Conflict between hospice, nursing homes can impede end-of-life care

Each side must understand the other and be willing to cooperate

Almost any way you approach it, referrals from nursing homes are difficult to come by. There is the clash of organizational cultures, the pass-through payments, and other reimbursement concerns that create barriers.

Medicaid recipients living in nursing homes are especially vulnerable to being excluded from hospice care, and an emerging reimbursement trend in some states is removing what little financial incentive nursing homes have to refer their patients to hospice care.

In states like Kentucky and Pennsylvania, dying patients, who often require the most intensive care, are treated as outlier cases and are being excluded from the nursing homes’ case-mix adjustment formula. The effect is to lower the reimbursement that a nursing home receives for a patient.

In recent years, Medicare established a prospective payment system — much like the diagnosis-related groups implemented in hospitals in the early 1980s — for post-acute providers, including nursing facilities. The idea was to move away from cost-based reimbursement, which encouraged spending, to a system that pays on a per diem that is adjusted based on case mix and regional wage differences. The reasoning behind the change, which was part of the 1997 federal Balanced Budget Act, was to encourage cost-effectiveness among home health agencies, skilled nursing facilities, and other long-term care facilities.

State-sponsored Medicaid programs soon followed suit, adopting either the same case mix adjuster used by Medicare (the Resource Utilization Group System III) or one of their own. But in an effort to further wring out greater efficiency, some states are removing hospice patients from the case mix calculation, says Cherrie Meier, a nursing home consultant for the National Hospice and Palliative Care Organization in Alexandria, VA, and director of public affairs for Vitas Healthcare Corp. in Austin, TX.

Each day of payment is based on an assessment of the patient’s clinical and functional status using the Minimum Data Set assessment tool. Case-mix adjustment accounts for the fact that providers treat patients with varying degrees of severity. The higher the severity, the greater the per diem amount paid to the provider for caring for the patient.

Employing a case-mix adjuster encourages nursing homes to take on the sickest patients, rather than dump them in other institutions or admit them to a hospital. Because dying patients require greater amounts of skilled nursing, nursing homes are reluctant to refer the patient to hospice and lose out on revenue.

The outlier exemption from case mix adjustment is only the latest in a number of disincentives that have plagued the nursing home/hospice relationship. Others include:

  • Pass-through provision. Because Medicare and Medicaid are averse to paying two providers for the care of one patient, Medicare and most Medicaid payers reimburse hospices for the universe of care provided to a nursing home patient. Included in the payment is the nursing home portion for room and board. This often leads to slower payment compared to direct payment from Medicaid as a result of electronic filing of required documentation.
  • 95% reimbursement for room and board. Hospices are paid 95% of the cost of room and board, which they are expected to pass along to the nursing home. Unless the hospice is willing to chip in the last 5% to cover the entire cost of room board, nursing homes are often unwilling to discount the cost of the patient’s stay.
  • Culture and organizational clashes. There seems to be an underlying mutual misunderstanding between nursing homes and hospice. For example, hospice staffers sometimes view nursing homes as lacking in end-of-life care training, despite the belief among nursing home personnel that they too are providers of end-of-life care.

Because of the last reason, nursing homes have balked at making hospice referrals, says Susan Polniaszek, senior reimbursement policy analyst for the American Association of Homes and Services for the Aging in Washington, DC. "I don’t think the money issue is a reason," she says. "Nursing homes do palliative and end-of-life care. In some cases they don’t need to refer a patient to hospice. Other nursing homes don’t understand hospice care, and hospice doesn’t understand nursing homes."

Still, hospices need to find a way to surmount the economic and social barriers that exist. A 1998 five-state study underscored the need for hospice expertise in nursing homes. It showed widespread untreated pain among elderly nursing home residents with cancer, especially among the oldest and minority patients.

The study, which was published in the Journal of the American Medical Association, concluded that there is room for dramatic improvement when it comes to treating and managing pain in nursing home populations.

Researchers examined data collected on 13,625 cancer patients ages 65 and older discharged from hospitals to 1,492 nursing homes from 1992 to 1995. In total, 4,003 patients reported daily pain. Of those, 16% received a simple analgesic such as aspirin or acetaminophen. Thirty-two percent were given codeine or other weak opioids, and 26% received morphine. However, 26% of patients with daily pain received no analgesics, not even an aspirin or acetaminophen tablet.

Patients who were 85 or older and experienced daily pain were about 50% less likely to receive any analgesic than those ages 65 to 74 years. Only 13% of patients ages 85 years and older received codeine or other weak opiates or morphine, compared to 38% of those ages 65 to 74 years.

African-Americans were 50% less likely than whites to receive any analgesics. Although not statistically significant, a similar trend in the data was noted for Hispanics, Asians, and American Indians.

Hospices, nursing homes should join forces

For Meier, the answer lies in convincing Medicaid officials in the 38 states that currently offer a hospice benefit to review their policies and make the needed changes to enhance the transition between nursing home and hospice care. Also, hospices and their state hospice organizations should join forces with nursing home trade groups to lobby for changes at the state level, Meier adds.

While changing Medicaid rules and regulations will ultimately lead to greater opportunity for referrals, true improvement will not come until hospices take the time to understand their nursing home counterparts.

"Hospices must understand that nursing facilities are the most regulated industry next to the nuclear industry," says Polniaszek. "The contract between the hospice and the nursing home must be spelled out so that both sides know who is responsible for what. And hospices must understand that no matter who has [clinical management] of the patient, the nursing home is physically liable for that patient."

A dialogue between hospices and nursing homes is the first step to expanded referrals, says Polniaszek. Hospices must understand that nursing home staff not only lack training in palliative care, but strict regulations prevent them from using drugs the same way hospices use them.

In addition to regular inservice training, hospice workers need to have an ongoing training component. For example:

  • Bring written literature about your hospice and its mission to the nursing home when visiting a patient. This will help educate new nursing home employees who have not yet had hospice inservice training.
  • Invite nursing home staff to your hospice’s hospital inservice training.
  • Make your palliative care services available to nursing homes. Even though a hospice cannot receive payment unless the patient has a terminal illness diagnosis, this gesture creates excellent goodwill, which can lead to future referrals.

Hospices, too, could benefit from some education. Nursing home staff often are frustrated by hospice staffs’ seemingly cavalier attitude toward nursing home policies. For instance, hospices sometimes do not appreciate the strict schedule of patient assessments required by Medicare. The Minimum Data Set (MDS), a lengthy patient assessment form, must be completed every 30 days for the first 90 days of care and every 60 days after that. Even though the hospice owns clinical management of the patient, the nursing home still must complete the MDS because the patient is still a resident of the nursing home. Because hospice is providing a significant portion of the care, hospice input and assistance are needed to complete the assessment.