Department of Health and Human Services 
OFFICE  OF 
INSPECTOR  GENERAL 
HOSPICE  PATIENTS  IN  NURSING  HOMES 

JUNE  GIBBS  BROWN 
Inspector  General 
SEPTEMBER  1997 
OEI-05-95-00250  OFFICE  OF INSPECTOR  GENERAL 
The  mission  of the  Office  of Inspector  General  (OIG),  as mandated  by Public  Law  95 
452, is to protect  the  integrity  of the  Department  of Health  and  Human  Services 
programs  as well  as the  health  and  welfare  of beneficiaries  served  by them.  This 
statutory  mission  is carried  out  through  a nationwide  program  of audits,  investigations, 
inspections,  sanctions,  and  fraud  alerts.  The  Inspector  General  informs  the  Secretary 
of program  and  management  problems  and  recommends  legislative,  regulatory,  and 
operational  approaches  to  correct  them. 
Office  of Evaluation  and  Inspections 
The  Office  of Evaluation  and  Inspections  (OEI)  is one  of several  components  of the 

Office  of Inspector  General.  It conducts  short-term  management  and  program 

evaluations  (called  inspections)  that  focus  on issues  of concern  to  the  Department,  the 

Congress,  and  the  public.  The  inspection  reports  provide  findings  and 

recommendations  on the  efficiency,  vulnerability,  and  effectiveness  of departmental 

programs. 

OEIs  Chicago  Regional  Office  prepared  this report  under  the  direction  of William  C. 

Moran,  Regional  Inspector  General,  and  Natalie  Coen,  Deputy  Regional  Inspector 

General.  Principal  OEI  staff included: 

REGION  HEADOUARTERS 

Thomas  Komaniecki  Stuart  Wright 

John  Traczyk  Barbara  Tedesco 

Margarita  Rodriguez  Brian  Ritchie 

Edward  Sczempruch  Linda  Moscoe 

To  obtain  a copy  of this report,  call the  Chicago  Regional  Office  at  (312)  353-4124 
 EXECUTIVE  SUMMARY 
PURPOSE 
To  examine  eligibility,  services  and  growth  in the  number  of hospice  patients  living in 
nursing  homes. 
BACKGROUND 
Hospice  care  is an  approach  to treatment  that  recognizes  the  impending  death  of an 
individual  warrants  a change  in focus  from  curative  to palliative  care.  The  Medicare 
hospice  benefit  began  in  1983.  In  1986, nursing  home  patients  could  elect  Medicares 
hospice  benefit.  Congress  repealed  the  hospice  benefits  210 day limit  effective  for 
services  furnished  on  or after  January,  1 1990. 
Earlier  Office  of Inspector  General  work  on nursing  home  patients  raised  questions 
about  hospice  services  provided  to these  patients.  This  earlier  work  led  to  our 
undertaking  this  study. 
FINDINGS 
Lower  frequency  of services, the overlap  of services and the questionable  enrollment 
in hospice by nursing home  patients  suggest that current  payment  levels for hospice 
care  in nursing homes  may be excessive. 
Nursing  home  hospice  patients  received  nearly  46 percent  fewer  nursing  and  aide 
services  from  hospice  staff  than  hospice  patients  living  at home.  Three  out  of four 
patients  received  only basic  nursing  and  aide  visits.  Many  of these  services  were  also 
provided  by the  nursing  home  staff when  hospice  staff were  not  present.  Yet,  hospices 
get paid  the  same  amount  for nursing  home  patients  as they  receive  for  patients  living 
at home.  In  addition,  two different  sets  of medical  reviewers  disagreed  with  the 
hospices  initial  prognosis  in nearly  one  out  of six patients. 
Continued  growth in Medicare  hospice expenditures  for nursing home  patients  is 
expected. 
In  1995, we estimate  that  17 percent  of Medicare  hospice  patients  lived  in a nursing 
home.  About  1 percent  of nursing  home  patients  in  1996 elected  the  hospice  benefit. 
Nursing  home  patients  are  seen  by hospices  as an  effective  way of expansion.  The 
repeal  of the  210 day limit  on hospice  care  also  provided  hospices  with  additional 
incentives  to serve  nursing  home  patients.  RECOMMENDATION 
Medicares  hospice  benefit  was intended  to allow  patients  a choice  in determining  the 
intensity  of medical  care  in their  last  6 months  of life.  Since  1986, hospice  patients 
could  receive  hospice  care  either  in their  home  or  a medical  facility,  including  nursing 
homes.  This  inspection  revealed  problems  and  raised  potential  questions  about 
hospice  care  provided  to nursing  home  patients.  Hospices  receive  the  same  daily 
reimbursement  from  Medicare  for  nursing  home  patients  as they  would  receive  for 
patients  living  at home,  even  though  hospices  provide  fewer  services  in the  nursing 
home  setting. 
The  inspection  also  raised  questions  about  the  potential  for  growth  in Medicare 
expenditures  for  nursing  home  patients.  It also  identified  incentives  which  may 
financially  reward  hospices  for  premature  elections  by patients  of the  hospice  benefit. 
The  Balanced  Budget  Act  of  1997, enacted  after  publication  of our  draft  report, 
begins  to  address  some  of these  problems  by requiring  periodic  recertification  of 
eligibility. 
To  address  our  findings,  we recommend  that  the  Health  Care  Financing 
Administration  (HCFA)  seek  legislation  to: 
Modify  Medicare  or Medicaid  payments  for  hospice  patients  living  in nursing 
0 
homes. 
These  modifications  can  include  but  are  not  limited  to lowering  hospice  payments  for 
patients  who  reside  in nursing  homes  or revising  requirements  for  services  provided  by 
nursing  homes  for  terminal  patients. 
We  suggest  that  representatives  from  the  nursing  home  and  hospice  industry  along 
with  HCFA  work  in a collaborative  manner  to  develop  additional  options  to preserve 
and  enhance  hospice  care  for  those  who  need  it when  living in a nursing  home. 
AGENCY  COMMENTS 
We  received  comments  from  the  Health  Care  Financing  Administration,  the  Assistant 
Secretary  for  Planning  and  Evaluation  and  the  Assistant  Secretary  for  Management 
and  Budget.  We  also  solicited  and  received  comments  on  the  draft  report  from  the 
National  Hospice  Organization  and  the  Hospice  Association  of America.  We  have 
made  changes  based  on these  comments  and  have  consolidated  our  first  three  draft 
findings  into  one. 
An  underlying  theme  to the  comments  was a belief  that  it was inappropriate  to 
recommend  eliminating  Medicares  hospice  benefit  for  patients  living  in nursing 
homes.  However,  there  was general  agreement  on the  need  to examine  Medicare  and 
Medicaid  payment  for  hospice  patients  living in nursing  homes  and  to  clarify  the 
future  role  of nursing  home  staff in providing  palliative  care  for  patients  with  terminal 
ii  diagnoses. 
We have  changed  our  first  recommendation  to remove  the  suggestion  of eliminating 
entirely  Medicare  or Medicaid  funding  but  to reflect  that  some  modification  of the 
hospice  benefit  for  patients  living in nursing  homes  is necessary.  In  addition,  as noted 
earlier,  legislation  was enacted  to  address  a second  recommendation  which  we had 
included  in our  draft  report  on modifying  the  current  benefit  structure  in the  fourth 
benefit  period.  Because  of this, we have  dropped  this  recommendation  from  the  final 
report. 
The  full text  of the  comments  received  on  this report  are  included  in Appendix  C. 
While  they  sometimes  take  issue with  our  own  analysis,  we believe  they  provide 
valuable  insights  on  the  hospice  program  and  nursing  home  care.  We  regard  them  as 
an integral  part  of the  report  and  recommend  them  to the  attention  of the  reader. 
... 
111  TABLE  OF  CONTENTS 
PAGE 
ExEcIuTIvEsuMMARY 
INTRODUCTION..  ...............................................  1 

6 

FINDINGS  ...................................................... 
.............  6 

Hospice  payments  for  nursing  home  patients  may be  excessive 
 
.....................  9 

Continued  growth  in hospice  expenditures  expected 
 
RECOMMENDATION  ............................................  13 

APPENDICES..  ................................................... 
A-l 
A:  Methodology  ................................................ 
...........................................  B-l 
B:  Confidence  Intervals 
............................................  C-l 
C:  Agency  Comments  INTRODUCTION 
PURPOSE 
To  examine  eligibility,  services  and  growth  in the  number  of hospice  patients  living  in 
nursing  homes. 
BACKGROUND 
Hmpice  Care 
Hospice  care  is an  approach  to treatment  that  recognizes  the  impending  death  of an 
individual  and  warrants  a change  in focus  from  curative  to  palliative  care.  The  goal  of 
hospice  care  is to help  terminally  ill individuals  continue  life with  minimal  disruption 
to normal  activities  while  remaining  primarily  in a home  environment. 
The  Medicare  hospice  benefit  began  in  1983.  To  qualify,  a patient  must  be  eligible  for 
Medicare  and  be  certified  as terminally  ill with  a life expectancy  of 6 months  or less if 
the  terminal  condition  runs  its normal  course.  Medicare  recognizes  four  levels  of 
hospice  care:  routine  home  care,  continuous  home  care,  general  inpatient  care  and 
respite  care.  The  vast  majority  of patients  enrolled  in hospice  receive  routine  home 
care. 
In most  cases  Medicare  pays  the  hospice  a fixed  amount,  depending  on  the  level  of 
care  a patient  needs,  for  each  day that  a patient  is under  their  care.  Medicare 
expenditures  for  hospice  care  have  increased  significantly  from  $77 million  in  1986, 
when  the  benefit  was permanently  established,  to more  than  $1.8 billion  in  1995. 
Currently,  Medicares  hospice  benefit  provides  a patient  with  four  benefit  periods. 
The  first  period  and  subsequent  period  are  limited  to 90 days each.  The  third  benefit 
period  is limited  to  30 days.  A fourth  benefit  period  is unlimited  in duration.  If a 
patient  revokes  their  hospice  election,  the  patient  loses  his or her  remaining  days in 
that  hospice  benefit  period.  If a patient  revokes  their  hospice  election  in the  fourth 
benefit  period,  the  patient  would  no  longer  be  eligible  for  Medicares  hospice  benefit. 
Medicare  patients  enrolled  in the  hospice  program  waive  coverage  of all curative 
medical  services  related  to the  treatment  of their  terminal  illness.  The  hospice 
assumes  responsibility  for  all of the  patients  medical  needs  related  to their  terminal 
illness.  However,  Medicare  will continue  to pay for  services  furnished  by the  patients 
non-hospice  attending  physician  and  for  the  treatment  of conditions  unrelated  to the 
terminal  illness. 
1 
 Hospice  Care in Nursing Homes 
Beginning  in  1986, terminally  ill Medicare  patients  living  in nursing  homes  could  elect 

Medicares  hospice  benefit.  When  this  occurs,  the  hospice  assumes  responsibility  for 

the  professional  management  of the  patients  medical  care  for  the  terminal  condition. 

The  nursing  home  continues  to provide  the  patients  room  and  board  and  other 

services.  Room  and  board  includes  personal  care  services,  assistance  in the  activities 

of daily  living,  socializing  activities,  administration  of medication  and  other  activities. 

