Hospice: Background 1963: 1965: 1968: 1969: 1972: 1974: : 1978:

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Clementine Brown
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1 Hospice: Background In celebration of the 30th year of enactment of the Medicare Hospice Benefit (MHB), the Hospice Association of America would like to share a chronology of Hospice care in the United States. 1963: 1965: 1968: 1969: 1972: 1974: Dame Cicely Saunders, then in the process of establishing St. Christopher s inpatient hospice in London, visited Yale University. Her lecture on the concept of holistic hospice care to medical students, nurses, social workers, and chaplains included photos of terminally ill cancer patients and their families that dramatically showed the differences between before and after symptom control. This contact set off the following chain of events, which resulted in the development of hospice care as we know it today. Florence Wald, then Dean of the Yale School of Nursing, invited Saunders to become a visiting faculty member of the Yale School of Nursing for the spring term. Wald took a sabbatical from Yale to work at St. Christopher s to learn everything she could about hospice. On Death and Dying, written by Dr. Elisabeth Kübler-Ross, based on more than 500 interviews with dying patients were published. It identified the five stages through which many terminally ill patients progress. The book became an international best seller. In it Kübler-Ross made a plea for home care as opposed to treatment in an institutional setting and argued that patients should have a choice and the ability to participate in the decisions that affect their destiny. Kübler-Ross testified at the first national hearings conducted by the US Senate Special Committee on Aging, on the subject of death with dignity. In her testimony, Kübler-Ross stated, We live in a very particular death-denying society. We isolate both the dying and the old, and it serves a purpose. They are reminders of our own mortality. We should not institutionalize people. We can give families more help with home care and visiting nurses, giving the families and the patients the spiritual, emotional, and financial help in order to facilitate the final care at home. The first hospice legislation was introduced by Senators Frank Church (D-ID) and Frank E. Moss (D-UT) to provide federal funds to support hospice programs. The legislation was not enacted. America s first hospice, The Connecticut Hospice, Inc., in Branford, Connecticut, began providing hospice services in the home. The National Cancer Institute (NCI) funded The Connecticut Hospice for three years to develop a national demonstration center for home care for the terminally ill and their families : 1978: Additional hospices received similar contract support from NCI. A U.S. Department of Health, Education, and Welfare task force reported that the hospice movement as a concept for the care of the terminally ill and their families is a viable concept and one which holds out a means of providing

2 more humane care for Americans dying of terminal illness while possibly reducing costs. As such, it is the proper subject of federal support. 1979: 1980: 1982: 1985: 1989: 1990: 1991: 1992: The Centers for Medicare & Medicaid Services (CMS) formerly Health Care Financing Administration (HCFA) initiated demonstration programs at 26 hospices across the country to assess the cost effectiveness of hospice care and help determine what a hospice is and should provide. The W.K. Kellogg Foundation awarded a grant to the Joint Commission on Accreditation of Hospitals to investigate the status of hospice and to develop standards for hospice accreditation. Congress included a provision to create a Medicare hospice benefit in the Tax Equity and Fiscal Responsibility Act of 1982, with a 1986 sunset provision. Congress was concerned about cost containment and included a cap on both overall annual aggregate per-patient expenses and inpatient hospital utilization. CMS created a prospective daily reimbursement system for the Medicare Hospice Benefit. The Omnibus Budget Reconciliation Act of 1985 gave a 10% increase in reimbursement rates, made the Medicare Hospice Benefit permanent and allowed hospices to care for residents of nursing facilities. States were given the option of including hospice in their Medicaid programs. There were 158 Medicare certified agencies. The Government Accounting Office (GAO) released a study stating that only about 35% of eligible hospices were Medicare certified. There were several reasons listed, one was the low payment rates. There were 701 Medicare certified Hospices that cared for 60,802 patients with an average length of stay of 44 days. Congress gave hospices their first increase in reimbursement since 1986 and tied future increases to the annual increase in the hospital market basket through a provision contained in the Omnibus Budget Reconciliation Act of The 210-day lifetime benefit limitation under the Medicare Hospice Benefit was replaced by an unlimited fourth benefit period by the Omnibus Budget Reconciliation Act of The number certified grew to 806 that cared for 76,491 persons for an average of 48.4 days. Hospice care was authorized in either military hospitals or under CHAMPUS (now TRICARE) in the National Defense Authorization Act. The Commission on the Future Structure of Veterans Health Care (Mission Commission) released its report recommending inclusion of hospice care in the veteran s benefit package. Congress passed the Indian Health Care Improvement Act of 1992, calling for a hospice feasibility study. CMS discontinued the hospice cost report. The Hospice Association of America (HAA) created a system of financial data collection for internal use, and pilot tested it at the 1993 HAA/National Association for Home Care regional meetings.

