s ‘wide net’ catches compliant companies too. It is vital to implement and maintain a strong compliance program, continuously train staff on compliance related matters as they arise and focus on maintaining strong documentation to support the services being provided.”
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