Medicare Hospice Spend Rises to $15.8B in 2015

More Medicare patients using hospice services accounted for the agency’s increasing spending on hospice by 52% between 2007 and 2015, according to a study by CMS researchers published in Health Affairs. Per patient costs remained largely flat during the period. About 1 million Medicare beneficiaries used hospice in 2007 compared to 1.4 million in 2015. Medicare spent $10. 4 billion on hospice care in 2007 compared to $15.8 billion 2015.

Also of note, CMS researchers found that spending and spending growth varied by geographic region and diagnosis.

Researchers did not try to determine the cause of the variation but noted that some of it may be caused by a change in reporting rules.

“On May 10, 2013,CMS published a proposed rule clarifying that ‘debility’ and ‘adult failure to thrive’ were not acceptable primary diagnoses on hospice claims and stating that effective October 1, 2014, it would no longer accept hospice claims with these diagnoses,” the study states. “Following this announcement, debility spending declined rapidly in 2013 and virtually ended in 2014 and 2015.

The authors analyzed all Medicare hospice claims, including those for Medicare Advantage, during the period. Researchers grouped 285 ICD-9 and ICD 10 codes into seven broad categories: cancer, circulatory or heart disease, dementia, respiratory disease, stroke, debility or failure to thrive, and other.

“Patients with cancer diagnoses have the fewest average days of hospice care per patient, whereas those with dementia diagnoses have the most average days (in 2015, 47 days and 103 days, respectively)…. Average days per patient remained generally unchanged in the period 2007–15, with the exception of stroke patients—for whom average days increased from 55 days to 75 days,” the study states.

Geographic variation was measured using hospital referral regions (HHRs). The mean per patient spending for hospice care ranged from $4,683 in Minot, N.D., to $18,106 in San Mateo, Calif.

“Generally speaking, spending per patient was higher in HRRs in California, Texas, the Southwest, and the South and lower in central New York and North and South Dakota….”

The variation is driven by differences in average days of hospice care per patient, because of the per diem payment design of Medicare’s hospice benefit. That, in turn, is related to the diagnoses of hospice patients.

“Regions with higher average spending per patient often have more hospice patients with dementia diagnoses, compared to areas with lower per patient spending,” the study states. “Conversely, regions with lower spending tend to have more hospice patients with cancer diagnoses than areas with higher per patient spending.”

Hospice care spending on cancer patients dropped from 24% in 2007 to 20% in 2015. That might be because of the growing recognition of the benefits of hospice for terminal disease other than cancer.

The diagnosis with the largest share of spending in 2015 was dementia, which accounted for 25% of spending, or $4 billion.

Source: Health Affairs