The federal Office of Inspector General (OIG) issued a report, "Medicare Hospices Have Financial Incentives to Provide Care in Assisted Living Facilities." The report is based on work OIG conducted to inform the Centers for Medicare and Medicaid Service (CMS). CMS is directed to reform the hospice payment system, collect data relevant to revising payments and develop quality measures in the Patient Protection and Affordable Care Act.  

The study is based on an analysis of data from 2007 through 2012. Below are some of the OIG findings:

• Medicare hospice payments for hospice care in assisted living facilities more than doubled in five years.
• Hospices provided care much longer and received much higher Medicare payments for beneficiaries in assisted living facilities as compared to other settings.
• Hospice beneficiaries in assisted living facilities often had diagnoses that usually require less complex care.
• There were differences in payments between for-profit and non-for profit hospices.

The OIG concluded that there are financial incentives created by the current payment system, and the potential for hospices to target beneficiaries in assisted living facilities as a result. The report recommends a variety of steps for CMS to take, including payment reform to eliminate these incentives and making more hospice data publicly available.

It should be noted that the report does not break down the analysis by state. New York has few for-profit hospices. Additionally, residents of assisted living programs are not able to access the hospice benefit; a complex policy issue LeadingAge New York and other stakeholders are working to resolve.

Click here to view the report.

Contact: Diane Darbyshire, ddarbyshire@leadingageny.org, 518-867-8828