When  a patient  is entitled  to both  Figure  1 

Medicaid  and  Medicare,  the 

nursing  home  no  longer  bills the 

State  Medicaid  program  for  that 
plow  Chart for Medicare  / Medicaid  Payment  for 
patients  long-term  care.  Instead, 
Hospice  Patients Residing  in Nursing  Facilities 
the  nursing  home  bills  and  receives 
payment  from  the  hospice.  The 
hospice  then  bills  the  State 
Medicaid  agency  for  the  patients 
room  and  board.  The  State 
Medicaid  agency  must  pay  the 
l%using 
hospice  at least  95 percent  of what 
Hame 
Medicaid  would  have  paid  the 
nursing  home.  The  hospice  pays 
the  nursing  home,  depending  on 
the  terms  of the  contract  that  exist 
between  a nursing  home  and 
hospice,  for  services  provided  to 
the  hospice  patient.  Medicaid 
payments  for  room  and  board  are  in addition  to Medicares  daily  fixed  rate  paid  to the 
hospice.  Figure  1 illustrates  how  payments  are  made  for  nursing  home  care  provided 
to patients  who  are  dually  entitled  to both  Medicare  and  Medicaid. 
Ojjice of Inspector General Wodc 
Earlier  Office  of Inspector  General  (OIG)  work  on nursing  home  patients  raised 
questions  about  hospice  services  provided  to these  patients.  This  earlier  work  led  to 
our  undertaking  this  study. 
In  1995, a joint  initiative  referred  to as Operation  Restore  Trust  (ORT)  was 
established  between  OIG,  the  Health  Care  Financing  Administration  (HCFA)  and  the 
Administration  on Aging.  Among  its objectives,  Project  ORT  seeks  to identify 
vulnerabilities  in the  Medicare  program  and  develop  solutions  that  would  reduce 
Medicares  exposure  to fraud,  abuse  and  waste.  Project  ORT  targeted  five States 
(California,  Florida,  Illinois,  New York  and  Texas)  that  account  for  approximately  40 
percent  of Medicare  expenditures  and  beneficiaries.  These  projects  focus  on  home 
health  care,  nursing  home  care,  durable  medical  equipment  and  hospice  care. 
2  In  1994, OIG  conducted  reviews  in Puerto  Rico,  examining  medical  eligibility  for 
hospice.  These  targeted  audits  were  expanded  under  Project  ORT  and  led  to in-depth 
OIG  audits  of  12 hospice  providers  and  a summary  report.  In conjunction  with  these 
targeted  hospice  reviews,  additional  OIG  studies  have  and  are  being  conducted  in an 
effort  to  obtain  national  data  concerning  the  hospice  benefit. 
Recent L&.dation 
The  Balanced  Budget  Act  of  1997 resulted  in numerous  modifications  of Medicares 
hospice  benefit.  These  modifications  ranged  from  changing  how  a hospice  can bill  for 
services  to  a new requirement  for  more  frequent  certifications  of eligiblity  after  180 
days  of hospice  care. 
scope 
We  limited  our  inspection  to nursing  home  patients  receiving  routine  home  care  under 
the  hospice  benefit  in December  1995.  An  analysis  of our  data  showed  that  94 
percent  of hospice  patients  received  routine  home  care.  Our  findings  do not  relate  to 
those  few hospice  patients  receiving  either  continuous  home  care,  general  inpatient 
care  or respite  care.  In our  inspection,  we also  limited  our  discussion  primarily  to 
services  provided  to the  patient.  Our  reviewers  did capture  visits made  by hospice 
staff  to family  members  which  we have  reported  but  do not  make  judgements  about. 
METHODOLOGY 
Sampling Design 
We used  a stratified  cluster  sample  to select  hospices  and  hospice  patients.  We 
identified  hospices  that  were  Medicare  certified  before  July  1, 1995.  We  eliminated 
hospices  from  our  universe  where  there  was previous  or continuing  OIG  work. 
We  used  six strata.  One  stratum  was created  for  each  of the  five Project  ORT  States. 
The  sixth stratum  contained  all of the  remaining  States.  From  each  stratum  we 
selected  six hospices  at random. 
Initial Sample 
We  sent  each  hospice  a letter  requesting  that  they  identify  all Medicare  patients  who 
received  hospice  services  in December  1995.  We  also  requested  that  the  hospices 
identify  whether  patients  were  entitled  to Medicaid  and  whether  patients  were 
residents  of a nursing  home. 
We  received  responses  from  31 of the  36 hospices  selected.  Of the  five missing 
responses,  two hospices  were  identified  as sites included  in other  OIG  work.  One  was 
sold  and  notified  us that  they  could  not  provide  the  documentation  within  our  time 
frame.  One  hospice  did respond  with  information  but  it was received  after  our 
3  deadline.  After  repeated  attempts,  we did not  receive  any information  from  the  fifth 
hospice. 
Our  sampling  frame  was patients  receiving  routine  home  care  during  December  1995. 
A total  of  1,592 patients  were  initially  identified  as having  received  at least  1 day of 
hospice  care  during  December  1995.  Of these  patients,  329 were  identified  as living in 
a nursing  home  while  receiving  hospice  services.  Of the  31 hospices  in our  sample,  22 
had  patients  who  lived  in a nursing  home  while  receiving  hospice  services.  See 
Appendix  A for  further  information  on our  methodology. 
After  obtaining  claims  information  on patients  identified  by the  hospice,  we refined 
our  sample  by eliminating  patients  who  received  services  other  than  routine  home  care 
from  hospice.  This  resulted  in 94 patients  being  dropped  from  our  universe  of  1,592 
patients.  This  also  reduced  the  number  of nursing  home  patients  in our  sample  from 
329 to  315. 
Medical  Revkw  Sample 
For  hospices  with  35 or fewer  patients  living in nursing  homes,  we selected  all of their 
nursing  home  patients  for  medical  review.  For  hospices  that  had  36 or more  patients 
living in nursing  homes,  we selected  35 patients  at random.  This  selection  process 
resulted  in the  identification  of 262 patients  for  medical  review. 
We  sent  a second  letter  to  each  hospice  requesting  the  complete  medical  record  for 
each  of their  patients  in our  final  sample  of 262 patients.  We  also  sent  letters  to the 
nursing  homes  where  these  sampled  patients  resided  requesting  the  nursing  homes 
complete  medical  record  for  each  of their  patients.  We  also  requested  and  received  in 
most  cases  copies  of contracts  between  hospices  and  nursing  homes,  invoices  and 
receipts  for  care  and  supplies  provided  to  our  sampled  patients. 
For  the  hospicess  medical  records,  we had  a 100 percent  response  rate.  Our  response 
rate  from  the  nursing  homes  was 79 percent.  We  submitted  208 complete  medical 
records  (both  nursing  home  and  hospice  medical  records)  to our  medical  review 
contractor.  After  the  contractors  review  and  additional  review  of our  own, a final 
sample  of 200 patients  was used  for  most  of our  analysis. 
We  used  a medical  review  contractor  to  examine  hospice  and  nursing  home  medical 
records  to  determine  eligibility.  In selecting  our  medical  review  contractor,  we wanted 
to  ensure  that  the  contractor  used  staff  familiar  with  hospice  and  hospice  philosophy. 
The  first  level  reviewers  were  nurses  who  had  previous  experience  either  in hospice  or 
nursing  homes.  The  second  level  reviewers  were  physicians  in specialties  related  to  a 
patients  diagnosis  and  who  had  referred  their  own patients  for  hospice  care.  The 
medical  review  contractor  also  examined  the  frequency,  type  and  nature  of services 
provided  by hospice.  We  asked  the  medical  review  contractor  to  determine  whether 
nursing  home  services  to patients  changed  after  election  of hospice.  In  addition,  we 
asked  the  contractor  to  determine  if the  services  provided  by hospice  staff  could  have 
4  been  provided  by the  nursing  home  staff. 
For  all patients  that  were  determined  to be  ineligible  for  the  hospice  benefit,  we had  a 
second  medical  review  conducted  by the  medical  reviewers  for  Medicares  Regional 
Home  Health  Intermediary  responsible  for  the  hospice  servicing  the  patient. 
In addition  to  obtaining  hospice  and  nursing  home  records,  we spoke  in person  or by 
phone  with  20 hospice  providers  in our  sample.  We  also  spoke  with  79 nursing  home 
providers  where  these  sampled  patients  lived.  These  discussions  examined  how  the 
hospice  and  nursing  home  worked  together  and  their  perspectives  on how  hospice 
operates  within  a nursing  home  environment. 
Other 
We  used  a variety  of other  information  in designing  and  performing  the  inspection. 
We  used  HCFAs  Online  Survey  and  Certification  Reporting  System  to identify 
hospice  names,  provider  numbers,  locations  and  participation  dates.  In addition,  we 
used  this  same  source  for  information  on nursing  home  hospice  patient  census  and 
overall  nursing  home  patient  census.  We used  HCFAs  Decision  Support  Access 
Facility  (now  the  Health  Care  Information  System)  to  obtain  individual  claims  for  our 
sample  of hospice  patients  and  for  overall  expenditures  on hospice  by provider.  We 
also  obtained  State  Medicaid  reimbursement  information  for  sampled  patients 
identified  as Medicaid  entitled. 
All  data  reported  is at the  95 percent  confidence  level.  (See  Appendix  B for 
confidence  intervals  on  our  estimates.)  Most  data  presented  in the  report  are  based 
on the  results  of a weighted  sample,  although  non-weighted  data  are  reported.  When 
non-weighted  data  are  used,  we will identify  the  data  as such. 
This  inspection  was conducted  in accordance  with  Quality Standards for  Inspections  as 
developed  by the  Presidents  Council  on  Integrity  and  Efficiency. 
5 
 FINDINGS 
Lower frequencyof services,the overlapof servicesand the questionableenrollment 
in hospice by nursinghome patientssuggestthat currentpaymentlevels for hospice 
care in nursinghomes may be excessive. 
Lowerjkquency of services 
The  National  Hospice  Organizations  Hospice  Services  Guidelines  and  Definitions 
state: 
The same  level, intensity and  mix of hospice services should  be provided  to 
residents of a facility (i.e., nursing home,  hospice residence, group  home)  as 
are provided  to other hospice patients living in their homes. 
Our  sampled  nursing  home  hospice  patients  were  seen  less  frequently  than  NHOs 

guidelines  suggest.  Nursing  home  hospice  patients  were  seen  by  a hospice  nurse  1.5 

times  a week  and  by  a hospice  aide  1.3 times  per  week.  Compared  to  hospice 

patients  living  at  home,  nursing  home  hospice  patients  received  44 percent  fewer  nurse 

visits  and  48 percent  fewer  aide  visits.  (See  Table  2)  Despite  providing  fewer  services 

to  nursing  home  patients,  hospices  are  being  paid  at  the  same  level  they  receive  for 

patients  living  at  home. 

Average number af visits per week per hospice specialty 
Service  NH0  Staffing  Nursing Home  Home  Percent 
Ratios  Patients2  Patients3  IXfferencc4 
:  Nurse  2.0  1.5  2-7  -44% 
:  Aide  1.5  1.3  2.5  -48% 
Social 
:  Watker  .8  .42  .53  +Zl% 
:  Spiritual/ 
Pastoral  ,4  .28  .16  75% 
1 - Derivedfrom NH0  staffing ratios, (Example -average WeIoad  per nurse is 10,patients;a~erage 

nuritber bf visits per week per nurse for all patients is 20 +20 visits/l0 patients  = 2 visits, per week 

.@r patient) 

2 +Based on medical review of nursing home hospice patients 

3 -.OIG national sample of hospice patients 

a-Percent difference between Column 3 and 4 

TABLE  2 
6 
 During  our  review  period  nearly  all of our  sampled  patients  were  seen  at least  once  by 

a hospice  nurse.  In the  rare  instances  where  a patient  was not  seen  by a hospice 

nurse  it was due  to the  patient  dying before  a nurse  could  see the  patient.  For  the 

other  disciplines,  the  number  of patients  who were  seen  at least  once  drops.  For 

example,  38 percent  of nursing  home  hospice  patients  were  not  seen  by an  aide  during 

our  review  period.  Only  half  of the  nursing  home  hospice  patients  were  seen  by a 

spiritual/pastoral  counselor  and  67 percent  were  seen  by a social  worker.  One 

potential  reason  for  fewer  visits by hospice  staff  could  be  that  the  nursing  home  was 

already  providing  many  of the  services  offered  by these  disciplines. 

