April 30, 2008 09:38 ET

NHPCO Responds to Medicare's Proposal That Will Cut Hospice Rates

ALEXANDRIA, VA--(Marketwire - April 30, 2008) - The Centers for Medicare and Medicaid Services has released a proposed rule that would significantly impact hospice reimbursement in a devastating way. By phasing out the annual adjustment that is applied to the hospice wage index over the next three fiscal years, CMS will be cutting the reimbursement levels hospices receive for the care they provide to terminally ill patients and their family caregivers.

The National Hospice and Palliative Care Organization, the nation's oldest and largest non-profit organization representing hospice and palliative care programs and professionals, strongly opposes this proposed rule.

"Regardless of how the administration chooses to characterize or couch this action in technical terms, it is a rate cut," said J. Donald Schumacher, NHPCO president and CEO. "Through this proposed rule, the administration is circumventing Congress to save money in a manner that may ultimately jeopardize the services provided by hospices to dying patients and their families."

Unlike most other healthcare providers, hospices are uniquely strained by the rising costs of gas, supplies and pharmaceuticals because they provide medical equipment, supplies and medications related to the patient's terminal illness.

"Given that 80 percent of care is delivered in the home, hospice professionals must drive to reach those they serve and are subjected to inflationary pressures with every visit to the gas pump," remarked Schumacher. "This is but one example of the increased costs that this rule would ignore."

In recent years, regulators have been looking closely at hospice reimbursement levels and have expressed concern over the growth in hospice expenditures -- which are $11 billion per year. This follows two previous CMS administrators who voiced support for increased hospice usage to the broader healthcare community, encouraging more timely referrals and explaining that hospice is a key component of healthcare in this country and a valued benefit offered by Medicare. The growth in hospice spending is directly tied to the growing preference for hospice care by Americans coping with a life-limiting illness.

More than 1.3 million dying Americans received care from the nation's hospice providers last year. This number has risen and continues to grow as more patients learn of the wide range of beneficial services and the compassionate care that hospice offers.

Considered to be the model for high-quality care at the end of life, hospice involves a team-oriented approach to care that includes expert medical attention, pain-and-symptom management, and emotional and spiritual support. The quality of a person's life is emphasized, not the duration. Moreover, services and support are provided to family caregivers, in addition to the patient.

The economic value of hospice care has been validated by research. An independent study released late last year by Duke University found that the use of hospice saved Medicare an average of $2,300 per patient who received this care. Additionally, a recent MedPAC report noted profit margins in the hospice community are running under 3.5 percent.

"Patient satisfaction data collected by NHPCO shows the 98.5 percent of families would recommend hospice to others, reflecting the high level of family satisfaction with care. Coupled with the fact that hospice can be cost effective to Medicare, it seems illogical to put rules in place that would cut down on the care hospice providers could offer," Schumacher noted.

The result of this proposed rule would potentially mean less care to patients and family caregivers during the end of life.

"NHPCO and its affiliate, The Alliance for Care at the End of Life, recently supported bipartisan, bicameral letters from 87 Members of Congress sent to Secretary Leavitt in opposition to the proposed rule and subsequent rate cuts to hospice care. The rule release merely marks the beginning of an arduous regulatory process -- one that we will engage in to the very end to ensure that this valuable benefit to the dying is not sacrificed to short-sighted cost cutting whims," concluded Schumacher.

NHPCO is the oldest and largest nonprofit membership organization representing hospice and palliative care programs and professionals in the United States. NHPCO's mission is to lead and mobilize social change for improved care at the end of life.

Contact Information

  • Contact:
    Jon Radulovic
    NHPCO Vice President, Communications
    Email Contact