MedPAC Recommends No Hospice Increase for FY2017

As expected, the Medicare Payment Advisory Commission (MedPAC) has recommended no raise next year for hospice because they believe hospice payments are too high. MedPAC staff estimate the profit margin for hospice providers in 2016 will be 7.7 percent, way too high for them (as compared with an estimated margin of 8.6 percent in 2013).

The Commission plans to meet in January to finalize its recommendations. MedPAC also plans to monitor the redistribution impact of the payment reform changes scheduled to go into effect on January 1, 2016, as part of future payment adequacy discussions. MedPAC staff indicated the following happened in the hospice industry between 2013 and 2014:

  •  The supply of hospices increased by 4 percent (driven by an increase in for-profit providers)
  •  The percent of Medicare dependents using hospice increased by a 0.5 percentage point;
  •  The number of hospice users increased by 9,000
  •  Length of stay remained stable
  •  The hospice live discharge rate dropped by 0.8 percentage points
  •  Access to capital appears to be adequate

To read a related article about the MedPac report, check the link on the cover sheet.