Access to hospice care. James E. Mathews November 8, 2007

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1 Access to hospice care James E. Mathews November 8, 2007

2 Content of this presentation Review of data on hospice utilization / payments Access to hospice care Incentives for long lengths of stay Additional policy considerations 2

3 Hospices reaching the aggregate perbeneficiary payment cap, CAP YEAR Number of hospices 2,286 2,401 2,580 2,809 Number of hospices subject to cap Percent of all hospices 2.6% 4.1% 5.8% 7.8% Payments over the cap subject to recovery (in millions) $28 $65 $112 $166 Total FY spending (in millions) $4,517 $5,682 $6,897 $8,155 Cap excess payments as % of total spending 0.6% 1.2% 1.6% 2.0% Source: MedPAC analysis of 100% Hospice Standard Analytical File (claims) data, , and PDQ data, , from CMS. 3

4 Characteristics of Cap vs. Other hospices, 2002 and 2005 Cap hospices: Are more likely to be proprietary Are more likely to be free-standing (rather than provider-based) Have smaller patient loads (137 vs. 282 in 2005) Have much longer lengths of stay (139 vs. 68 days (free-standing) in 2005) Source: MedPAC analysis of Medicare hospice cost reports and 100% hospice claims standard analytical files (SAF) from CMS. 4

5 Cap hospices have more days per patient than non-cap hospices, 2005 Hospice cap status Number of patients Median days per patient Mean days per patient Percent of patients > 180 days Non-cap hospices 713, Cap hospices 21, Source: MedPAC analysis of 100% hospice claims 2005 standard analytical file (SAF) from CMS. Data reflect hospice patients for whom a length of stay could be calculated for

6 Cap hospices have different patient mix, but longer length of stay for all patients Cases Length of Stay Disease category Share of cases, cap hospices (percent) Share of cases, noncap hospices (percent) Percent difference ALOS, cap (days) ALOS, noncap (days) Percent difference Alzheim er's and sim ilar disease % % Nervous system, except Alzehim er's % % Organic Psychoses % % Dem entia % % Chronic airw ay obstruction, NOS % % Unspecific sym ptom s / signs % % Debility, NOS % % Heart Failure % % Circulatory, except heart failure % % Cancer (except lung cancer) % % Other % % Lung Cancer % % Respiratory diseases % % Digestive diseases % % Genitourinary diseases % % % Source: MedPAC analysis of % hospice claims standard analytical file (SAF) from CMS. 6

7 Hospice utilization and spending grew rapidly between Beneficiaries (thousands) Spending (billions) $9 $ $ $6 $5 $4 $ Year $2 $1 $ Year Source: Centers for Medicare and Medicaid Services. Note: 2006 utilization data is calendar year, all others are fiscal year. 7

8 All beneficiary groups showed increases in rate of hospice utilization, Examined hospice utilization rates by: Age Sex Race / ethnicity Medicare eligibility Medicare insurance type All groups increased from

9 Hospice utilization rate higher for MA, but higher growth in FFS, % 40% 35% 30% 25% 20% 15% 10% 5% 0% Total FFS MA Source: MedPAC analysis of 100% Hospice MDB extract from CMS. 9

10 Most hospice growth due to for-profit providers, ,600 1,400 1,200 1, Non-profit Proprietary Gov't / Other Source: CMS PDQ system, October

11 Number of new Medicare-participating hospices exceeds voluntary closures, New entrants Voluntary closures Source: CMS PDQ system, October

12 States with most hospices per capita have highest hospice cap rate, 2005 Number of hospices (2005) Percent change, Hospices per 10,000 beneficiaries Percent of hospices reaching cap in 05 State Oklahoma % % Utah % % Mississippi % % Alabama % % Arizona 50 35% % Nevada 11 83% 0.4 0% Maryland 21 0% 0.3 0% District Of Columbia 2-33% 0.3 0% Rhode Island 4 33% 0.3 0% New York 51-6% 0.2 0% Source: CMS PDQ system (October 18, 2007), MedPAC analysis of 2005 hospice claims standard analytical file (SAF), and Medicare enrollment data from CMS. 12

13 Illustration of incentives for longer LOS Parameters First / last day cost: $175 Interim day costs: $125 Payment per day: $140 Estimated margins 10 days: 3.6% 45 days: 9.1% 90 days: 9.9% 150 days: 10.2% 13

14 Implications of cap and LOS for Medicare beneficiaries access to hospice care Does increase in Medicare hospice LOS mean: That hospice population better mirrors decedent population? Or, That current hospice population represents a benefit expansion? Expansion to include non-traditional patients (increased access) Expansion to include longer length of stay (not necessarily increased access) 14

15 Issues for further investigation Hospice finances (payments and costs) Longer-term reforms to the hospice payment system Eligibility for hospice Incentives in the current per-diem system Case mix issues Hospice benefit carved out of managed care 15