In addition  to providing  services  to patients,  hospices  also  provide  services  to the 

patients  families.  We  did not  extensively  review  or  analyze  the  services  provided  to 

our  sampled  patients  families.  Our  reviewers  did however  document  the  encounters 

with  the  family  members.  Less than  25 percent  of our  sampled  patients  families  were 

telephoned  or seen  by hospice  staff  in December  1995.  Most  of the  family  contact 

that  did  occur  was done  by hospice  nurses  or social  workers.  We  do not  have 

comparable  figures  for  patients  living  at home. 

Nursing  homes  administrators  that  we contacted  are  beginning  to realize  that  patients 

in their  facilities  may  not  be  getting  the  services  hospices  said  they  would  provide. 

Hospices  promise  additional  support  for  nursing  home  staff,  post  death  bereavement, 

family  support  and  pain  management.  Ten  out  of 79 nursing  homes  we contacted 

claimed  that,  in all too  many  cases, hospices  are  not  providing  these  services  to 

nursing  home  patients. 

Overlapof services 
Three  out  of four  nursing  home  hospice  patients  received  only basic  nursing  and  aide 
visits.  Many  of these  services  were  provided  by nursing  home  staff  as part  of room 
and  board  when  hospice  staff were  not  present.  The  remaining  one  in four  patients 
had  symptoms  that  required  additional  care  beyond  basic  nursing  and  aide  visits. 
While  these  additional  treatments  were  provided  by hospice  staff,  the  nature  of the 
services  provided,  like  nursing  and  aide  visits, were  often  clearly  within  the 
professional  skills possessed  by nursing  home  staff.  Because  the  overall  responsibility 
for  a patients  care  transfers  to the  hospice,  the  hospice  was responsible  for  the 
additional  medical  interventions  provided  to those  patients  who  needed  more  than 
routine  nursing  and  aide  care. 
In many  cases,  the  nature  of services  provided  by hospice  staff, while  appropriate  and 
efficacious  appeared  to differ  little  from  services  a nursing  home  would  have  provided 
if the  patient  was not  enrolled  in hospice.  The  following  examples  can  be  used  to 
illustrate  this  point. 
A female,  age  92, was being  treated  by the  nursing  home  for  bed  sores 
using  a special  mattress.  The  hospice  decided  after  seeing  no  change  in 
the  patients  condition  to try a different  mattress  to resolve  the  problem. 
7  A female,  age  79, was admitted  to hospice  to treat  the  patients  pain. 
Despite  the  hospices  efforts  to  control  her  pain  the  patient  claimed  no 
relief.  The  hospice  arranged  for  a nero/psychological  evaluation  which 
indicated  that  the  patient  used  her  condition  to manipulate  the  nursing 
home  and  hospice  staff.  The  hospice  established  a plan  of care  which 
gave  the  patient  the  appearance  that  she was receiving  more  drugs  to 
control  her  pain. 
A male,  age  81, was examined  and  found  to have  a growth  in the  spleen. 
The  hospice  made  a decision  to treat  the  growth  and  the  pain  associated 
with  the  growth  through  radiation  therapy. 
It is difficult  to  say whether  nursing  homes  would  have  ultimately  made  the  same 
decisions  that  the  hospice  did in providing  additional  services  to these  patients.  In 
most  cases,  the  nursing  home  would  have  taken  some  action  to  address  patient  care 
needs.  Standards  of care  for  nursing  homes  require  that  they  develop  a plan  of care 
to  address  patient  bed  sores.  Consultations  and  other  interdisciplinary  interventions 
are  also  not  unusual  in the  prescriptive  nursing  home  environment  that  requires 
nursing  home  staff  to address  weight  loss and  other  changes  in patient  medical  status 
in the  plan  of care. 
Clearly,  some  of the  medical  interventions  by hospice  reflect  care  options  that 
embodied  the  hospice  philosophy.  Because  of current  nursing  home  regulations, 
nursing  home  staff would  find  it difficult  to provide  some  of these  interventions.  Some 
interventions,  such  as more  one  on  one  contact,  could  be  accomplished  with  additional 
funding  for  such  staff  in nursing  homes.  Other  solutions  would  require  changes  in 
nursing  home  laws, regulations  and  policies.  Today,  nursing  homes  must  address  any 
decline  in a patients  condition  with  a plan  of care  to  address  the  cause.  It would  be 
difficult  for  nursing  homes  to  dismiss  the  physical  deterioration  of a patient  as normal 
disease  progression.  Nursing  homes  must  respond  with  a plan  to  stop  or reverse  the 
deterioration  which  often  involves  hydration,  tube  feedings,  hospitalizations  and  other 
interventions  that  the  hospice  would  not  by law be  required  to undertake. 
Questionable  enrollments 
Based  on two different  sets of medical  reviews,  we project  that  16 percent  of hospice 
patients  living  in nursing  homes  did not  qualify  for  Medicares  hospice  benefit  at the 
time  of their  enrollment.  In some  cases,  the  records  showed  that  patients  did have  a 
terminal  condition  but  were  stable  with  little  sign of deterioration  or decline.  Our 
medical  reviewers  noted  that  while  the  hospice  benefit  may  eventually  have  been 
appropriate,  at the  time  of election,  patients  were  stable  and  the  election  of hospice 
was premature. 
The  questionable  enrollment  of patients  in hospice  care  seems  focused  on  those 
patients  already  living in a nursing  home  before  their  hospice  election.  Additional 
analysis  revealed  that  only  4 percent  of the  hospice  admissions,  where  the  patient 
8  Table 1 
eenntteerreedd   tthhee   nnuurrssiinngg   hhoommee   aafftteerr   tthhee  
hhoossppiiccee   eelleeccttiioonn,,   wweerree   qquueessttiioonnaabbllee..   IInn  
R&den=  of Patient 
ccoonnttrraasstt,,   oouurr   rreevviieewweerrss   qquueessttiioonneedd   2211  
ppeerrcceenntt   ooff  tthhee   hhoossppiiccee   aaddmmiissssiioonnss,,  
Ineligible 
wwhheerree   tthhee   ppaattiieenntt   lliivveedd   iinn  aa  nnuurrssiinngg  
hhoommee   bbeeffoorree   tthheeiirr   hhoossppiiccee   eelleeccttiioonn..   Nursinghome patient before 
MMaannyy   ooff  tthheessee   ppaattiieennttss   wweerree   eennttiittlleedd   ttoo   hospice election  21% 
bbootthh   MMeeddiiccaarree   aanndd   MMeeddiiccaaiidd..  
Nursing home admission after 
hospice election  4% 
AAss  aa  rreessuulltt   ooff  ppaattiieennttss   bbeeiinngg   iinneelliiggiibbllee  
ffoorr   tthhee   hhoossppiiccee   bbeenneeffiitt   aatt  tthhee   ttiimmee   ooff   Source:.OIG 
tthheeiirr   eelleeccttiioonn,,   tthhee   aavveerraaggee   lleennggtthh--ooff-- 
ssttaayy  ffoorr   tthheessee   ppaattiieennttss   iiss  ssiiggnniiffiiccaannttllyy  
lloonnggeerr   tthhaann   ppaattiieennttss   ffoouunndd   eelliiggiibbllee   ffoorr  
hhoossppiiccee   ccaarree..   OOnn   aavveerraaggee,,   iinneelliiggiibbllee  
ppaattiieennttss   rreecceeiivveedd   336699  ddaayyss  ooff  hhoossppiiccee  
ccaarree   ccoommppaarreedd   ttoo   114455  ddaayyss  ffoorr   eelliiggiibbllee   p1laattiieennttss..   IInneelliiggiibbllee   ppaattiieennttss   ssppeenntt,,   oonn   aavveerraaggee,,  
222244  mmoorree   ddaayyss  iinn  hhoossppiiccee   ccaarree   tthhaann   ddiidd  eelliiggiibbllee   ppaattiieennttss..   TThhee   aavveerraaggee   hhoossppiiccee   ccoosstt  ffoorr  
tthhee   iinneelliiggiibbllee   ppaattiieennttss   wwaass  $$3377,,448855  ppeerr   pIjaattiieenntt..  
Continuedgrowthin Medicare hospice expendituresfor nursinghome patientsis 
expected. 
Current Situation 
We  estimate  that  in  1995, 17 percent  of Medicare  hospice  patients  lived  in a nursing 
home  while  receiving  hospice  services.  We  estimate  that  in that  same  year  Medicare 
spent  $215 million  on hospice  care  for  nursing  home  patients.  We  believe  this 
estimate  is conservative  because  we dropped  12 very large  hospices  from  our  sampling 
universe.  These  12 hospices  recently  underwent  separate  OIG  reviews. 
We found  that  the  average  nursing  home  hospice  patient  in our  sample  spent  181 days 
in hospice  care.  This  estimate  is higher  than  data  recently  released  by the  National 
Hospice  Organization  but  nearly  the  same  as data  released  by the  Center  for  Disease 
Control  and  Prevention  (CDC).  The  NH0  data  shows  that  the  average  length-of-stay 
for  nursing  home  patients  in hospice  was 56.3 days in  1995.  A  1992 publication  by 
CDC  estimates  the  average  length-of-stay  for  hospice  patients  living  in nursing  homes 
to be  166 days. 
Our  data  indicates  that  45 percent  of hospice  patients  living  in nursing  homes  are 
entitled  to both  Medicare  and  Medicaid.  Based  on  our  sampled  data,  the  cost for 
patients  entitled  to both  Medicare  and  Medicaid  was, on  average,  $168.83 per  patient 
per  day.  This  cost includes  an  average  Medicare  payment  for  routine  hospice  care  of 
$96.30 per  patient  per  day and  an  average  room  and  board  payment  by State 
Medicaid  agencies  of $72.53 per  patient  per  day. 
9 
 Nursing home mar& 
Potential  growth  in the  number  of hospice  patients  living in nursing  homes  is 
significant.  Since  1986 when  nursing  home  patients  were  allowed  to  elect  Medicares 
hospice  benefit,  the  number  of patients  on hospice  and  living in nursing  homes  has 
steadily  increased. 
A report  examining  the  effects  of the  Medicare  Catastrophic  Coverage  Act  of  1988 
estimated  that  7.7 percent  of hospice  patients  were  living in a nursing  home.  Three 
years  later  the  number  of nursing  home  hospice  patients  increased  to 9.9 percent. 
Moreover,  a 1992 study by the  National  Centers  for  Health  Care  Statistics  estimated 
that  13 percent  of Medicare  hospice  patients  lived  in places  other  than  a private  or 
semi-private  residence.  As noted  previously,  we estimate  that  in  1995, 17 percent  of 
Medicare  hospice  patients  were  living in nursing  homes.  Other  researchers  in this 
area  believe  the  percentage  of hospice  patients  living in nursing  homes  is even  higher 
than  our  estimates. 
The  potential  patient  volume  makes  nursing  homes  ideal  candidates  for  hospice 
marketing  efforts.  In  1995, roughly  1 percent  of nursing  home  residents  were  receiving 
hospice  care.  A  1996 NH0  survey  revealed  that  96 percent  of hospices  surveyed  are 
planning  to begin  or increase  the  number  of nursing  home  patients  served.  Based  on 
current  information,  we expect  the  number  of nursing  home  hospice  patients  to grow 
significantly. 
According  to a presentation  by a hospice,  nursing  home  patients  may  be  the  key  to 
cost  effective  expansion.  This  sentiment  was also  cited  by hospices,  in an  NH0 
survey  on nursing  home  issues,  as one  of the  advantages  in increasing  the  number  of 
nursing  home  patients  served.  Nursing  home  patients  allow  a hospice  to increase  their 
patient  census  and  increase  the  average  length  of stay thereby  increasing  hospice 
revenue. 
Not  surprisingly,  hospices  are  informing  nursing  homes  of the  benefits  the  hospice  can 
provide  to nursing  home  patients  and  nursing  homes  themselves.  Hospices  have 
offered  nursing  homes  the  following: 
0  paying  daily  rates  that  are  the  same  or more  than  the  nursing  home  would  have 
received  from  the  State  Medicaid  agency  for  dually  entitled  Medicare  and 
Medicaid  patients, 
0  allowing  the  nursing  home  to reduce  staff  time  for  hospice  patients,  or 
0  increasing  the  nursing  home  patient  census  by promising  to use  the  nursing 
home  as the  hospices  respite  unit  or admit  patients  to the  nursing  home  whose 
primary  care  giver  can  no  longer  provide  the  care  at home. 
In addition,  hospice  pays  for  durable  medical  equipment,  prescriptions  and  medical 
supplies  related  to the  patients  terminal  illness.  In some  cases,  the  nursing  home 
10 
 would  have  provided  these  items  had  the  patient  not  elected  hospice.  This  can 
potentially  improve  the  financial  condition  of the  nursing  home. 
Unlimited Benejit 
Under  current  incentives,  hospice  directors  can  be  more  permissive  when  making  a 
decision  on whether  to  admit  a patient  under  the  hospice  benefit.  The  repeal  of the 
210 day limit  shifted  the  financial  risk for  patients  living longer  than  210 days from  the 
hospice  to Medicare.  Prior  to the  repeal,  less than  5 percent  of hospice  patients  lived 
beyond  210 days.  In early  1996, approximately  14 percent  of active  patients  had 
length  of stays longer  than  210 days, a considerable  growth  from  before  the  repeal  of 
the  limit. 
Before  the  repeal  of the  210 day limit  for  hospice  care,  hospices  would  have  to 
provide  uncompensated  care  for  patients  who  lived  beyond  210 days  and  continued  to 
require  hospice  care.  The  210 day limit  caused  hospice  directors  to adopt  a very 
conservative,  careful  screening  strategy  regarding  who  to admit  under  the  benefit  and 
when  to  admit  the  patient.  Based  on  a review  of congressional  testimony  prior  to the 
passage  of the  Medicare  Catastrophic  Coverage  Act  of  1988 and  again  prior  to the 
removal  of the  210 day limit,  many  believed  that  only  a small  number  of patients 
would  need  the  additional  benefit  period. 
Number of providers 
The  incentives  in the  nursing  home  market  along  with  the  repeal  of 210 day limit  may 
also  have  contributed  to  an increase  in the  number  of hospice  providers.  In particular 
there  has  been  a substantial  increase  in the  number  of for  profit  providers  entering 
the  market.  Before  1991, the  vast  majority  of hospice  providers  were  non-profit  (See 
Chart  2).  In  1995, while  the  majority  of Medicare  certified  hospices  continue  to be 
non-profit,  the  percentage  of for-profit  hospice  providers  has  risen  to almost  21 
percent  from  7 percent. 
11 
 ProvFidoerr-sP rofit  Hospice  Providers 
Medicare Certified (1983-l 995) 
/ 
2!50-
200-
150-
ioo-
1983198419851988  1987 1988 1989 1990 1991 19921993  19941995 
Years 
chart2 
The  Balanced  Budget  Act  of  1997, enacted  after  we issued  our  draft  report,  begins  to 
address  some  of the  concerns  about  potential  abuses  in the  fourth  benefit  period.  The 
new legislation  requires  that  a hospice  medical  director  recertify  a patients  eligibility 
every  60 days once  a patient  has  been  in hospice  care  for  more  than  180 days. 
12 
 RECOMMENDATIONS 
Medicares  hospice  benefit  was intended  to allow  patients  a choice  in determining  the 
intensity  of medical  care  in their  last  6 months  of life.  Since  1986, hospice  patients 
could  receive  hospice  care  either  in their  home  or a medical  facility,  including  nursing 
homes.  This  inspection  revealed  problems  and  raised  potential  questions  about 
hospice  care  provided  to nursing  home  patients.  Hospices  receive  the  same  daily 
reimbursement  from  Medicare  for nursing  home  patients  as they  would  receive  for 
patients  living  at home,  even  though  hospices  provide  fewer  services  in the  nursing 
home  setting. 
The  inspection  also  raised  questions  about  the  potential  for  growth  in Medicare 
expenditures  for  nursing  home  patients.  It also  identified  incentives  which  may 
financially  reward  hospices  for  premature  elections  by patients  of the  hospice  benefit. 
The  Balanced  Budget  Act  of  1997, enacted  after  publication  of our  draft  report, 
begins  to  address  some  of these  problems  by requiring  periodic  recertification  of 
eligibility. 
To  address  our  findings,  we recommend  that  the  Health  Care  Financing 
Administration  seek  legislation  to: 
a 	 Modify  Medicare  or Medicaid  payments  for hospice  patients  living in nursing 
homes. 
These  modifications  can include  but  are  not  limited  to lowering  hospice  payments  for 
patients  who  reside  in nursing  homes  or revising  requirements  for  services  provided  by 
nursing  homes  for  terminal  patients. 
We  suggest  that  representatives  from  the  nursing  home  and  hospice  industry  along 
with  HCFA  work  in a collaborative  manner  to  develop  additional  options  to preserve 
and  enhance  hospice  care  for  those  who  need  it when  living in a nursing  home. 
AGENCY  COMMENTS 
We  received  comments  from  the  Health  Care  Financing  Administration,  the  Assistant 
Secretary  for  Planning  and  Evaluation  and  the  Assistant  Secretary  for  Management 
and  Budget.  We  also  solicited  and  received  comments  on the  draft  report  from  the 
National  Hospice  Organization  and  the  Hospice  Association  of America.  We  have 
made  changes  based  on  these  comments  and  have  consolidated  our  first  three  draft 
findings  into  one. 
An  underlying  theme  to the  comments  was a belief  that  it was inappropriate  to 
recommend  eliminating  Medicares  hospice  benefit  for  patients  living in nursing 
homes.  However,  there  was general  agreement  on the  need  to  examine  Medicare  and 
Medicaid  payment  for  hospice  patients  living in nursing  homes  and  to  clarify  the 
13  future  role  of nursing  home  staff  in providing  palliative  care  for  patients  with  terminal 
diagnoses. 
We  have  changed  our  first  recommendation  to remove  the  suggestion  of eliminating 
entirely  Medicare  or Medicaid  funding  but  to reflect  that  some  modification  of the 
hospice  benefit  for  patients  living in nursing  homes  is necessary.  In  addition,  as noted 
earlier,  legislation  was enacted  to address  a second  recommendation  which  we had 
included  in our  draft  report  on modifying  the  current  benefit  structure  in the  fourth 
benefit  period.  Because  of this, we have  dropped  this  recommendation  from  the  final 
report. 
The  full text  of the  comments  received  on  this report  are  included  in Appendix  C. 
While  they  sometimes  take  issue with  our  own analysis,  we believe  they  provide 
valuable  insights  on the  hospice  program  and  nursing  home  care.  We  regard  them  as 
an integral  part  of the  report  and  recommend  them  to the  attention  of the  reader. 
14 
 APPENDIX  A 

