So here are some more thoughts ... specifically on what may be considered the elephants in the room of this whole situation.
Elephant #1 - The entire hospice industry is paying for the sins of a few
I have done my fair share of railing against CMS in this whole Part D matter but lets step back for a moment. The hospice industry is not a hapless victim here. CMS and the OIG have the right to implement oversight mechanisms to protect the Medicare Trust Fund from inappropriate Part D payments for drugs that are the hospice's responsibility. More importantly, the OIG and CMS conducted extensive studies that clearly indicate their concerns regarding duplicate payments are justified. Consider the following:
- In the June 2012 report on Part D and hospices, the OIG identified nearly 200,000 hospice beneficiaries who received nearly 700,000 prescription drugs through Medicare Part D that potentially should have been covered under the hospice per diem. Part D paid over $33 million dollars for these drugs and hospice beneficiaries paid nearly $4 million in copayments.
- CMS' subsequent reviews by its payment reform contractor, Abt Associates, found that in 2010 there were 750,590 hospice beneficiaries enrolled in Medicare Part D. Of those beneficiaries, 14.9% received 332,988 analgesics (medications that CMS believes should almost always be related to a patient's terminal illness or related conditions) through Part D totaling nearly $13 million.
Those findings are not insignificant and the dollar amounts involved are not chump change. Of great significance as well is the Abt Associates finding that the majority of the analgesic billing was concentrated among certain types of hospices. Ten percent (350) of hospices accounted for 51% of these claims - and these providers were typically for profit, new, and/or rural.
Although NHPCO requested that CMS consider a targeted review of just those hospices identified, it is likely that ship has sailed and now the entire industry must deal with the consequences.
Elephant # 2 - Maybe if hospices were paid more realistically there would be less incentive to "game the system."
It is probably not a good idea to go here but nevertheless... We all know hospices are dealing with significant reimbursement cuts and that the Medicare Hospice Benefit and payment structure has not changed significantly since 1983. Think of how the world has changed since 1983? I got my first computer in 1985! It is an amazingly different world, yet hospices are paid a per diem rate for routine home care that would barely cover a dinner for two at a nice restaurant or barely two tanks of gas (depending on your car). Yet that per diem rate must cover "virtually all" (to coin a 1983 CMS phrase) drugs, biologicals,medical supplies, DME, visits from hospice staff, on-call coverage 24/7, etc, etc related to the patient's terminal illness and related conditions. Yes, in an ideal world where longer length of stay patients balance out the short length of stay patients, all would be well. But let's face it, it does not always work that way.
It is hard to miss elephants but have I missed any? Let me know in the comments section below.
Posted by Heather P Wilson, PhD, CEO, Weatherbee Resources, Inc