3 1993: 1994: 1995: 1996: 1997: The number of hospices participating in the Medicare program had grown from 31 in 1984 to more than 1,288 in The fastest growth was in home care agency-based and freestanding hospices. The average cost per patient was still significantly less than the Medicare hospice cap amount. Thirty-six states offered the hospice option under their Medicaid programs. Hospice retained its volunteer basis; Medicare-certified hospices nationally used an average of one volunteer full-time equivalency (FTE) for every two employee FTEs. Hospice is included in the President s basic benefits package as a nationally guaranteed benefit under his health care reform proposal. Hospice is now an accepted part of the health care continuum of care. The average length of stay (LOS) increased to 57.2 days for 202,768 MHB patients. Congress passes a Hospice Association of America proposed provision in the Social Security Act Amendments of 1994 that requires a hospital discharge planner to evaluate a patient s likely need for appropriate post-hospital services, including hospice services and the availability of those services. CMS sent out a memorandum alerting the regions of problems regarding questionable certifications and recertifications of terminal illness. This resulted in the first focused medical review for hospices and a wake-up call to the industry to improve its documentation and certification procedures or be denied payments. CMS released an expanded version of the Hospice Interpretive Guidelines that provided much needed clarification of the conditions of participation. The CHAMPUS Hospice Benefit was implemented June 1, It mirrors the Medicare Hospice Benefit in conditions of participation and reimbursement. Hospices (1,857) cared for 302,608 patients for an average of 58.8 days. CMS convened a Negotiating Committee on the Medicare Hospice Wage Index that recommended a proposed rule to update the hospice wage index which had not been updated since CMS also initiated a comprehensive review and rewrite of the conditions of participation with the intention of completing them by the end of the year. The Office of the Inspector General (OIG) included hospice in its 1996 Work Plan and Operation Restore Trust. The plan focused on investigating how hospices are admitting patients, what services are being provided, and the relationship between hospices and nursing facilities. HAA participated in the $1.2 million Robert Wood Johnson Foundation-funded campaign to educate consumers and physicians about end-of-life decision-making. The Balanced Budget Act of 1997 (BBA) included Hospice provisions: Payment based on location of service, not hospice agency. Change in benefit periods now and unlimited number of 60-day periods. Hospice responsibility for other items & services in plan of care, such as ambulances. Contracting with physicians amended the core service requirement to allow hospice to contract for physicians services. Hospices were no longer required to routinely provide all physician services directly. Medical directors and physician members of the interdisciplinary group (IDG) are no longer required to be employed by the hospice and may be under contract. Hospice must still retain professional management of services. Waiver of certain staff requirements physical therapy, occupational therapy, speech language pathology services and dietary counseling available as needed on a 24-hour basis. These waivers available only in an area that is not urbanized and can demonstrate to CMS that it has made diligent efforts to recruit appropriate personnel. Application for waivers required.