METHODOLOGY 

A-l  Methodology 
Table  1 describes  the  total  number  of hospices  in our  universe  by the  strata.  The 
table  provides  information  about  number  of hospices  sampled,  number  of hospices 
responding  and  number  of hospices  with  nursing  home  patients. 
Table  1 Number  of Hospice  per  Stratum 
Stratum  Total  Total  number  Total  Number  of 
Number  of  of Sampled  number  of  Hospices  with 
Hospices  Hospices  responding  Nursing  Home 
hospices  Patients 
California  (CA)  140  6  5  3 
Florida  (FL)  36  6  4  3 
Illinois  (IL)  74  6  6  6 
New York  (NY)  53  6  6  4 
Texas  (TX)  104  6  5  3 
Rest  of the  United 
States  (RU)  1,394  6  5  3 
Table  2, on the  next  page,  identifies  by hospice  the  total  number  of hospice  patients, 
number  of nursing  home  patients  if any and  the  number  of complete  medical  records. 
A medical  record  was considered  to be  complete  if information  was received  from 
both  the  hospice  and  nursing  home.  This  number  represents  what  was sent  to our 
medical  records  contractor  and  after  our  own additional  review. 
A-2 
 rable 2  Hos kc/Nursing Home Hospice patientsby Hospice 
December 1995 Census 
Hospice  Number  of  Number  of  Number  of  Complete 
Hospice  Nursing  Home  Sampled  Medical 
Patients  Patients  Patients  Records 
CA-1  35  7  7  7 
CA-2  31  7  7  4 
CA-3  38  32  32  23 
CA-4  32  0  0  NA 
CA-5  0  NA 
:i 
FL- 1  0  NA 
FL-2  35  11 
FL-3  6  4 
FL-4  48  6  6  4 
IL - 1  92  15  15  12 
IL - 2  31  4  4  2 
IL - 3  57  2  2  2 
IL - 4  28  10  10  9 
IL - 5  29  7  7  6 
IL - 6  11  3  3  1 
NY-l  229  58  35  35 
NY-2  105  2  2  2 
NY-3  4  4 
NY-4  14  13 
NY-5  0  NA 
NY-6  0  NA 
TX-l  8  5 
TX-2  0  NA 
TX-3  22  21 
TX-4  35  29 
TX-5  0  NA 
RU-1  0  NA 
RU-2  22  14  4  3 
RU-3  3  0  0  NA 
RU-4  5  2  2  2 
2  1 
A-3 
 APPENDIX  B 

ConfidenceIntervals 
B-l  Variance  and Estimated  Confidence  Inten& 
Estimate 	 Standard 
Error 
Ineligible  patien  .s  16.08%  4.31%  I 7.63%  I 24.53% 
Nursing  home 
admission 
before  hospice 
election  Ineligible  20.78%  4.89%  11.20%  30.36% 
Nursing  home 
admission  after 
hospice 
admission  Ineligible  3.62%  2.85%  0%  9.21% 
Patients  duallv  entitled  44.93%  4.93%  I 35.27%  I 54.59% 
Average  length  of stay for  144.50  22.99  99.44  189.56 
eligible  patients 
I 
Average  length  of stay for 
ineligible  patients  368.70  59.61  I 251.86  485.54 
Average  reimbursement  for 
total  hospice  stay for 
ineligible  patients  $37,485.10  $2903.41  $3 1,794.42  $43,175.78 
Average  length  of stay for 
nursing  home  patient  ~ 180.55  33.00  114.55  246.55 

Percent  Medicare  Patients 

living in a nursing  home  17.17%  5.15%  7.08%  27.26% 

Medicare  daily rate  $96.30  $1.58  7  $93~. 20  ~  I-$99.40
Medicaid  Nursing  Home 

