We have written about Medicare hospice care several times in the past. John Goodman wrote about a new Medicare pilot program where the same health plans that manage seniors’ medical care will also manage their hospice benefits near end-of-life. I wrote about how Medicare hospice care is growing by leaps and bounds, which is attracting scammers who enroll ineligible patients (not likely to die in six months) and gouge taxpayers for care that is inappropriate.
The New York Times published an article on the difference in hospice care provided by nonprofit versus for-profit organizations. Purportedly, nonprofit organizations are a better value.
But numerous studies have documented that as a group, nonprofits provide better care. All hospices within a geographic area receive the same daily payment per Medicare beneficiary, but patients enrolled in nonprofits receive more visits from nurses, social workers and therapists, according to a 2019 study by the consulting firm Milliman.
For-profits are more likely to discharge patients before they die, a particularly distressing experience for families. “It violates the implicit contract hospice makes, to care for patients through the end of life,” Dr. Atkins said.
Dr. Joan Teno, a Brown University health policy researcher, and her team reported in 2015 on these “burdensome transitions,” in which patients were discharged, hospitalized and then readmitted to hospice.
That happened to 12 percent of patients in for-profits affiliated with national chains, and to 18 percent of patients enrolled in for-profits that weren’t chain-affiliated — but to only 1.4 percent of patients in nonprofit hospices.
Perhaps the solution is to require hospice organizations to continue treating hospice patients who outlived their six-month time limit. That could lessen the incentive to enroll ineligible patients. Or Medicare could track which firms routinely have to discharge hospice patients because they were enrolled prematurely and penalize bad behavior.
Various studies have looked at hospice organizations and the care they provide.
Dr. Teno’s latest study, undertaken with RAND Corporation… ranked about 31 percent of for-profit hospices as “low performers,” scoring well below the national average, compared with 12.5 percent of nonprofits.
More than a third of nonprofits, but only 22 percent of for-profits, were “high performers.” In 2019, the Department of Health and Human Services’ inspector general’s office also reported that most hospices it identified as low-performing were for-profits.
Officials point out it’s not merely a case of avoiding for-profit hospice care for nonprofit hospice organizations. There are good and bad actors of both types.
“It’s not as simple as avoiding all for-profits,” Dr. Teno said. “Because of the variations, you have to really look at the data.”
For instance, if Medicare decided to ban for-profit hospice providers, those providers would merely become nonprofit hospice providers and little would change. The problem isn’t the profit motive. Nonprofit status is a tax election, not a desire to lose money. Even nonprofits must earn a profit in order to stay in business. Experts point out that care from small, locally owned hospice firms varies in quality more than larger, national chains. Firms that want to do a good job can be found among both for-profit and nonprofit firms. It could have to do with the nature of tax laws. Those firms that are registered as nonprofits get all manner of tax breaks. They don’t pay sales tax, income tax, property tax and so on, while for-profit firms must cover all those expenses out of revenue.
The most recent report from MedPAC, the independent agency advising Congress on Medicare spending, found that in 2020, for-profits received 20.5 percent more from Medicare than they spent providing services. The margin for nonprofits, whose daily per-patient expenditures are higher, averaged 5.8 percent.
As mentioned above, Medicare has a pilot program to combine the care provided by Medicare Advantage plans with hospice care. This makes a lot of sense. Medicare advantage plans are popular with seniors. Also, Medicare Advantage pays for the care Medicare enrollees receive prior to hospice care. Thus, Medicare Advantage is better able to decide when hospice is appropriate. Once enrolled in hospice care, a senior is technically not supposed to receive therapeutic care. That means that a senior who has terminal cancer is no longer allowed to receive chemotherapy once they are enrolled in hospice. Hospice care is about dying comfortably, not prolonging the inevitable.
As I wrote back in February, Hospice Care is a Great Idea that is being Abused. Hospice care is intended to keep patients comfortable in the final few months prior to their death. The goal for Medicare is to find a way to make the program as sound as possible.