Payment Change Discussion in Caring Article

The National Association for Home Care and Hospice puts out a very good magazine called Caring. As far as I can tell, it is not available on-line which is too bad, because the November edition had a great article titled "The Future of Hospice". The article was written by Tom Hoyer who worked for Medicare for thirty years and was "assigned to work on implementing the Medicare hospice benefit and was responsible for producing the regulations that have governed the benefit." He also "continued to maintain responsibility for hospice benefit policy…until his retirement." I guess that makes him very qualified to discuss the future of the Medicare hospice benefit from the Medicare prospective, which is what he does in the article. I really wish the full text was available online.

This is the first post in a series where I look at the many points made in the article. Much of what is written are topics I have written about in the past, but, for obvious reasons, seem much more real when Mr. Hoyer writes about them. The article is broken into two sections. The first discusses improvements that can be made to the Medicare hospice benefit. The second discusses changes in the "product" or changes in the core definition of hospice. This post deals with a portion of the section on improvements that can be made to the Medicare hospice benefit.

Payment Changes

This subject is one that I have discussed many times in many different ways. I believe that there is going to be a major change in how hospices get paid. I also believe that these changes are probably necessary. Mr. Hoyer seems to agree, but has some insight and details on how and when these changes will appear that I have not heard anyone say out loud before.

First, Mr. Hoyer points out that MedPAC and the GAO have been looking at this subject and have both concluded that, while the government is probably spending enough money on hospice, they are probably not spending it well. As he says, "They [MedPAC and GAO] believe the rates need to be reexamined with a view towards updating the components to reflect current medical practice, and to do a better job of matching individual payments to individual patients (case-mixed payment)." This means creating a system where a hospice is paid more for high need patients and less for low need patients. I have discussed here many times that there is a difference in the amount of care provided to home patients (higher need) as apposed to nursing home patients (lower need). There is also a difference in the amount of care (or cost of care) a dementia patient requires (low need) as opposed to an HIV/AIDS patient (high need). This new system would take those factors (and probably more) into account when determining how much a hospice is paid for each patient.

Mr. Hoyer's proof that this change is coming is the fact that the MedPAC and GAO reports called for data gathering to determine how to set up this new system. That data will start being gathered on January 1st from hospices who have voluntarily implemented the new billing system that becomes mandatory for all hospices later in 2008. Once enough data has been gathered, Medicare can start using the data to create a new payment system. The question is, why would they gather the data unless they planned to do something with it? The answer, they wouldn't. The good news for those, like me, who have been living in a bit of fear that the sky could fall on us at any moment, is that Mr. Hoyer says that this process is going to take some time. On that he says, "it is a safe assumption that payment reform would not likely occur until at least 2010, unless the Congress or the Administration make it a very high priority."

With this in mind, Mr. Hoyer's advice is for hospices to spend the next couple of years making sure that their operations will be financially sound in a case-mixed system. His hope is that the case-mixed system will stop the "gaming" being done by hospices that focus on recruiting low intensity patients to make profits.

"Gaming" becomes a big subject in the rest of section one. I'll talk about that more in the next post.

Merry Christmas

Luke 2

1In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world. 2(This was the first census that took place while Quirinius was governor of Syria.) 3And everyone went to his own town to register.

4So Joseph also went up from the town of Nazareth in Galilee to Judea, to Bethlehem the town of David, because he belonged to the house and line of David. 5He went there to register with Mary, who was pledged to be married to him and was expecting a child. 6While they were there, the time came for the baby to be born, 7and she gave birth to her firstborn, a son. She wrapped him in cloths and placed him in a manger, because there was no room for them in the inn.

8And there were shepherds living out in the fields nearby, keeping watch over their flocks at night. 9An angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were terrified. 10But the angel said to them, "Do not be afraid. I bring you good news of great joy that will be for all the people. 11Today in the town of David a Savior has been born to you; he is Christ[a] the Lord. 12This will be a sign to you: You will find a baby wrapped in cloths and lying in a manger."

13Suddenly a great company of the heavenly host appeared with the angel, praising God and saying,
14"Glory to God in the highest, and on earth peace to men on whom his favor rests."

15When the angels had left them and gone into heaven, the shepherds said to one another, "Let's go to Bethlehem and see this thing that has happened, which the Lord has told us about."
16So they hurried off and found Mary and Joseph, and the baby, who was lying in the manger. 17When they had seen him, they spread the word concerning what had been told them about this child, 18and all who heard it were amazed at what the shepherds said to them. 19But Mary treasured up all these things and pondered them in her heart. 20The shepherds returned, glorifying and praising God for all the things they had heard and seen, which were just as they had been told.



New International Version
Copyright © 1973, 1978, 1984 by International Bible Society

Office of Inspector General Hospice/Nursing Home Report

The OIG released the first of two reports today looking at the differences between hospice care provided in nursing homes and hospice care provided somewhere else. (Thanks to NHPCO for pointing this report out to its members.)