Rate  $72.53  $3.72  I $65.24  $79.82 

B-2 
 APPENDIX  C 

AGENCY  CO-
 DEPARTMENT  OF HEALTH  & HUMAN  SERVICES  Health  Care  Financing  AdmInistratIon 
The Acbministrator 
Washington,  D.C.  20201 
DATE:  JUL 29 1997 
TO: 	 June Gibbs Brown 
Inspector General 
FROM: 	 Bruce C. Vladeck 
Administrator 
SUBJECT: 	 Office of Inspector Gem-al  (OIG) Dra& Report: Hospice Patients in 
Nursing Homes: Eligibility,  Services and Growth,  (OEI-05-95-00250) 
We reviewed the above-referenced  report that examines eligibility,  services, and 
growth 
in the number of hospice patients living in nursing homes. 
Our detailed comments are attached for your consideration.  Thank you for the 
to review and comment on this report. 
opportunity 
Attachment  Comments of the Health Care Financing Administration  (HCFA) on 
Office of Inspector General (OIG) Draft Report: 
Hospice Patients in Nursing Homes: Eligibilitv,  Services. and Growth 
fOEI-05-95-00250) 
OIG Recommendation  1 
Eliminate  or reduce Medicare or Medicaid payments  for hospice patients  living in nursing 
homes. 
HCFA Response 
We concur.  For reasons discussed in the next paragraph,  we suggest you add the 
following  to the reconuner dation: and require nursing homes to provide  end-of-life  care 
as may be needed.  Your report makes a good case for reform of the hospice benefit 
when it is provided to beneficiaries  who reside in nursing homes.  In particular,  the higher 
lengths of stay (LOS) by individuals who were residents of the nursing home at the time 
of hospice  election, and the even higher LOS for individuals  who were eligible for both 
Medicare and Medicaid,  contrasted with the significantly  fewer services received by 
hospice patients residing in nursing homes compared to hospice patients in their own 
homes, lend strong support to reform for the benefit.  Further support for change is 
evident in your finding that approximately  75 percent of the additional  services provided 
by hospices to its nursing home patients were ones that differed little from services a 
nursing home would ordinarily  provide to its residents.  The projected  growth of hospice 
programs providing  services in nursing homes needs to be addressed,  and your 
recommendation  will help at a time when Congress is seeking ways to reduce 
unnecessary  Medicare  expenditures. 
We suggest amending this recommendation  to require nursing homes to provide needed 
end-of-life  care; an important  safeguard for beneficiaries  who actually  may need hospice 
care in a nursing home should the benefit undergo the proposed change.  Currently, the 
law does not explicitly describe this service as a requirementfor nursing homes under 
Medicare or Medicaid, and palliative care would be an appropriatesetice  to offer. 
Your 
report correctly recommends the reduction or ehmination of the hospice benefit in 
nursing homes, but without requiringnursing homes to provide end-of-life care we would 
be  a disservice to our beneficiaries. 
doing 
Earlier this year, HCFA prepareda legislative proposal that would have ended payment 
for hospice for beneficiaries residing in nursing homes, and would require nursing homes 
under Medicare and Medicaid to provide all necessary end-of-life care to its residents. 
Subsequent discussions of this proposal with representatives of the hospice industry and  2 

the Administration  indicate it is unlikely the proposal will be considered  during this 
session of Congress.  However, the discussions found the industry recognizing  and 
agreeing with HCFA that reform of the hospice benefit when provided  to nursing home 
residents  is needed.  HCFA will use the OIG recommendation  as an additional  impetus 
for the changes that need to be made, including the possibility  of lower hospice payments 
for patients  who reside in nursing homes, revising the requirements  for services provided 
by nursing homes, or some other option to preserve this type of care for those who need it 
when living in a nursing home.  HCFA anticipates it will be working with representatives 
of the hospice industry  in the development  of needed legislative reforms  for this part of 
the hospice program. 
Another factor to consider is while many hospice services may be capable of being 
provided by nursing home se  many other hospice services (family  counseling, 
bereavement  counseling,  etc.) probably  are not.  Nursing home stafYmay lack the 
professional  skill and training necessary  to deliver the full range of hospice  services to 
individuals  electing this type of care. 
OIG Recommendation  2 
Modify  the benefit period structure to prevent abuses in the fourth benefit period. 
HCFA Response 
We concur.  We have had a long-standing  legislative proposal to address the problem  of 
the fourth unlimited  benefit period.  Our preference had once been to impose a limit 
(360 days) on the number of hospice days available to any beneficia@ in his or her 
lifetime.  It would have returnedthe hospice admission process to its earlier conservative 
requirement, whereby a hospice would caremy  consider an admission since the ticial 
risk was on the provider if the beneficiary lived beyond the original number of 
210 covered days.  Presently, we have a legislative proposal we believe has a reasonable 
to be considered by Congress that will repeal the third 30day  period and fourth 
chance 
unlimited period, and replace them with an unlimited number of 30day  periods.  There is 
a bill before Congress similar to our legislative proposal, except it provides for an 
unlimited number of 60day  periods. 
We plan to support whichever  proposal Congress accepts, and to implement  it as quickly 
as the law permits.  Other comments: 
0 	 Page 1, Background  section, last sentence, should be revised to read: 
Congress repealed the hospice benefits 210&y  limit, effective for services 
furnished  on or after January  1, 1990.  The Omnibus Budget Reconciliation  &ct 
of 1990 made this change. 
0  Page 1,5th  paragraph,  line 4: Change looses their to loses his or her. 
0 	 Page 1, last paragraph:  You should specify that Medicare patients  enrolled in the 
hospice program waive coverage of all curative medical services related to the 
treatment  of the terminal  illness.  The way it is currently written, the hospice 
patient receives no care at all for a terminal condition. 
0 	 Page 2, first paragraph:  It should be specified that the hospice assumes the 
professional  management  of the patients medical care for the terminal  condition. 
Management  of a patients  other conditions,  unrelated to the terminal condition,  is 
not the responsibility  of the hospice, but of the nursing home.  The only exception 
to this is if the patients  attending physician  is unwilling or unable to prescribe 
care for the unrelated  condition,  at which point the hospice would be responsible 
for that care as well 
0 	 Page  2, 1st paragraph,line 5: Insert personal care services, following the word 
includes.  This is an important room and board service that we want clearly 
presented as a nursing home responsibility. 
0 	 Page 3;Scope  section: You limited your inspection to services provided to 
patients in the nursing home, but not to the patients families.  It would help 
your presentation if you could provide a rationale for that decision, since 
bereavement counseling is a mandatory hospice benefit and a volunteer, 
counselor, or a hospice social worker could presumably be providing such 
services to the patients family at their home.  We doubt the volume of such 
services would alter your findings, but you may wish to remove this as a 
potential issue with a brief explanation for your decision.  Since your 
reviewers examined the hospice records, if significant services had been 
provided to the families, presumably your reviewers would have noted it. 
0 	 Page 4: We suggest you offer some information about the qualifiOati0ns,  trainin& 
or preparationyour medical review contractors had before beginning their 
examination of patient records.  Eligibility for the hospice benefit (physician
- 4 
certification  that the beneficiary  has a terminal illness with a life 
expectancy  of 6 months or less if the illness runs its normal course) is one 
of the most controversial  aspects of the program at this time.  With the 
higher numbers of ineligible patients identified in the report, greater 
credence will be given if the reviewers  credentials  are bolstered by some 
reference to their competence to perform the reviews. 
0 	 Page 6,2nd  paragraph, Eligibility  Rate: You state 73 out of 200 sampled 
patients had 1 of the 4 diseases covered by the National Hospice 
Organization  (NHO) guidelines,  and under these guidelines,  27 percent 
were determined to be ineligible for the benefit at the time of election.  We 
suggest you provide information  about the other 127 patients whose 
diseases were not described in the NH0  guidelines.  This would give us a 
more complete picture of the population  studied, as well as make the study 
more defensible. 
0 	 Page 6: The footnote at the bottom of the page states 1994 as the 
publication  date for the NH0  guidelines.  The correct year is 1995. 
0 	 Page 7, second paragraph:  The $168.83 figure for the combined cost to both 
Medicare and Medicaid for providing hospice care to dual-eligibles  should 
be further specified as a per patient per day figure. 
0 	 Page 8, last paragraph  The word were in the second line should be 
replaced with where. 
0 	 Page 8:-Thedifferential level of services discussed on this page is one of the most 
importantfindings about hospice patients who reside in nursing homes.  Why are 
there so many fewer tic-es  for a patient who resides in a nursing home 
compared to a patient who resides in what is considered a regular home?  Why is 
Medicare paying so much more for so much less?  One reason may be the 
purchase of non-core services by the hospice from the nursing home (see 42 CFR 
418.56).  This is acceptable and the hospice should be able to document its 
purchase in the papers completed to meet the cited requirement. The report should 
deal with these issues to ensure its findings are solid. 
0 	 Page 9, first sentence ending at top of page: It should be specified that one 
reason for fewer visits by hospice staff could be that nursing home staff was 
already providing many of the hospices  services.  5 

0  Page 9: Tied to the comment made above regarding intensity  of services, 
the finding that approximately  75 percent of the hospice patients  in a 
nursing home were receiving services that were clearly  within the 
professional  skills possessed by the nursing home staff, presents, if true, 
another strong indication that this area of the program is in need of change. 
Accordingly,  you may wish to strengthen the explanation  as to why this is 
true. 
0  Page 12, final paragraph:  You report that in early  1996 about 14 percent of active 
patients had lengths of stay exceeding 210 days.  Please cite your source, as it is 
an important  figure that indicates the growth of a program that needs to be 
controlled. 
0  Page B-2, second and third boxes from the bottom: The language should be 
changed to Average length of stay for nursing home hospice patients  and 
Percent Medicare Hospice Patients living in a nursing home, respectively. 
We also would add one final caution.  HCFA does not have comparable bases for some of 
the data and cost estimates presented in your report.  While we do not suggest that any of 
them are inaccurate,  we do urge OIG to make certain that it can substantiate  them.  Ju.221997 
TO:  JlJn8  Gibbs Ehwn 
Inspedor  Gcneml 
FROM:  DavidF. Garrison 
Primlpal  De~utybksktantS8uery 
For Planningd  Evaluation 
sU6JECT 	 010 ropwtentitled,HoapioaPatknts h Nunlnp Homes:EUglb#&y, 
senibg,  and Growth- Condttiod  Concurtonce  Page 2 - .lune Gibbs Brown 
Priorto eliminatingtha hospicebenefitin nursinghomes,we believe the roles and 
nspondbilities of hospiceaand nuning homescaringfor bene6ciarieselecting hospice 
and rwidhg  in nursinghomesshouMbe more cumploWyunderstood. Implicitin a 
recommendationto eliminate8the Mediire  hosplcebe&t  for nursinghome 
residents,is an assumptionthat nuning homesare (or shouldbe) able to provide 
hospiceeeniccs.  However. beforesuch a recommendationis advanced, we believe 
additionalinformationis needed regardingthe: 
.  hoepica  philosophy; 
. 	 ~ioar9  rSql&l?nMh  for providinghospicebenefitsin nokinstttutionaland 
instltuWml setUng8and how, If at alf, the tmpkmentMlonof these requirements 
vrfbe  wow  aettlngu 
  8ewic6 oquirements of hospicepatientsand how these are the same or 
difhmnt fromtypIcalnumingfacilitym&dents; 
.  additIonalvalue, if any, of havtnga hospka (rather than a nursinghome) provide 
end of Ii16care to the terminallyiH; 
. 	 additionalco&s that wouldbe incurrodby nursinghomes (and consequentlythe 
Medbn  and Medladd progmms,and prhratepay patients)if they uww to 
become mspomtbb fvr providing  hospice  cam;  and 
. 	 bwrbn  nursinghomeswouldencwnter in providingend of life care to those 
withterminalillnc6688. 
ASPE is xpkring the fbasibilityof studyingthe Medicare hospicebenefit using 
MedIcam claimsand other data, and interviewsof hospiceend nuning home providers. 
The goal of suoha 8tudyis to produceinformationon:  Page  3 -June Gibbs Brown 
Further,we ara ooncamedthat without more completeinformationaboutthe hospice 
boneltt,how it b used. and paidfor, recommendationsto dlminate  or reduce the 
banefitwill ba parwivad as too draconian. We wouldlike to have an opportunityto 
discussthen  concernswithyou and how our studycouldbe used to Infarmthe currenl 
discussionon hospiceissuae. 
The rsp0~ findsthat hospfcefwtientsIn nursing homes rruive  half the nursingand 
aide ~enrkz~ mti  to horrpicepMidnk livingat home, Thir findingir;based on a 
reviGwof hospiot nMical  recordscomparedwiththe numberof nursingand aMe visits 
m  by tha NationalHospicsOrganization. While the OIG raviewadthe 
medical record8of nun(ng homer and ccWra&  bafwwn nursinghomes and hosp&.s, 
themsdtsoftrll%erwiewa  wafa not pwentad  in the report. Absent a discussionof 
the 8wfces  proMdadby nuning homes,the reader Is M  with the Impressionthat the 
quantityand possiblyquaMyuf hospioacara providedto numinghome patientsis less 
than that providedto other hospim patients. VM understandthat the OIG was r** 
intendingto commenton the quaMyof care reoaiwd by nursinghome hospicepatients. 
Instead,we beti  the OIG was attemptingto ruggest (in part) that Medicare is 
overpaying because tha kwel of effortby hospicestaff is less for nursinghome patients 
than fw other lwspb  pWcn@ despiterecWlng the same Medicare hospicepayment 
amount(plusa Mcdii  add-cmfor dually4gibk  parsons),  We rau)mmefld the 
mportba modifiedtK,pfovldaJnformatkmabout the contra&  between hoclpiceaand 
nursinghomea, nursing  and  aide  sonices  providedby nuning homesto horpica 
patiants,and w  thaI variationsin setvica deliveryas rsportedin medicalrec~rvls for 
hospioepatian& in nursinghomescompand withhospicepatientsnot in nursing 
homer doas not necessarltyrafbct on the qualityor level of cam received by these 
patients. 
The reportdiisw6  howcurrentnuning home nrles wouidhave to be changed and 
nwrkrg home paymantsincreasedto providehospiceswvk@a(p.10). We do not 
baUev0that It ia v  to atatethat nursinghomasmustrespondwitha plan to stop 
or mvuw  tha da#emfaWn by provldingacthrelnterventionr. Wa b&i  that cur?ant 
nurainghomefuk8pennitpatkmtstorafusetr&nMts.  wetacommandthatth@ 
+  fjw&bfj  CucfcMnfursinghame requkenrentt of methg  each paMaM  naeds 
andtheltghtto~aawIcw.  Page 4 -Juno Gibbs Brown 
The repott reoofnmendsthat the hospicebeneilt be modifiedto prevent abuses in the 
fourthberAt  period. However,the reportdoes not prwide informationabout abuses 
in the burtll benent paf&Kl. Instead,the 016 foundthat between (opproxhnatoly)11 
percentand 27 pwEbntof nuning home hospicepatientswem ldlgible  at the time of 
[their]electIon of the hospicebenefit. OIG stafk reportthat many of these initially 
ineliiible personsbecome eligibleever time. Thus, it wouldappear the problemis not 
with the fourth  benefit  period but in8teadwith initial &ligibiMy determinatians.  DEPARTMENT  OF HEALTH  & HUMAN  SERVICES  Office of the Secretary 
Washington, D.C.  20201 
MAY 2 2  1997 
MEMORANDUM  TO:  Office  of the  Inspector  General 
Attention:  George Grob 

