OIG Examines Hospice Services for Nursing Facility Residents

A new report from the Office of Inspector General has found that Medicare spending on hospice care for nursing facility residents has grown nearly 70 percent since 2005.  Many hospices had a high percentage of their beneficiaries residing in nursing facilities, and most of these hospices were for-profit. Compared to hospices nationwide, these high-percentage hospices:

• received more Medicare payments
• had a longer average length of stay
• served Medic are patients whose diagnoses required less complex care
• served more patients who already lived in nursing facilities before they elected hospice care.

A previous OIG study published in September, 2009, concluded that Eighty-two percent of hospice claims for beneficiaries residing in nursing facilities did not meet Medicare coverage requirements.

The OIG report notes that Medicare currently pays hospices the same rate for care provided in nursing facilities as it does for care provided in the home, but nursing facilities are staffed with professional caregivers and are often paid by third party payers, such as Medicaid. These facilities are required to provide personal care services, which are similar to hospice aide services that are paid for under the hospice benefit.

The OIG concluded that some hospices may be seeking beneficiaries with particular characteristics, including those with conditions associated with longer but less complex care. Such beneficiaries are often found in nursing facilities. By serving these beneficiaries for longer periods, the hospices receive more Medicare payments, which can contribute to larger profits.

The OIG report recommends that CMS (1) monitor hospices that depend heavily on nursing facility residents and (2) modify the payment system for hospice care in nursing facilities. CMS concurred with both of our recommendations. It also agreed that the current payment structure may provide incentives for hospices to seek out beneficiaries in nursing facilities, who often receive longer but less complex care

The OIG website has a special page devoted to Medicare hospice issues.  The page includes links to the new report, a podcast interview with Jodi Nudelman, the Region II Inspector General for Evaluation and Inspections, and several other OIG studies of hospice issues.  This is the first in a series of three studies by the OIG of hospice services to nursing facility residents.  Additional studies will examine the marketing practices of hospices that focus on nursing home residents and the business relationships of such hospices with nursing facilities.

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