What’s Changed In Hospice in 2024?

Hospice use continues to grow as more older people have serious diseases, leading to the need for more palliative care. At the same time, CMS is adapting and trying new models to measure and improve quality and pay for services.

The federal government spent $23.7 billion on hospice care in 2022, according to the latest Medicare Payment Advisory Commission (MedPAC) report, with at least 1.7 million Medicare beneficiaries receiving service. This includes nearly half of Medicare beneficiaries who died that year. Here’s what to expect over the next year.

Hospice carve-out

Hospice has historically been carved out of the Medicare Advantage program, with Medicare paying for the service on its own. CMS started a pilot in 2021, allowing Medicare Advantage organizations to include hospice benefits in the Value-Based Insurance Design (VBID) model; however, it didn’t go over well, with decreasing participation and some operational challenges. Part of that declining participation included UnitedHealthcare withdrawing from VBID as of the end of 2023. CMS recently announced that the hospice pilot will end Dec. 31, 2024.

Tarrah Lowry

“Medicare Advantage is not used to having anything to do with hospice and vice versa,” says Tarrah Lowry, interim president of Trustbridge and chief operating officer of Empath Health.

Trustbridge, a hospice care provider, experienced its own difficulties with the carve-in due to difficulty with billing issues and information sharing when working with Humana, which was participating in the VBID and hospice carve-in model. Although they had a good relationship with Humana, Lowry said, some of Humana’s information requests were too expensive to provide with the requested frequency. “It’s bringing together systems not used to working together,” she says.

Quality continues to be a CMS focus, although not everyone thinks the approach it is taking is the right one. The Special Focus Program (SFP) was part of the 2021 Consolidated Appropriations Act to identify poor performers using specific quality indicators. CMS finalized the methodology for inclusion in the SFP in the 2024 home health final rule. “They’re concerned about low-quality care,” says Patrick Harrison, J.D., senior director of regulatory and compliance at the National Hospice and Palliative Care
Organization (NHPCO).

Patrick Harrison

CMS is requiring larger and established hospices to provide data using the Consumer Assessment of Healthcare Providers and Systems (CAHPS) hospice survey. This survey aims to assess condition-level deficiencies, substantiated complaint findings, performance under the hospice care index and certain other hospice survey measures. On average, just under half of the hospices eligible to participate in the SFP have publicly reported CAHPS survey data, according
to CMS.

Harrison says the methodology will be used to determine which hospices are potentially included in the SFP, and the bottom 10% of participating hospices nationwide will be publicly named in November 2024. He expects 700 hospices to fall into that category.

Although the goal is positive, Harrison says, with transparency helping consumers make informed choices about where to receive care, NHPCO and some other national hospice organizations are expressing serious concerns about the methodology. One reason is that it doesn’t scale survey results and substantiated complaint scores based on hospice size. A hospice with a 500-person census and one adverse survey finding could be scored the same as a hospice with a 10-patient census and one adverse survey, he says. An unscaled score can penalize larger hospices and let smaller organizations with quality issues skate by, he notes,

Another concern, Harrison says, is that CMS is placing too much emphasis on CAHPS hospice survey scores. For hospices that provide survey information, the data are double-weighted. Slightly less than half of all SFP-eligible hospices report the data. This may provide a disincentive for hospices to report quality data, Harrison says. “We may be allowing other hospices to fly under the radar — [those] that aren’t considered good quality [and] aren’t willing to report quality data,” he said.

Physician eligibility

Another change in the 2024 fiscal year is that CMS now requires that doctors who certify patients to be eligible for hospice care to be enrolled as a Medicare provider or be opted out in a valid manner. CMS wants oversight over physicians certifying to an illness and Medicare hospice benefits “to ensure there’s no pattern of previous deficiencies, and to ensure they’re really acting the way they should be in accordance with the requirements,” Harrison says.

Although this is helpful overall, there are challenges in the CMS implementation, according to Harrison. That includes unclear and inconsistent guidance on billing and claims, in how hospices should report on their claims forms. Harrison is also concerned that by requiring the patient’s designated attending physician to be Medicare certified, CMS may be restricting patient choice in who manages their care.

Three-quarters of hospice agencies are for-profit, up from one-third in 2000. MedPAC showed that for-profit hospice margins were
20.5% versus 5.8% for nonprofits in 2020. A RAND Corporation study showed lower-quality care in for-profit hospices, partly due to using fewer and less-skilled staff members.

As a hospice and palliative care organization, Trustbridge executives saw an uncertain future with potential payment changes, whether accountable care organizations begin paying for hospice or Medicare Advantage makes another run at it. “There are lots of changes that could happen, [which] means there’s less money for hospices,” Lowry says.

Trustbridge was recently acquired by Empath Health, becoming Florida’s largest nonprofit postacute care provider — a move Lowry says was a good one. “It was important to us, our donors and our board to stay nonprofit,” she says. Trustbridge gives away millions of dollars in free care each year, and they wanted to align with a nonprofit organization that supported that, says Lowry.

The Trustbridge acquisition was just one of many from the past 12 months, with 2023 seeing a decrease in deal volume. That was due partly to less low-hanging fruit and CMS’ “license flipping” rule that requires hospices to retain their ownership for 36 months after obtaining a license.

Show me the money

The Medicare hospice 2024 fiscal year rate increase is 3.1%, which Lowry says was not enough of a boost. “The cost of living is going up substantially and we can’t recruit enough nurses to fill positions,” she said. For 2025, CMS proposed a 2.6% increase. “We’re all disappointed,” Lowry says, as it doesn’t match the higher rates they’re paying nurses and aides.

The 2024 annual hospice cap per patient was the same as the 2023 rate plus the 3.1% fiscal year increase, at $33,494.01. For 2025, the proposed rule caps per patient payments at $34,364.85, again using the 2024 figure plus the 2.6% increase.

What’s coming up in 2025?

The next year’s proposed rule is out, promising significant changes to the CAHPS survey.

“The goal is to simplify their surveys,” and they’ll do it by removing some questions from the survey and and simplifying some of the avaiable answers, says Harrison. They are also proposing to add a new online option for filling out the surveys so caregivers won't have to send their responses
in by mail.

Although there are other changes in the 2025 rule, one that Lowry says is notable involves having hospice organizations provide payment information to CMS about expensive palliative care, such as dialysis, radiation and chemotherapy. “My organization pays for a lot of those things,” she says. Medicare will not be reimbursing for those treatments right away, but the informaton gathering could be a first toward understanding the burden they place on hospsice providers and their budgets.