FROM: 	 John  J. Callahan 
Assistant  Secretary  for  Management  and  Budget 
SUBJECT: 	 Concur  with  Comment:  Draft  OIG  Report  -- Hospice 
Patients  in Nursing  Homes:  Eligibility,  Services,  and  Growth 
ASMB  has  the  following  comments  with  regard  to this  report: 
1. 	 OIGs  first  recommendation  -- to  reduce  or eliminate  Medicare  or Medicaid 
payments  for hospice  patients  living  in nursing  homes  -- implies  that  HCFA 
should  discourage  covering  hospice  services  in the  nursing  home  setting.  This 
is clearly  not  a policy  the  Department  should  advocate.  For  many  hospice 
patients,  theres  no alternative  but to receive  this  care  in a nursing  facility. 
We  believe  that  OIGs  intent  in offering  this  recommendation  was  to address 
abusive  payment  practices.  For  instance,  in many  cases,  nursing  facilities 
receive  duplicative  Medicare  and  Medicaid  payments  for  hospice  services  they 
provide  to dually  eligible  beneficiaries.  In addition,  the  OIG  described  situations 
in which  a nursing  home  was  paid  for hospice  services  it did  not  provide. 
ASMB  suggests  that  OIG  revise  this  first  recommendation  to address  fraudulent 
and/or  abusive  payment  practices  for hospice  services  provided  in nursing 
homes. 
2. 	 OIGs  second  recommendation  - to  modify  the  current  benefit  period  structure 
to prevent  abuses  in the fourth  benefit  period  - does  not  reflect  recent  fraud 
and  abuse  legislation  HCFA  sent  to the  Congress  to address  this  problem. 
ASMB  recommends  that  OIG  revise  the  language  of this  report  to recognize 
recent  legislation  offered  by HCFA  to address  problems  with  the  fourth  benefit 
period.  This  legislation  would  replace  the  third  and  fourth  hospice  benefit 
periods  with  an unlimited  number  of thirty-day  periods,  each  of which  would 
require  recertification  of a patients  terminal  diagnosis. 
3. 	 OIGs  report  emphasizes  problems  with  the  hospice  eligibility  process,  but only 
offers  recommendations  dealing  with  the  back-end  of the  hospice  benefit. 
ASMB  would  ask the OIG  to consider  including  recommendations  to improve 
hospice  eligibility  determinations  on the  front  end.  -.  NATIONAL HOSPICE 

ORGANIZATION 

August 8, 1997 
The Honorable  June Gibbs Brown 

Inspector General 

Department  of Health and Human Services 

330 Independence  Ave., S.W. 

Room 5246 

Washington,  DC  2020 l-000 1 

Attention: 	 George  F. Grob 
Deputy  Inspector  General 
Office  of Evaluation  and  Inspections 
Dear Inspector  General Brown: 
Thank you for the opportunity to review and respond to a draft of the Office of the Inspector 
General report, Hospice Patients in Nursing Homes:  Eligibility,Services and Growth as 
developed by the Office of Evaluation and Inspections (OEI). I would also like to express 
NHOs appreciation for the cooperative efforts of OEI staff provided our office during the 
development of this report. 
We believe the report serves as a warning that the Medicare Hospice Benefit is more 
vulnerable to waste and abuse when provided to Medicare/Medicaid-eligible  residents of 
nursing homes.  It should be noted, however, that the report suggests only the potential for 
such behavior. 
The report is most useful in underscoring the need to collect additional information regarding 
the nature and cost of hospice care provided in the nursing home.  The development of such 
tiormation  has been a long-standing interest of the National Hospice Organization (NHO). 
As you may know, in January 1993, at NHOs urging, the Chairmen of the House Ways and 
Means and Senate Finance Committees asked the Office of Technology Assessment to study 
hospice care in the nursing home.  Unfortunately, the request was ignored.  If the request had 
been honored we might have the information today to evaluate the payment levels. 
Additionally, over NHOs strong objection, HCFA elimmated cost reports for hospice 
programs years ago, even after NHO, at its own expense, designed proposed new cost reports 
that were more accurate and easier to use. We were pleased to see that legislation reinstating 
cost reports for hospices has recently been signed into law. 
1901 N.  Moore  Street 
Suite  901 
Arlington,  VA 22209 
7031243-5900 
7031525-5762  fax 
http:llwmv.nho.org  We clearly agree with the recommendation to modify the current benefit period structure of 
the Medicare Hospice Benefit. NH0  has strongly supported restructuring the unlimited fourth 
benefit period by having two periods of 90 days and then an unlimited number of 60 day 
periods.  Such a structure would protect the beneficiarys access to the hospice benefit while 
also protecting Medicare by requiring more frequent evaluations of the eligibility of the 
patient for the hospice benefit.  Through NHOs urging, this legislation has also recently been 
signed into law. 
As suggested above, we also agree that the payment structure for hospice services delivered in 
the nursing home needs to be reviewed to make certain that the payment reflects a fair and 
appropriate level of payment for quality-driven hospice care. In discussions with the Health 
Care Financing Administration (HCFA) we have pledged the resources and efforts of this 
organization to working with HCFA to craft a fair payment system that reinforces the 
appropriate incentives. 
However, while we find the report to be useful in the manner we have described, we object to 
the conclusion that the Medicare Hospice Benefit should not be available to residents of 
nursing homes.  The recommendation to eliminate the availability of the hospice benefit in the 
nursing home appears to be a draconian response to the facts as presented.  We are also 
distressed by certain content in the draft report we reviewed as noted below. 
BACKGROUND 
Hospice Cure 
The statement is made that the daily amount paid to the hospice is provided even if no 
 	
services are provided.  This statement may be misleading in that this rate also includes 
payments for the every day costs of durable medical equipment, medications, on-call 
availability and the administration of the hospice program, including the significant costs 
of interdisciphnary team coordination of the care plan. 
The statement is made that Medicare expenditures for hospice care have increased 
 	
significantly during the period 1986-1995. While this statement is true, the context is 
missing.  The Medicare Hospice Benefit was not made a permanent benefit until 1986, 
and it should not be considered unusual for significant growth to occur in an emerging 
benefit, particularly when the services associated with that benefit are only now becoming 
familiar to the public.  Additionally, HCFAs statistics suggest that the increases in 
Medicare expenditures primarily represent increased numbers of patients served rather 
than increases in per patient costs.  Hospice care continues to be the smallest of the 
Medicare benefits representing only a tiny fraction of total Medicare expenditures. Also, a 
1995 Lewin-VHI study suggests that Medicare costs would have been more than a billion 
dollars higher in 1995 without the Medicare Hospice Benefit. 
-. 
2 
 Hospice Care in Nursing Home 
The chart and accompanying text fail to describe accurately the payment flow.  As you 
 	
know, hospice care services must be provided strictly by the hospice.  It may be 
misleading to suggest that all payments go to the nursing home. 
Offze  of Inspector General Work 
Scope 
The statement is made that the inspection was limited to services provided to the patient 
 	
and the report does not discuss services provided to the patients family.  One of the basic 
principles of hospice care is that the patient and family unit is the focus of care. One of 
the great misconceptions of death and dying is that of a defined medical event.  In hospice 
care we have learned that to care for the physical, spiritual and emotional needs of the 
patient you must also care for the patients family, however it might be defined.  To 
disregard the family should lit  the confidence in the conclwions  related to the provision 
of hospice services. 
METHODOLOGY 
The study involves disproportional sampling at two stages, requiring a double weighting 
 	
procedure to get from sample results to a national estimate and greatly complicating the 
calculation of confidence limits.  For example, the report notes that Most data presented 
in the report are based on the results of a weighted sample.. . But disproportional 
sampling is used twice:  First, in the selection of hospices (i.e. 6 hospices were selected to 
represent all hospices and 60 percent of all hospice patients in 45 states; while 6 hospices 
were selected from each of the 5 other states). Second, when all nursing facility hospice 
patients were selected from those with less than 35 patients, but a random sample of 35 
patients was selected from each of the remainin g hospices.  While presenting a significant 
amount of data the report is silent on an important methodological procedure, i.e. how 
were the sample findings weighted to determine the estimate of those who are ineligible? 
The study is also silent on whether all stays reported in the study are actually completed 
 	
stays. For example, at one point the report states that Thirty-five percent of nursing home 
hospice patients in their fourth benefit period did not qualify for hospice care at the time of 
their hospice election.  This suggests that at least some patients were studied while they 
were still being served, rather than only after service was completed.  This is important 
because if some patients were studied while they were still being served the data may not 
be comparable between different groups. 
One of the conclusions drawn by the study is that the number of patients living more than 
 	
