Decrease Hospice Cap?

Per Hospice News Today, 3/25/20.

MEDPAC Calls for 20% Cut in Hospice Payment Cap
Hospice News
March 23, 2020
The Medicare Payment Advisory Commission (MEDPAC) has recommended to Congress that 2021 per diem payments for hospices remain unchanged from fiscal year 2020 levels and that the aggregate payment cap be reduced by 20%. The commission members voted unanimously on these recommendations at their January meeting. Congress would have to accept these recommendations before they could be implemented. In past years, MEDPAC has called for payment reductions to hospices that Congress opted to not implement, so the outcome of these recommendations remains uncertain. “In light of the differential financial performance across providers, the commission has developed a two-part recommendation that would keep the payment rates unchanged in 2021 at the 2020 levels for all providers, while modifying the aggregate cap to focus payment reductions on providers with disproportionately long stays and high margins,” the commission’s report indicated. “The recommendation would also wage adjust the aggregate cap to make it more equitable across providers. This recommendation would bring aggregate payments closer to costs, would lead to savings for taxpayers, and would be consistent with the commission’s principle that it is incumbent on Medicare to maintain financial pressure on providers to constrain costs.” … “Over the years, the Commission has been concerned that the high profitability associated with long stays in hospice may be spurring some providers to enter the hospice field with revenue-generation strategies. … The aggregate cap currently provides a limit on the extent to which a hospice provider can earn substantial profits by focusing on very long stay patients. A policy to reduce the cap would potentially further limit that type of business model.” Many stakeholders in the hospice community have objected to this reasoning, pointing to the changing nature of hospice care and its patient population.