Hospices must pay millions

Oklahoma hospices must return millions in Medicare funds because their terminally ill patients lived too long.

Nationwide, hundreds of hospices in 25 states owe almost $200 million to the Centers for Medicare and Medicaid Services for care they have provided to dying patients, according to the National Alliance for Hospice Access, a group that formed in March to change the cap on hospice payments.

Increasing numbers of patients with illnesses other than cancer are staying longer, forcing many of the state's hospices to exceed the cap and driving some into bankruptcy, experts say.

Also, cancer patients are living longer, although they aren't necessarily seeking hospice care early in their illnesses. Because cancer mortality is considered more predictable than that associated with ailments such as Alzheimer's or chronic obstructive pulmonary disease, determining a person's remaining days can be challenging.

To receive hospice care, a patient must agree to forgo curative treatment, and two doctors must certify that the person has no more than six months to live. Patients are certified for hospice upon admission, every 90 days for six months, and then for an unlimited number of 60-day periods thereafter. In 2006, more than 1.2 million Medicare beneficiaries and their families received hospice care.

A hospice's reimbursement is subject to an annual spending cap, which is retroactively calculated based on a federally set amount and the number of patients the hospice served. The cap is not geographically adjusted and is about $20,000 per patient.

Payments from Medicare that exceed the cap must be refunded. Medicare began paying for hospice care in 1983, and Congress in 1998 expanded hospice benefits beyond cancer.

Lois Armstrong, president of Oklahoma and Arizona hospice Sojourn Care and a founder of the hospice access alliance, said her family-owned hospice is among those facing potential financial ruin under the cap. Sojourn is based in Tulsa and serves 21 counties within an 80-mile radius of the city.

She said the cap was a result of the Medicare agency reaching out to potential hospice recipients.

"These are the people that are dying of all the things Americans are dying of,” she said. "The cap absolutely penalizes hospices and patients when people take too long to die.”

Sojourn owes about $2 million — almost 20 percent of its reimbursement — for exceeding the cap. "We don't have $2 million. We spent it taking care of patients who were medically eligible,” Armstrong said.

The Medicare agency provided Oklahoma hospice cap statistics but declined to comment further, citing a lawsuit Sojourn filed against it earlier this year.

"Only a very small percentage of hospices exceed the cap,” agency spokeswoman Mary Kahn said in an e-mail.

However, agency officials have argued that many people stay much fewer than 180 days, giving hospices room for longer stays.

David Daucher, a partner in Sojourn and the hospice access alliance, said the "narrow” lawsuit is specific to Sojourn's repayment and is not a legal attack on the cap. The lawsuit is pending.

Armstrong said meticulous standards exist for admission to hospice programs. A dementia patient at Sojourn, for example, must have very limited brain function and have a "comorbid” condition such as an upper urinary tract infection or a pressure ulcer.

"It's based on medical evidence,” she said. "I'll tell you, Alzheimer's patients are mighty unpredictable.”

Before the standards were in place, doctors were reluctant to refer patients with diseases other than cancer to hospice care, she said.

Daucher said the cap results in care-rationing.

One way hospices do this is by limiting the number of patients with diseases other than cancer or those who previously have had hospice care. For Sojourn, this is not an option, Daucher said.

"It really just cuts the heart out of who you are,” he said, adding that patients with diseases other than cancer often are the oldest and most frail. "We have no idea how long they're going to stay. What we know is: Are they eligible?”

Cancer patients make up about a quarter of Sojourn's caseload, he said.

Armstrong, who has 19 years of hospice experience, pointed to a 2007 Duke University study that found hospice care during a patient's last year of life saves $2,309.

"Hospice is the rare situation in which something th