4 1998: 1999: 2000: 2001: Limitation on liability of beneficiaries and hospices for certain hospice coverage denials. Extension of period for physician certification of an individual s terminal illness. Certification must still be obtained within 2 days after hospice care begins but written certification need only be on file prior to submission of a claim. An initial plan of care must be established at the start of care, prepared by the hospice physician or nurse, in consultation with the attending physician (if there is one) or the hospice physician and one other member of the IDG. Certifications of terminal illness must include specific clinical findings and other documentation supporting a life expectancy of 6 months or less. Cuts in reimbursement rates totaling 4.25%. Hospices nationwide report rapidly declining average and median lengths of stay. The percentage of hospice noncancer admissions decreases dramatically, reflecting the problems associated with determining a six-month prognosis for these patients. An ORT report on hospice states: Overall, the Medicare hospice program seems to be working as intended. The OIG reveals that hospice will not be included in its 1999 work plan. BBA refinement legislation (PL ) increased hospice rates in 2001 and 2002 by 0.5 percent and 0.75 percent, respectively. The US Postal Service issues the Hospice Care commemorative stamp in February. The OIG releases the Draft Compliance Program Guidelines for the Hospice industry. The office of the Assistant Secretary for Planning and Evaluation (ASPE), U.S. Department of Health and Human Services (HHS) and the Urban Institute, released a study, Medicare s Hospice Benefit: Use and Expenditures, confirming cost effectiveness of hospice in the last six months of life. The Medicare Payment Advisory Commission (MedPAC) released a report, Medicare Beneficiaries Costs and Use of Care in the Last Year of Life (May 2000 No. 00-1) showing that, in 1997, hospice services accounted for only 4% of care given and represented a significantly lower cost per patient than any other Medicare benefit. General Accounting Office (GAO) released report, More Beneficiaries Use Hospice; But for Fewer Days of Care (GAO/HEHS , Sept. 18, 2000) stating that for the first time, the number of hospices closing in 1999 exceeded new entrants. Senator Ron Wyden (D-OR) introduces S Hospice Improvement Program Act of 2000, calling for a new hospice demonstration to update the benefit. The bill is not passed. The Benefits Improvement Protection Act of 2000 (BIPA) was enacted and contained the following hospice provisions: 5% increase in Medicare Hospice Benefit (MHB) base payment rates. Codified physician certification language, called for a Department of Health and Human Services study of physician certification language, mandated a MedPAC report on access to and use of the MHB. Created an ability to appeal LMRP decisions to Administrative Law Judges. CMS initiates discussions on Medical Review with Hospice Associations to improve access to hospice. CMS meets with Hospice and nursing facility associations and representatives of residents to create best practices for caring for hospice patients residing in nursing facilities.

5 OIG work plan includes focus on hospice plans of care for both nursing home and non-nursing home populations, hospice payments to nursing homes and use of continuous home care. Senator Ron Wyden (D-OR) reintroduced the Hospice Improvement Program Act of 2001 (S. 1425) calling for a new hospice demonstration and creation of a supportive and comfort care benefit. There were about 2,283 Medicare certified hospices that cared for 579,801 patients for an average of 49.9 days at a cost to Medicare of $6,228 still well below the per beneficiary cap of $16, : MedPAC released report, Medicare Beneficiaries Access to Hospice (May 2002) with two recommendations: 1) the Department of Health & Human Services (DHHS) should evaluate hospice payment rates to ensure they are consistent with costs of providing appropriate care; and 2) DHHS should research differences in the care and resource needs of hospice patients, determine whether a case-mix adjusted payment system for hospice care is feasible and study ways to establish a high-cost outlier policy. ( House of Representatives passed Medicare Modernization and Prescription Drug Act of 2002 (HR 4954) authorizing payment for a Hospice palliative care consultation and 10% increase in reimbursement for hospices in frontier areas The bill did not become law. 2003: Congress passed the Medicare Prescription Drug and Modernization Act of 2003 (HR 1 and S 1) would: 1) authorize payment for a Hospice palliative care consultation benefit; 2) allow nurse practitioners to follow their patients onto the hospice benefit; and 3) allow hospices to contract with other hospices and for highly specialized nursing services. The Congress had not completed action at press time. 2004: The Medicare Payment Advisory Committee (MedPAC) issued a Report to the Congress recommending the Medicare Hospice Benefit (MHB) payment system be reviewed and possibly changed but additional data must first be collected and analyzed. The General Accountability Office (GAO) issued a report in response to BBRA 1999 which compared the MHB payment rates to costs and evaluated appropriateness of per diem payments. GAO also recommended that CMS collect comprehensive patient-specific data on costs, visits & services to determine if the per diem payment system and categories need to be modified. 2005: Senator Ron Wyden (D-OR) reintroduced a bill calling for a new hospice demonstration and creation of a supportive and comfort care benefit - the Medicare Hospice Demonstration Act of 2005 (S. 1001) CMS released the proposed Hospice Conditions of Participation (CoP) on May 27, allowing hospices 60 days to comment on their suggested changes. The CoP, created in 1983 when the Medicare Hospice Benefit was first provided had not been rewritten until this year. NAHC filed extensive comments after gathering input from members. The proposed CoPs emphasized new requirements for patient assessments and quality improvement programs within each hospice. 2006: CMS issues new requirement for hospice advance beneficiary notice effective September 29, HAA/NAHC works with CMS to clarify requirements. CMS also issues new requirement effective January 2007 for hospices to bill continuous care in 15-minute intervals and indicate location of patient at time of receiving services. There are increasing numbers of hospice claims being reviewed by the fiscal intermediaries in various parts of the country with a focus on non-cancer diagnoses.

