Feb. 25—For-profit hospices were much more likely to exceed Medicare payment caps, according to a recent survey of 591 hospices, and they did so at a much higher rate than previously found.

Twenty-two percent of for-profit hospices exceeded Medicare’s annual aggregate cap on payments, according to survey results from 2008 to 2009 reported online this week in JAMA Internal Medicine. Only 4 percent of not-for-profit hospices exceeded the Medicare cap, which was designed to ensure that Medicare payments do not exceed the cost of conventional care for patients at the end of life. 

The provision requires hospices to repay Medicare the difference if their total Medicare payments exceed the total number of Medicare beneficiaries served multiplied by an annual cap amount.

The rate of for-profit hospices exceeding the cap was far higher than a 2010 Medicare Payment Advisory Committee (MedPAC) calculation, which estimated that 10 percent of hospices surpassed the cap.  Although MedPAC similarly concluded that for-profit hospices were more likely to exceed the cap.

The authors of the JAMA study said the cap appears to successfully discourage an inappropriate hospice focus on obtaining long-term patients. However, the authors urged additional regulatory measures, such as public reporting of hospice disenrollment rates.

Other Findings

The study found for-profit hospices had a 10 percent disenrollment rate, compared to a 6 percent disenrollment rate for not-for-profit hospices.

The biggest difference between the two hospice categories in the recently published survey was the rate at which they exceeded the Medicare payment cap. 

Other survey findings included a lower likelihood that for-profit hospices, compared to not-for-profit hospices, provided community benefits including serving as training sites (55 percent versus 82 percent) or conducted research (18 percent versus 23 percent).

Publication Date: Tuesday, February 25, 2014