When hospice patients don't die quickly enough, Medicare comes knocking

Some years ago, the Medicare program proposed to recoup hospice payments if a patient didn't die within 6 months, which was the probable life-expectancy that a physician had to certify for a patient to receive the Medicare hospice benefit. As I recall, that proposal was met with howls of protest and dropped.

What Medicare couldn't do directly, however, it is now doing indirectly, as described in an article in today's New York Times. With an annual cap on total hospice payments ($21,470 [slightly less than six months of daily payments of $135] x the total number of hospice patients served in a year), Medicare can recoup "excess" payments from any hospice that received reimbursement from the program above the annual cap. In some cases, the amount of recoupment is in the high six figures. The hardship on hospice programs is palpable -- most don't have the kind of profit margins that allow them to pay back to Medicare a year or more after the money has been spent on salaries, supplies, and other overhead.

Part of the problem for some hospices may be bad patient mix (i.e., not enough terminal cancer patients with more predictably short life expectancies), and there may be management issues, as well. But shouldn't there be a better solution to this problem than penalizing hospices whose patients don't die fast enough to satisfy federal regulations? As one physician is quoted in the article, "Doing this for 40-something years, every time I think somebody is going to die tomorrow, damned if they don’t live for a year and a half." Do we really want to have a federal policy that regards that result as a failure?