South Florida Hospital News
Friday May 14, 2021

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November 2015 - Volume 12 - Issue 5


Understanding Hospice Reimbursement, Regulations and its Effect in Preventing Hospital Readmissions

Hospice care continues to be one of the most valuable benefits in the U.S. healthcare system. That is evident as the reimbursement regulatory environment evolves and aligns with payor and patient incentives more and more. 

“The hospice industry couldn’t be any stronger right now and it’s being driven by the alignment of patient focused, outcome-based value driven through reimbursement changes occurring within the healthcare industry,” says Nick Westfall, executive vice president and COO for VITAS, the country’s largest hospice and palliative care provider. “CMS and the healthcare industry continue to build awareness around the economic and quality of care improvements - which is what appropriate, compassionate hospice care provides for patients and families.”
Westfall points to multiple past studies, including ones from the Journal of the American Medical Association, Mount Sinai Hospital and Duke University, which consistently concluded that appropriate election of the hospice benefit results in lower incurred costs for the medical system, along with a reduction in hospitalizations and readmissions.
“Funding of hospice and palliative care services should continue to be strong,” says Westfall. “If you were to remove the hospice benefit, inevitably it would cause an increase in overall medical expenses. Today, there’s sufficient funding for mature hospice companies to provide the full comprehensive suite of services required under the statute.”
While hospice has been and will continue to be heavily regulated, Westfall believes this helps promote consistency across the hospice industry and ensures it will always be patient and family focused so every patient has the opportunity to receive high-quality, comprehensive care by all hospice providers.
“At VITAS, we really pride ourselves in being in full compliance with all of the regulations across the industry everyday as well as being in compliance on day one with new regulations,” he says. “As an organization, and being the leader and the largest player in the industry, we strongly support the current regulatory environment, and we encourage CMS to continue to evolve the regulatory landscape to focus on quality of care and value based outcomes.”
Recent broader reimbursement changes across the healthcare industry have allowed providers to further align the cost benefit toward the medical decision process for patients they service. This has resulted in the need for providers to take on risk for a portion of their traditional reimbursement.
“For the majority of those providers, the patients who represent the greatest risk are situated outside the four walls of their institution, traditionally in a homecare setting, nursing home setting, or assisted living setting,” says Westfall.
Healthcare providers like VITAS whose expertise is caring for patients in an outpatient, decentralized location can really provide significant value to the outcome measures of those organizations taking on risk. The overall reimbursement changes in the healthcare environment have increased the awareness around the benefit of both palliative and hospice services. Westfall sees the reimbursement changes in the overall healthcare industry as positive toward building awareness around the value of the hospice and palliative benefit.
“Where we drive to create value is through a multifaceted, interdisciplinary approach which is to partner with the referring organization as soon as that patient is discharged to ensure a smooth, timely transition allowing us to initiate the appropriate care for the patient,” he explains. “If that patient is not hospice-appropriate at that time, but requires some palliative oversight, we can assist through goals of care conversations, advanced directive assistance, and/or direct oversight of palliative symptom management. That establishment of their goals of care and aligning our plan of care to those goals really helps increase patient satisfaction and reduce the likelihood of that patient unnecessarily deciding to visit the emergency room or readmit.”
If the patient is hospice eligible, and elects the hospice benefit, mature large hospice companies provide comprehensive care through an interdisciplinary team approach to create an individualized plan of care for the patient. A hospice organization which is able to effectively manage an individualized plan of care while offering the full complement of hospice services (routine and high acuity services during periods of crisis) dramatically reduces the likelihood patients on service would revoke the hospice benefit which a patient can do at any time if they are unhappy with the care.
On January 1, 2016, the hospice industry undergoes reimbursement change that alters the flat per day reimbursement it received historically to a two-tiered system. Hospices will be paid a higher rate for the first 60 days of hospice care and a lower rate for subsequent days in hospice care. In addition, a service intensity add-on (SIA) payment will be made for patients receiving visits conducted by an RN or social worker during the last week of life when patients and families have more intensive needs.
“These changes are a positive step in the direction of CMS aligning costs of providing care to the reimbursement that we receive for doing so,” says Westfall. “We see these changes as positive for the overall industry and positive for the direction and understanding that CMS has for the value of the hospice benefit.”
No matter what changes occur in the industry now or in the future, one thing that will never change for VITAS is that patients and families will always come first.
“The mission that patients and families come first is the most important value we instill as an organization,” Westfall emphasizes. “and in order for that approach to follow through at the bedside it all starts with ensuring you have the high quality, compassionate caregivers who are dedicated to our patients and families. I couldn’t be more proud of each and every one of our employees, as their passion is what makes VITAS such a special organization through the value we provide daily to each and every patient and family.”
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