Brace for payment revisions under health care reform

Law includes positive demonstration project for hospice

[Editor's Note: This issue looks at what items are included in the Health Insurance Reform Bill signed into law and what industry experts anticipate the effect will be on hospice. As implementation decisions are made, Hospice Management Advisor will cover those changes and offer suggestions on how to remain successful.]

The hospice industry's focus has shifted from lobbying for or against proposed parts of the health care reform legislation to working to ensure that implementation requirements are reasonable and appropriate for hospice.

"We have shifted from the frenzy associated with the legislative aspects of passing a new law to the realities of implementing the requirements of a new law," says Jonathan Keyserling, JD, vice president of public policy and counsel for the National Hospice and Palliative Care Organization (NHPCO) in Alexandria, VA. The law contains some provisions that are positive for hospice, but it also includes some rate cuts that can have significant effects on some hospice organizations, Keyserling says.

"NHPCO will work feverishly with legislators to soften or eliminate some of the planned rate cuts, but our advice is to begin planning for cuts that will occur in FY 2013," he says.

Changes included in the health reform law, along with billing and data collection changes imposed by the Centers for Medicare and Medicaid Services (CMS) in recent years, represent a significant difference in the way that the hospice industry conducts business, Keyserling says. "For many of the last 30 years, the hospice industry has been allowed to undergo organic change that was initiated within the hospice industry itself," he says. "During the last five to eight years, however, changes have been forced on us from outside organizations."

Hospices have faced deadlines and short timeframes that have required a great deal of staff and financial resources to plan and implement the programs necessary to meet these requirements. "We are concerned that these changes, and those included in the health reform law, come at the same time hospices are facing rate cuts, such as the elimination of the Budget Neutrality Adjustment Factor," Keyserling says.

Many of the changes included in the health reform law require an organizational as well as a cultural change for many hospices, Keyserling says. Strategic planning is important because hospices need to anticipate worst case scenarios related to reimbursement so that they are able to react quickly to absorb the impact of rate cuts, he says. Implementing processes to become more efficient will be especially critical for hospices, Keyserling says.

"There is a real possibility that the entire hospice payment system will be revised sometime after 2013," Keyserling warns.

Carla Braveman, BSN, RN, MEd, CHCE, president and chief executive officer at Big Bend Hospice in Tallahassee, FL, says, "We will see big changes in our payment structure. We need to figure out how we will manage outside a per-diem basis."

Good data essential

The first step for hospices to make sure payment reforms are realistic is to submit the best possible data to CMS, says Braveman. Not all hospices report data in the same manner, so a standardized reporting requirement will help hospices, she says. As CMS requires more data for use in billing and cost reports, Braveman urges hospices to report information as precisely as possible.

"We want CMS to have the most accurate data available when changes are proposed," she says.

Keyserling says, "We are all concerned about unintended consequences of payment methodology changes. We are recommending that data collected be carefully analyzed and validated before any changes to the hospice payment system are implemented."

NHPCO has retained The Moran Co., a Washington, DC-based health care research company, to collect patient-level hospice data in order to model alternative payment systems, he says. These models will be used as part of discussions between officials from NHPCO and officials with the Medicare Payment Advisory Commission (MedPAC) and CMS regarding payment reform strategies, he adds.

Ideas for hospice payment reform have been around, but the key to a payment model that works for the industry and for patients is data collection, says Keyserling. "MedPAC is also considering a payment system that will provide larger payments at the beginning and end of hospice care, with lower payments in the middle of service," he says. "I also believe that we will move to a pay-for-performance system that associates payment levels with outcome data."

Braveman also is certain that pay for performance is in hospice's future. "I do think hospice will pose a challenge for development of outcome measures," she says.

Unlike home health outcomes measures that focus on goals reached upon discharge, hospice measures will have to report on moments in time, she says. Florida requires hospices to report outcomes related to pain control and family satisfaction, but other measures could include falls, dying in site of choice, and survivorship of family member after one year, Braveman suggests. "The PEACE project also has an extensive list of quality measures for hospice that might be incorporated as well," she adds. The PEACE project is the result of a 2008 CMS study conducted by the Carolinas Center for Medical Excellence that looked at development of quality measures for hospice.

Even though hospices face more changes, there was good news in the health reform law, Keyserling points out. "Congress included a concurrent care demonstration project in the bill," he says.

The three-year demonstration project will allow patients who are eligible for hospice to receive all Medicare-covered services not normally covered while receiving hospice care. The project has been an NHPCO priority for some time, Keyserling says. The access to other Medicare services along with hospice will increase access to hospice for more patients, he says.

The time line for implementation of various parts of the health reform law is not unchangeable, Keyserling says. "We know that a CMS administrator must be appointed to oversee these activities, but I anticipate that the demonstration project details will be announced in the next six to nine months, and the second part of our rate cut will be in FY 2013," he says. "The good news throughout all of this process is that hospice has been recognized as an important part of the health care solution as opposed to part of the problem."