The basic conclusion reads:

In our comparison of Medicare hospice beneficiaries who reside in nursing facilities to hospice beneficiaries who reside in other settings, we found that beneficiaries in nursing facilities tended to be older and more likely to have ill-defined conditions. Also, their time in care was longer and more costly. A second study will assess the appropriateness of payments for hospice care for beneficiaries in nursing facilities.

I hope "appropriateness of payments for hospice care" means they will assess the differences between the care provided to a home patient and a nursing home patient. If that is the case, I think the second report could change the hospice world. I have long said that, in general, nursing home patients are easier (cheaper) to care for than home patients. I have also advocated for a payment system that reflects this. In a game of follow the money, all you have to do is look to see how many of the large nursing home chains have started their own hospices to care for their patients. This is because nursing home patients take less effort and are therefore more profitable. We'll have to wait and see if this is really what the study is all about, but I sure hope it is.

NHPCO has also promised some reaction to part one of the study tomorrow. I'll post anything interesting when I can. My schedule will be a bit hectic with the holidays.

But the doctor certified them...

I really wanted to get off the subject of the Medicare Hospice Cap today, but I couldn't. There is one cap argument that I hear quite a bit that, while sounding fair and logical, fails to actually work. The argument in question is what I will term the "But the doctor certified them" argument.

As I said, this argument seems to make all the sense in the world, but I want to give two reason that it doesn't really hold up to scrutiny. Here's how it goes. Those fighting against the cap argue that every patient they have ever had on service was certified by their attending physician to meet the Medicare criteria of a six month life expectancy given normal disease progression. Who is the hospice to question the patient's attending physician? Seriously, where does the hospice nurse get the power to tell the doctor that the nurse's one time evaluation of the patient is more accurate than the opinion of the doctor who has been seeing the patient for years? If a patient's doctor believes that the patient meets the medical criteria for hospice, why would a hospice argue?

That's the "But the doctor certified them" argument, and it makes all the sense in the world. If a doctor certifies hospice appropriateness, then we shouldn't question them. Right? Wrong. Let me give you two reasons that it doesn't always work.

First, doctors are often too nice.

I know that the hospice community usually complains that doctors don't want to tell patients bad news and therefore wait too long to make a hospice referral. While that is often the case, there is a less frequent and less discussed flip side of that coin. This issue, which hospices don't complain about, is that often doctors will make hospice referrals because they know that hospice can help the patient. This referral usually comes after the family has brought the patient to the doctors office and told the doctor how hard it is to care for the patient. It is a long heartbreaking story from a tired and stressed family. The doctor vows to find them some help. Hospice is the help they find.

Many hospices have been paying marketing staff quite a bit of money to go convince doctors of the reality that there is nothing better than hospice care. If you have a patient living at home, hospice is the best care Medicare can provide for them. Some doctors have been listening to the marketers, so when they meet a hard case, they hand it over to hospice. Unfortunately, the doctor is thinking much more about the care that the patient needs than the patient's prognosis. They sign the hospice papers to get them care without really thinking about what they are signing. They are doing what they can to help a family. It is a noble thing to do, but it is still a patient who isn't actually appropriate for hospice.

Second, doctors get paid by hospices.

First, I'm not saying that something illegal is going on. This isn't some nefarious under the table bribe we're talking about here. Medicare requires every hospice to have at least one Medical Director. Everything I'm talking about here is done in the daylight, but it doesn't make it right.

Hospices hire Medical Directors to do the things they need a doctor to do. Many of them also hire Medical Directors with the hope that those Medical Directors will refer their patients to the hospice. This is clearly an area where the line between good and evil is gray at best. I know from what I would consider a reliable source that one hospice pays one of their Medical Directors $4,000 a month for the one meeting that he attends. That's $4,000 an hour. Do you think they expect "loyalty" from their medical director? No doubt! Do you think the Medical Director feels pressure to give enough patient to keep this gravy train coming? Probably. Could this lead the Medical Director to refer a few of his patients that he wouldn't otherwise refer? Possibly. (The Office of the Inspector General has noted these types of issues and, in theory, is going to be cracking down on it.)

Even if you follow the OIG's advice and pay a reasonable rate for the amount of work the Medical Director does, there is still a decent chance that the Medical Director is going to help you out. "Oh, Dr. Smith, census sure is down. If we don't get some patient's we may have to cut back." Could that line encourage Dr. Smith to certify someone that is just a bit on the gray line? No doubt.

Again, I'm not saying that hospices shouldn't have Medical Directors. They are an essential part of the hospice team. The fact that many hospices have one Medical Director for each team meeting they have (ie. a small hospice has team meeting weekly, so they have four Medical Directors that come once a month.) probably indicates that there is a benefit to having doctors on your payroll.

Conclusion

These are two examples of why doctor certification isn't always to be trusted. Is this the core of the cap problem? Not even close! My point here is that the argument that we should be trusting doctors to make certification decisions without any oversight or system abuse indicators just doesn't hold water. The patient's attending physician is, in my mind, the only logical person to certify hospice appropriateness, but that doesn't mean the system is perfect. Oversight is still necessary, and that was the point of the hospice cap from day one.