2 10 days is dramatically increasing.  While the conclusion may or may not be correct it is 
unclear if it is actually supported by the data provided. 
The study, while noting with some alarm the number of patients living longer than 2 10 
 
days, is silent on the fact that more than 15 percent of hospice patients are referred to 
-. 
3  hospice care within a week of death (Christakis NA, Escarce JJ. Survival of Medicare 
Patients After Enrollment in Hospice Programs. N Engl J Med 1996; 335: 172-7.). 
FINDINGS 
EligibiLityRate 
The report notes that 19 percent of hospice patients living in nursing homes did not qualify 
 	
for Medicares hospice benefit.  This statement regarding eligibility is based on the review 
of medical records to determine if the reviewer agreed with the prognosis and therefore 
eligibility of the patient established by the attending physician and/or the hospice medical 
director. According to the widely reported SUPPORT study, physicians have limited 
ability to predict the impending death of their patients even in the controlled environment 
of the nations finest teaching hospitals.  This is an area in which reasonable doctors ought 
to be able to differ without penalty to the provider or the patient.  However, your 
determination of ineligibility for these patients is based on your medical reviewers 
judgments that certain patients were not terminally ill with a prognosis of six months or 
less being deemed 100 percent reliable and correct, and the differing opinions of the 
patients attending physician and the hospice medical director being deemed 100 percent 
incorrect. 
As noted, the eligibility requirement for the Medicare Hospice Benefit is the certification 
 	
of a terminal prognosis of six months or less, if the disease runs its normal course. A 
patient does not have to show signs of decline at the point of election nor do they have to 
be unstable or on the brink of death to be eligible for the Medicate Hospice Benefit. 
We applaud OEIs use of IWOs  Medical Guidelinesfor Determining Prognosis in 
 	
Selected Non-Cancer Diseases as an improvement over simply relying on the inconsistent 
skills of its medical reviewers in determining prognosis.  Unfortunately, it is unlikely that 
the tool was available to the hospices and attending physicians at the time the patients 
elected the hospice benefit.  Indeed, as you know, hospices reviewed in this report until 
mid-1995 were required only to obtain physicians certifications to meet regulatory 
requirements. 
Impact on Length of Stay 
We question the accuracy of the length of stay conclusions as they are so inconsistent with 
 	
all the known data.  In addition to the methodological questions that we have already 
posed, we would question the use and accuracy of 1992 CDC comparison data. 
Hospice Services 
We certainly agree that the level and mix of hospice services should be equally available 
 	
regardless of the patients residence; however, we are uncertain that your report supports 
the conclusion that they are not.  In addition to the methodological questions that appear to undermine the comparability of 
 	
the data, we would also restate that disregarding the hospices services to the family 
erodes the comparability of the data 
There is absolutely no data provided to support the speculation found on page nine that 
 	
nursing homes were already providing the services offered by the hospice. 
The statement is made that one out of eight nursing homes contacted claimed that, in all 
 	
too many cases, hospices are not providing these services to nursing home patients. 
Without knowing who was responding for the nursing home or seeing the interview tool, 
it is impossible to ascribe any validity to this statement.  One out of eight nursing homes 
could have thought they were under an OIG investigation,  We would also point out that 
minimal disruption to the daily routine at the nursing home is not a Medicare covered 
hospice service, and including it on the list biases the response. 
The examples used by the report suggest responsible actions by the hospice.  To suggest 
 	
that the nursing home would have responded in a similar manner is again not supported by 
any data. An equally plausible conclusion is that absent the hospice program, the patients 
would not have been cared for in the nursing home at all and would have all been 
transferred to a hospital at significantly higher cost to Medicare. 
NH0  agrees with the reports conclusion that much of what hospice care provides in the 
 	
nursing home could be done by the nursing home itself if the goals, mission and culture of 
the nursing home were changed; if the nursing home were paid more money, and if the 
laws and regulations that currently inhibit such care by the nursing home were changed. 
We note, however, that changes in the law to require that patients rights to refuse 
treatment be honored in the nursing home setting appear not to have had the intended 
consequences. 
SUBSTANTIAL  GROWTH  EXPECTED 
The report suggests that the inclusion of the hospices that underwent separate OIG reviews 
 	
would alter the estimates.  This statement appears inconsistent with statements of data 
reliability made as part of the methodology section. 
The report concludes that Overall costs for the care of hospice patients residing in 
 	
nursing homes appears to be substantially higher than for other hospice patients. 
However, no data are presented to support the conclusion. Without information on total 
actual Medicare and Medicaid payments for hospice patients served in the community and 
those served in nursing homes, conclusions regarding relative costs cannot be drawn. 
RECOMMENDATIONS 
NH0  agrees that the current benefit period structure should be modified and strongly 
 	
supports the changes now required by law. 
5  NH0  finds nothing in this report that supports the conclusion that the Medicare or 
 	
Medicaid Hospice Benefits should not be available to nursing home residents. 
Additionally, no actual data is presented to support a specific reduction in payments for 
hospice services provided in nursing homes. 
NH0  reiterates its commitment to working with the Health Care Financing 
 	
Administration to craft a payment mechanism for hospice care in the nursing home that 
addresses concerns related to overpayments. To craft an appropriate response will take 
reliable information and thoughtful analysis, neither of which is currently available to the 
government or the hospice community. 
NH0  is concerned that our objections to this study and its recommendation to eliminate the 
hospice benefit in the nursing home will be construed as a lack of interest in and support for 
continually improving the Medicare and Medicaid hospice benefits and reducing any 
tulnerabilities.  Neither is the case. 
Over the years, NH0  has taken the following actions to improve the delivery of hospice care 
in the nursing home: 
In the absence of a government or medical community initiative, NH0 has spent 
 	
significant resources developing guidelines for establishing terminal prognoses to 
encourage the referral of patients to hospice care, but also to provide attending physicians 
and hospice physicians the tools to increase their certainty that only appropriate patients 
are admitted to hospice care. 
NH0 has also spent considerable resources and almost a decade in an effort to improve 
 	
the quality of hospice care provided in the nursing home, and to improve the relationship 
between the hospice and the nursing home while minimErg  the potential for abusive 
behavior.  These efforts have been made with minimal government assistance to clarify 
the rules governing these relationships. 
NH0 has established a Nursing Home Task Force that continues to identify problems and 
 	
solutions to this complex issue. 
-0 	 Despite our differences, NH0  has worked closely with the OIG to identify problems and 
to communicate these issues to hospices. 
NH0  is also working closely with HCFA to develop new Medicare Conditions of 
 	
Participation, including new provisions concerning hospice care provided in the nursing 
home.  We have worked with HCFA and the fiscal intermediaries (FIs) on focused 
medical review, and we are also working with the FIs Medical Directors to design Local 
Medicare Review Policies that will provide FIs and hospices better guidance in 
admitting appropriate patients.  We continue to support more ftequent surveys of hospice programs and better surveyor 
 	
training.  One of our general concerns about the entire Operation Restore Trust experience 
is the expenditure of extraordinary sums of money to capture a few bad apple actors 
when the day-to-day operations of the governments oversight efforts are left to flounder. 
Increasing the routine surveys of hospice providers beyond the current average of 10 
percent per year by appropriately trained surveyors could substantially eliminate the 
problems that concern us today before they happen. 
NH0  thanks you for your consideration of our comments.  While we cannot support your 
recommendations to limit hospice care in the nursing home, we are confident that the steps we 
have aheady taken and the efforts that have been undertaken by various government 
authorities will have the desired effect of limiting fraudulent and abusive behavior by hospices 
and nursing homes. 
President  June 26,  1997 
228 Seventh  Street,  SE 
Washington,  DC 
Mr. George  Grob 
20003-4306 
(2021546-4759  Deputy  Inspector  General  for Evaluation  and Inspections 
Fax (202X47-9559  Office  of the Inspector  General 
330 Independence  Avenue,  S.W. 
Rosemary J. Hurzeler  Washington,  DC 20201 
Chair 
Diane  H. Jones 
Executive Director 
The Hospice Association  of America  (HAA) would like to thank you and the Office  of 
the  Inspector  General  (OIG)  for  this  opportunity  to  comment  on  the  draft  report, 
Hospice Patients in Nursing Homes: Eligibility,  Services, and Growth. HAA believes 
that while the report begins to identify  some of the problems  inherent  with the hospice 
nursing  home benefit,  including  the scope and intensity  of services and reimbursement 
issues, the study is generally  misdirected  and fails to recognize  the distinction  between 
hospice  and other health  care services. 
Our  comments  focus  on  the  stated  purpose  of  the  study,  which  was  to  examine 
eligibility,  services,  and  growth  in the  number  of  hospice  patients  living  in nursing 
homes.  In our assessment:  elinibilitv  is examined  by applying  criteria  from  a source 
(Medical Guidelines for  Determining Prognoses  in Selected Non-Cancer  Diseases)  not 
available  at the time patients  being reviewed  were enrolled  in hospice  care; the review 
of  hospice  services  provided  to  nursing  facility  (NF)  residents  does  not  reflect  an 
understanding  of  the  difference  between  hospice  care  and  long  term  care;  and  the 
growth  in the number  of patients  served  is criticized  even though  hospice  is gaining 
national  acceptance  as an end-of-life  option  for care. 
HAA  believes  that  hospice  services  should  not  be  denied  to  eligible  NF  residents, 
regardless of income  status. While we would not support the elimination  of the nursing 
home  benefit,  the recommendation  to reduce Medicare  payments  for hospice  patients 
living  in  NF  is perhaps  valid  and  HAA  wholeheartedly  supports  further  study  and 
analysis  in order to develop  a reimbursement  formula  that accurately  reflects  the costs 
of  hospice  services.  More  importantly,  it  is  clear  from  the  study  that  the  hospice 
industry  must acknowledge,  accept, and act upon its responsibilities  in the delivery  of 
comprehensive  hospice  services.  HAA looks  forward  to working  with  OIG to clarify  the utility  of this report.  We are 
committed  to activities  that ensure Medicare and Medicaid  monies  for hospice  care are 
well spent and Medicare beneficiaries  who are terminally  ill receive appropriate,  quality 
hospice  care. 
Please do not hesitate to call if you have any questions regarding these comments.  I can 
be reached  at 2021546-4759. 
Sincerely, 
Diane  H. Jones 
Executive  Director 
Enclosure  Hospice  Association  of America 
EXECUTIVE  SUMMARY 
Office  of the  Inspector  General  Report  on 

Hospice  Patients  in Nursing  Homes:  Eligibility,  Services,  and  Growth 

OVERVIEW 
HAA  believes  that  while  the report  begins  to identify  some of the problems  inherent  with  the 
hospice nursing home benefit,  including  issues of scope, intensity  of services, and reimbursement, 
the study is generally  misdirected  and fails to recognize the distinction  between hospice  and other 
health care services. We would also be able to understand  better the conclusions  if the report had 
included the questions posed during interviews  as well as the position  of those being interviewed. 
BACKGROUND 
When the hospice  nursing home  benefit  was added to the Medicare  hospice  benefit  in  1986, 

hospice providers  developed  an appropriate  model of hospice care for terminally  ill patients  who 

reside in a nursing  facility  (NF). The model, which has been used by the Health  Care Financing 

Administration  for state surveyor  training,  articulates  three principles:  1) the NF is considered  to 

be the patients  home;  2) the NFs staff are the patients  extended  family;  and 3) the same staff 

are members  of the expanded  hospice  team.  (Used in this context,  family  refers to person(s) 

who play a significant  role in the patients  life.  While NF staff do not replace  the patients  own 

family  members, they provide  daily care and caring over extended periods of time, and in effect, 

become significant  in the patients  life.)  The Medicare hospice conditions  of participation  define 

the unit  of care as the patient  and family. 

