How to make the most of Medicare payments

Special Feature: The Bottom Line

Prevent Medicare eligibility, cap problems

While it's true that Medicare might change the way hospices are paid sometime in the future, it's still important to make the most of the current system, experts say.

For example, hospice directors and staffs need to learn everything they can about the Medicare payment gray areas and the aggregate per beneficiary limit on Medicare payments, or what is commonly called the Medicare cap.

Hospices also need to learn more about their own true costs so they can accurately portray the financial costs and health care savings benefits of hospice services. Without the best data available, Medicare likely will make mistakes when and if the hospice benefit is changed.

"Hospices save a lot of money, as opposed to having a patient spend the last six months of life in a hospital," says Jeneane Brian, BSN, MBA, clinical executive with Misys Healthcare Systems in Raleigh, NC. Misys Healthcare produces the Misys Homecare software that is used by hospices and home care agencies to manage financial and other business operations electronically. "Hospices need to portray expenditures in a true fashion so they can justify [the Medicare hospice payment] and keep getting more of this," Brian adds.

Hospice professionals also need to keep a positive attitude about data collection and the changes Medicare is imposing on hospices with regard to the new certificates of participation (COPs) and additional reporting requirements, says Annette Lee, MS, RN, COS-C, clinical product development specialist for the Corridor Group of Overland Park, KS. "Medicare is paying the bill, and we have to comply with what they are wanting," she says. "Don't be afraid of reporting data; take it seriously and be thorough and show whatever resources you're using."

Know eligibility criteria

Lee and Brian offer these suggestions for how hospices can improve their knowledge and use of the Medicare hospice payment:

  • Understand eligibility.
    The Medicare hospice eligibility criteria are a prognosis that a patient has six months or less to live, Lee notes. "Each Medicare intermediary comes up with local eligibility determinations [LEDs], which are guidelines for noncancer diagnoses on what kind of patient fits this eligibility requirement," she says.
    The key is to use these guidelines and admit the right patients as soon as a hospice can. Also, hospices need to spread the word to referral sources about which kind of patients they are looking for, Lee suggests.
  • Use technology to improve efficiency.
    Electronic technology can help hospices improve their financial tracking, including assisting them in staying under their Medicare cap, Brian says. "Personally, I've managed a hospice, and I don't know how I would do that without robust financial reporting," she says.
    Hospice nurses who have access to laptop computers for completing their documentation can save time, money, and staff energy, Brian says. This technology will help prevent staff burnout and unnecessary trips back to the office, she adds. "The hope is that hospice organizations will realize productivity gains and lifestyle gains that can be had from laptops in the field," Brian says. "When nurses bring a laptop and do documentation in the patient's home, they can synchronize it on the Internet and not have to return to the office to turn in paperwork."
    This technology frees nursing time to spend with patients, and it enables nurses to readily see all nursing notes and reports from other disciplines on the electronic record, she adds. "There are many advantages that come from using mobile electronic health records," Brian notes.
    For example, electronic records might improve communication between field staff and office staff. When Brian's own father died in hospice care, a nurse showed up for regular hospice duty the day after he died because of faulty communication between field staff and the office, she explains.
    Also, the IV equipment remained in the home for five days because the paperwork filled out by the nurse who pronounced her father dead had not made its way to the office and to the medical equipment company as quickly as it should have, Brian adds. "These mistakes create an expense, family satisfaction issues, and they place an additional burden on nurses," Brian says.
    Having a mobile electronic health record would prevent these types of problems, she adds. "It's not about having the hospice nurse make an extra visit, but it's about shortening her day," Brian explains. "Hospice nurses will work until 8 p.m., and that has downstream implications for turnover rates and burnout."
    By using an electronic health record, the hospice enables nurses to shave precious minutes off their day and go home earlier, she adds.
  • Document fully and accurately.
    Incomplete documentation helps no one, and can cause a hospice to have Medicare denials. Hospice documentation should note the patients' improvements under hospice care but also outline the ways in which the patient is continuing to decline, Lee says.
    "To avoid a denial, they need to show that the patient still meets the guidelines," she says. "First, admit the right folks and, second, make sure you're documenting correctly and thoroughly with objective data whenever you can."
    It's not sufficient to simply say that the patient is continuing to decline; this has to be demonstrated. "In hospice care, you want to see progress in much smaller goals that can facilitate pain control," Lee says. "But on the other hand, the patient may still have a decrease in appetite and is still losing weight."
    In the big picture, the patient continues to decline. "You can ensure the patient gets enough medication to be comfortable, but the patient still can't tolerate activity," she says.

Work toward a mix of patients

The quality initiatives required under the new COPs will work out well with documenting eligibility because to track any outcomes as being positive, hospices will need to have objective data, Lee explains.

"The use of more objective data is going to help show the outcome and help show the eligibility, too," she adds. "So it can be a positive on both sides of that."

  • Use the right resources.
    "It's good to have a mix of short stay and long stay patients," Brian says. "You need a bell curve of utilization when looking at the resources of patients admitted to hospice."
    Typically hospice patients require the most resources at the front end and back end, she notes. "A lot of the durable medical equipment and supplies you order in the beginning make the first few days of hospice care very expensive," Brian explains. "Then the interim period will have no new charges."
    At the very end as the patient dies, there could be more intensive services as the patient requires more care, she says. "So you will spend more than a per diem amount in the beginning and end of hospice patients, and those three weeks of maintenance care in the middle will help subsidize losses in the beginning and end," Brian says.
    If a hospice maintains a good mix of patients, then the shorter stay patients and longer stay patients will be offset, and it's less likely the hospice will run into problems with its Medicare cap. "If you get nothing but very short-stay patients, then you don't threaten your cap, but you're not going to be profitable," she says.
    At the other extreme, having too many long-stay patients could cause a hospice to exceed the Medicare cap, which would cost hundreds of thousands of dollars in payment losses. "Don't underserve or overserve," Lee says.
    You may need to front load your visits to get that patient up and going, and a lot of education happens at the start, she explains. "But when you see your plan of care is effective, then you could decrease slightly so that the patient and caregiver could independently carry out the plan of care," Lee says.
    Underserving patients will hurt patients and the hospice in the long run, she notes. "You won't have a good handle on their symptoms, and, secondly, they'll end up going to the emergency room, which hospices never want to see happen," Lee says. "So stay in close touch with that patient and try to send in a good mix of your interdisciplinary team."
    When the nurses are not visiting, have home health aides visit, and try not to group visits all on one day, she suggests. "We have to meet as an interdisciplinary team so we can plot out those visits to try to get as many visits in throughout the week as we can," Lee adds.
  • Diversify the hospice's services.
    "One strategy of bigger hospice organizations is they diversify their organizations to include other service lines that are not under the cap, like palliative care," Brian says. "They embark on these other types of services that are out from under the cap, and these help subsidize their hospice when the hospice is getting into the position of bumping up against the cap."
    Smaller hospices may not have the option of taking that step, however. "A number of home care agencies have hospices, as well, and that's good because they have an ability to diversify and balance and use one organization to balance the other one across the whole enterprise," Brian says.