Medicare Spending on Hospice Rising Among Nursing Home Residents

Medicare spending on hospice care for beneficiaries in nursing homes increased by 69% between 2005 and 2009, according to an audit by HHS' Office of Inspector General, Kaiser Health News' "Capsules" reports.

According to the audit, Medicare hospice spending increased during that period from $2.6 billion to $4.3 billion.

The audit also found that:

• More than 33% of Medicare hospice spending in 2009 went to 337,000 patients in nursing homes;
• About 58% of the increased spending resulted from growing Medicare enrollment, and much of it also was caused by the length of hospice care in nursing homes -- three weeks longer than similar services received by patients at home;
• Hospice companies with more than 66% of patients in nursing homes earned an average of $21,306 per patient, or $3,182 more than the overall average cost per hospice patient; and
• Nursing home hospice patients tended to require less medical care than average hospice patients, allowing hospice companies to spend less of their Medicare payments on care.

Jodie Nudelman, head of OIG's New York office, said hospice companies on average provide only four services per week for Medicare beneficiaries at nursing homes. She said, "And many of these services were similar to the services that nursing facilities already are being paid for."

OIG noted that having hospice patients in nursing homes is becoming an especially lucrative business for hospice companies. In response to the audit, CMS said it will follow OIG's recommendations and reduce its payments for nursing home-based hospice patients (Rau, "Capsules," Kaiser Health News, 7/21).