6 2007: 2008: 2010: 2011: 2012: 2013: CMS funds a hospice quality benchmarking study. HAA/NAHC initiates a hospice benchmarking and quality of care project to help members comply with expected requirements in the new Hospice CoPs. The number of hospices continues to grow, mostly in the for-profit category but non-profits still represent about 60 percent of certified hospices. Volunteers continue to be an important component of hospice care, but the number of volunteer staff has been on the decline for several years. CMS added a new Tier II survey requirement for a five percent targeted survey of stateidentified hospices most at risk for quality problems. CMS retroactively corrects hospice cap calculations for fiscal years 2003 and Demand letters must be mailed to hospices over the cap by July 31, CMS announces it will begin paying hospices based on site of service for the general inpatient and inpatient respite levels of care rather than the location of the hospice, effective January 1, President Bush s budget includes a proposed permanent reduction of 0.65 percent in the hospice payment update each year. The OIG issues a report, Medicare Hospices: Certification and Centers for Medicare & Medicaid Services Oversight in which it is critical of the efforts CMS has expended in its oversight responsibilities. CMS responds that it is increasing its oversight activities, and Acting Administrator Leslie Norwalk testifies before the U.S. House of Representatives Committee on Ways & Means that the agency is concerned about what we ve been seeing in hospice with lengths of stay varying tremendously in various parts of the country. She also states hospice is not intended to be used as a nursing home. CMS anticipates a savings of $0.6 billion through the use of increased targeted medical review. CMS issues a major revision of the Hospice Conditions of Participation (COP) that include major changes to help improve the quality of care provided to hospice patients. Included in the COP was the requirement that Medicare hospice implement a Quality Assessment and Performance Improvement (QAPI) program to help track the quality of care provided. The Patient Protection Affordable Care Act (P.L ) enacted several changes and in the Medicare hospice program that will be imposed over several years time, including refinement of the payment mechanism and a move forward public reporting of hospice quality measures. P.L also required that hospice patients on services for 180 days or longer have periodic face-to-face meetings with a hospice physician or hospice nurse practitioner (NP) to ensure continuing eligibility for care. The legislation also required states, under Medicaid and SCHIP, to allow children on hospice care to receive concurrent with hospice curative services. HAA/NAHC continues to work with the Congress, CMS and other public and private organizations to ensure comprehensive hospice services remain a viable choice for patients at the final stage of life. CMS begins collection of hospice data in anticipation of future public reporting of hospice quality measures. CMS releases initial data collection to assist with revisions to the hospice payment system; CMS also publishes some initial ideas on how the hospice payment system might be modified.

7 2014: CMS expands collection of hospice data on claims; expands collection of data as part of Hospice Quality Reporting Program (HQRP) and launches Hospice CAHPS survey instrument. CMS also overhauls hospice cost report requirements. CMS improves prior authorization requirements on Part D prescription medications for patients on hospice care. References: Hospice Association of America Facts & Statistics, Hospice Forum, CaringMagazine, November 1990, Volume IX, No. 11.

CRS Report for Congress Received through the CRS Web

CRS Report for Congress Received through the CRS Web Order Code RS20386 Updated April 16, 2001 Medicare's Skilled Nursing Facility Benefit Summary Heidi G. Yacker Information Research Specialist Information