Design Highlights
- The GAO recommends transitioning from a per-diem to a per-visit payment model for Medicare hospices, citing potential benefits in service delivery.
- This recommendation suggests a major shift in hospice payment rules, aimed at enhancing care responsiveness and efficiency.
- Current per-diem rates, including Routine Home Care, may not adequately reflect the intensity of services required at the end of life.
- Critics argue that the GAO’s recommendation lacks solid evidence and may complicate existing hospice payment structures.
- Ongoing debates highlight the need for Medicare payment models to adapt to evolving care demands while addressing financial constraints in hospice services.
Medicare is shaking things up again with its hospice payment model. It seems every few years, the Centers for Medicare & Medicaid Services (CMS) decides to tweak the rules, and this time is no different. The current payment system is based on per-diem rates. That means hospices get paid a set daily amount depending on the level of care provided. Not a per-visit system, mind you. Instead, they have to work with categories like Routine Home Care (RHC), Continuous Home Care (CHC), General Inpatient Care (GIP), and Inpatient Respite Care (IRC). It’s a bit like a game of Monopoly where the rules keep changing, and nobody really knows how to play anymore.
Medicare’s hospice payment model feels like a never-ending game of Monopoly, with rules changing just when you think you’ve figured it out.
In the case of RHC, there are two per-diem rates. The first is for the first 60 days of care, where they get a whopping $224.62 a day, and then it dips to $176.92 for days 61 and beyond. It’s almost like they’re saying, “Thanks for sticking around, but we figure you don’t need as much care now.” That’s a cheeky way to think about it. And let’s not forget the Service Intensity Add-On (SIA) for skilled visits in those last days. Because, of course, now they want to throw in a little extra cash for the intense care near death. How generous!
But let’s talk about the future. The FY 2025 payment update includes a 2.9% increase, which translates to an extra $790 million going into hospices. That sounds like a lot—until you realize it’s just a drop in the bucket. Plus, the cap amount is nearing $35,000, which is all fine and dandy until you realize that hospice care is supposed to be about comfort, not a pricing war. In fact, the finalized hospice cap for FY 2025 is $34,465.34, demonstrating the limits of funding in this care model.
Now, some folks at the Government Accountability Office (GAO) are suggesting that maybe, just maybe, hospices should ditch the per-diem model altogether for a per-visit pay system. However, it’s important to note that the current payment model aligns Medicare payments with the costs of providing care. But here’s the kicker: that suggestion isn’t even backed up by solid evidence. It’s like someone saying, “Hey, why don’t we just change everything?” without a clue as to how it would work. For patients transitioning into hospice care, it is worth noting that long-term care insurance generally does not cover hospice services that Medicare already pays for, leaving families to navigate a complex web of overlapping coverage gaps.