FINDINGS 

Response  to  eligibility  and  length-of-stay 

For  patients  with  a diagnosis  other  than cancer,  medical  reviewers  were  asked  to  use  a tool 

developed  by  the  National  Hospice  Organization  (NHO)  in  conjunction  with  HAA  entitled 

Medical Guidelines for  Determining Prognoses  in Selected Non-Cancer  Diseases. The guidelines 

were developed  as a result of problems  with inaccurate  prognostications.  HAA believes  that it is 

inappropriate  to use the tool to assess the appropriateness  of patients  enrolled  in hospice prior to 

the publication  of the guidelines. 

Response  to hospice  services  received  by hospice  NF  patients 
Statutory  language defines the patient and family  as the unit of care, not just the patient.  It would 
have  been  instructive,  and more  comprehensive,  had the  inspections  and  discussions  included 
services provided  to the family,  including  the nursing home  family. 
The  study  also  raised  the  question  of  whether  NF  staff  should  be providing  hospice  care  in 
addition  to long term care. HAA believes  another study would be more appropriate  to determine 
what  and  how  other  health  care  providers  should  be  caring  for  terminally  ill  patients.  The 
interface  between  hospice  and NF must be examined  in order to ensure  a good death for  all 
who are terminally  ill. 
1 
- Response  to the  issue  of growth  of hospice  services  in  NF 
Currently  only  about  15%-l 7%  of  people  in  the  US  who  die  of  disease-related  causes  are 
receiving  hospice  care. Access to a cost effective,  humane,  and compassionate  approach  to care 
for terminally  ill patients  should not be limited  because the industry  is growing  too  fast. 
RECOMMENDATIONS 
HAA believes  that hospice  services  should not be denied to eligible  NF residents,  regardless  of 
income  status. HAA  agrees that the hospice  NF program  should  be evaluated  with  a focus  on 
obtaining  valid  data  related  to  costs.  We also  recommend  that  any  legislation:  1) disconnect 
hospice payments  from Medicaid room and board payments;  2) require studies of hospice nursing 
home programs  to determine  costs, scope, and intensity  of services provided  to hospice  nursing 
home patients  as compared  to hospice  home care patients;  and 3) adjust Medicare  payments  for 
hospice  services  to nursing  home patients  according  to verifiable,  accurate  data. 
2 
 Hospice  Association  of America  Comments 
Hospice  Patients  in  Nursing  Homes:  Eligibility,  Services,  and  Growth 
INTRODUCTION 
When the hospice  nursing home  benefit  was added to the Medicare  hospice  benefit  in  1986, 

hospice providers  developed  an appropriate  model of hospice care for terminally  ill patients who 

reside in a nursing  facility  (NF). The model,  which has been used by the Health  Care Financing 

Administration  for state surveyor training,  articulates  three principles:  1) the NF is considered  to 

be the patients  home;  2) the NFs staff are the patients  extended  family;  and 3) the same staff 

are members  of the expanded  hospice  team.  (Used in this context,  family  refers  to person(s) 

who play a significant  role in the patients  life.  While NF staff do not replace the patients  own 

family  members, they provide  daily care and caring over extended periods  of time, and in effect, 

become significant  in the patients  life.)  The Medicare hospice conditions  of participation  define 

the unit of care as the patient  and family.  It is within this framework  that the Hospice Association 

of  America  (HAA)  will  base  its comments  on the  draft  report,  Hospice  Patients  in Nursing 

Homes:  Eligibility,  Services,  and  Growth,  prepared  by  the  Office  of  the  Inspector  General 

(OIG). 

There  is  little  doubt  that  some  hospice  providers,  despite  having  developed  a  conceptual 

framework  for  working  with  NFs,  have  been  less than  successful  in  implementing  their  NF 

programs.  There is also general  agreement  that the hospice NF benefit  should be protected  from 

abuse,  waste,  and  fraud.  Both  of  these  facts  support  active  and  ongoing  inspections  and  the 

development  of remedies  to ferret  out fraud  and abuse  as well  as end any  waste  of Medicare 

dollars.  However,  HAA believes  that all terminally  ill Medicare  beneficiaries  have  the right to 

freely  access hospice  care at the end of their lives.  Equal access means providing  the full  scope 

and  intensity  of  hospice  services  that  are  timely,  appropriate,  and  professionally  and 

compassionately  delivered,  regardless  of the setting. 

COMMENTS 

Issue:  Inspection  and discussion  was limited  to services  provided  to the patient. 

Comment:  Since  statutory  language  defines  the patient  and family  as the unit  of care,  it is 

unclear why the OIGs inspections  and discussions  were limited  to services provided  only to the 

patient.  It  would  have  been  instructive,  and  more  comprehensive,  had  the  inspections  and 

discussions  included  services  provided  to  the  family,  including  the  nursing  home  family. 

Coordination  of  care  and  psychosocial  support  are  hospice  services  delivered  both  to  family 

members  as well  as interdisciplinary  team members.  Family  members  are often  dealing  with  a 

myriad  of psychosocial  issues when a loved one is placed in a NF or, as in the majority  of cases 

under  inspection,  when  the NF  resident  becomes  terminally  ill.  In addition,  NF  staff  must be 

included  in  developing  the  plan  of  care  as well  as receiving  hospice  support  in  caring  for  a 

terminally  ill  patient.  When  measuring  hospice  services,  it would  seem that  those  provided  to 

family  members  should  be taken  into consideration. 

Issue:  Definition  of services. 

Comment:  From  the report  and the tables  in the report  it appears  as though  services  are 

being  defined  only  as hospice  visits  using  the  methodology  of inspecting  hospice  records  and 

3  conducting  interviews.  Since  the  constellation  of  hospice  services  involves  comprehensive 

interdisciplinary  coordinating  activities,  it would  seem to be important  to inspect  all aspects  of 

the  delivery  of  hospice  services.  Inspection  of  hospice  services  should  include  telephone 

consultations,  visits,  and communications  with  all family  members  as well  as members  of the 

interdisciplinary  team who deal with these issues. 

Issue:  Medical  review  contractor  was  instructed  to  determine  whether  NF  services  to 

patients  changed  after election  of hospice. 

Comment:  NF services are not being inspected, hospice services are. Section 2082A, Election 

of  Hospice  Benefit  by  Resident  of  a  Skilled  Nursing  Facility  (SNF),  Nursing  Facility  (NF), 

Intermediate  Care Facility  for the Mentally  Retarded (ICF/MR), or Non-certified  Facility,  states: 

The  SNF/NF Conditions  of Participation  are applicable  to all of the residents  in 
a SNF/NF  facility.  Neither  the  statute  nor  the  regulations  setting  out  SNF/NF 
requirements  exempts hospice  patients  in a SNF/NF from those  regulations. 
It  is unclear  why  the  medical  review  contractor  would  be  asking  if  NF  services  to  patients 

changed  after  election  of hospice.  Perhaps  a better question  to ask is if the NF hospice  patient 

received  additional  services  from the hospice  after election  of the hospice  benefit. 

Issue:  Medical  review  contractor  instructed  to determine  if the services provided  by the 

hospice  staff could have been provided  by the NF staff 

Comment:  When  Congress  enacted  the hospice  benefit,  it defined  the concept  as a specific 

constellation  of care,  including  services  that  can only  be provided  by hospice  employees  with 

professional  management  responsibilities  and an interdisciplinary  team of skilled  professionals. 

It  is unclear  why  the  medical  review  contractor  would  be  instructed  to  determine  if  hospice 

services  could have been provided  by the NF staff. 

If the point is to determine  whether NF should be providing  hospice care in addition  to long term 

care,  another  study  would  be  more  appropriate.  The  Robert  Wood  Johnson  Foundations 

SUPPORT  (Study  to  Understand  Prognoses  and  Preferences  for  Outcomes  and  Risks  for 

Treatments)  project  confirmed  substantial  shortcomings  in  care  for  seriously  ill  and  dying 

hospitalized  adults.  Indeed,  considerable  national  attention  and  resources  are  currently  being 

directed  at end-of-life  issues and care. The interface  between hospice  and NF must be examined 

in order to ensure a good death for all who are terminally  ill,  and HAA would  be pleased  to 

participate  in any research  with OIG and others  to reach this goal. 

Issue:  OIG inspectors  spoke with 20 out of 22 hospice  providers  and 79 NF providers. 

Comment:  The report does not indicate the total number of NF providers,  nor does it include 

the interview  protocol.  This raises a number  of questions.  Did the discussions  involve  only  one 

or more  than  one NF and hospice  provider  per facility?  It would  be instructive  to know  how 

many  actual  NF  were  involved  in  the  inspection  rather  than  just  the  number  of  NF  hospice 

patients.  This is based on our assumption  that the larger the number  of hospice  patients  in any 

one  facility,  the  more  likely  it  is that  the  hospice  philosophy  and  concept  of  care  would  be 

integrated  into the NF culture. It would therefore  be helpful to know the concentration  of hospice 

patients  in each NF, including  the average and median number of hospice patients  per facility  in 

4  order  to  better  evaluate  the  findings.  It  would  also  be helpful  to  know  if  the  findings  were 

weighted  because  discussions  were held with more than one provider  from  each facility. 

Issue:  In some cases the records showed that patients  did have a terminal  condition  but 

were stable with little  sign of deterioration  or decline. 

Comment:  How is terminal  defined  by the medical  reviewers?  If a patient  has a terminal 

condition  with a life expectancy  of six months or less, the patient is eligible to elect the Medicare 

hospice  benefit,  regardless  of how long the patient  lives or how stable the condition  is. Hospice 

patients  can stabilize  for a period of time with hospice care and still be considered  terminally  ill. 

Issue:  For patients  with a diagnosis  other than cancer,  medical  reviewers  were asked to 
use  the  National  Hospice  Organizations  Medical  Guidelines for  Determining  Prognoses  in 
Selected  Non-Cancer  Diseases. 
Comments:  (1) We were pleased that the report notes the medical guidelines were not available 
to hospices when some of the patients being reviewed  elected the hospice benefit.  Was this taken 
into consideration  when the medical  reviewers  made their  determinations?  The guidelines  were 
developed  as a result of problems  with inaccurate  prognostications;  it is inappropriate  to use the 
tool  developed  to  correct  the  problems  to  assess  patients  enrolled  in  hospice  prior  to  its 
publication. 
(2)  Seventy-three  out of the  200 sampled  patients  had  one  of the  four  diseases 
covered  by  the  guidelines.  What  were  the  diagnoses  of the  remaining  127 patients  and what 
criteria  were used to evaluate  their  records? 
Issue:  As a result of patients  being ineligible  for the hospice  benefit  at the time  of their 

election,  the average  length-of-stay  for these patients  is significantly  longer  than patients  found 

eligible  for hospice  care. 

Comment:  Did  the  study  take  into  consideration  the  difference  in  lengths-of-stay  between 

cancer  and  non-cancer  patients?  The  art  and  science  of  prognostication  are  both 

underdeveloped  and  unrefined  for  non-cancer  diseases,  the  course  of  the  diseases  are  more 

unpredictable,  and the majority  of hospice NF patients have non-cancer  diagnoses.  The end result 

is longer  lengths-of-stay  for these patients  than patients  with cancer diagnosis. 

Issue:  The inspection  found that the average  length-of-stay  for NF hospice  patients  was 

significantly  higher  than  data recently  released  by NH0  (181 days vs. 56.3 days). 

Comments:  (1) Why is there more than a three-fold  difference  in the lengths-of-stay  between 

OIG and NHO? Does it call into question the measurement  differences  between  the OIG sample 

or NHOs  survey? 

(2) What  is the  average  length-of-stay  for  home-based  patients  in the  hospices 
included  in the study? 
Issue:  NF  hospice  patients  receive  nearly  46%  fewer  nursing  and  aide  services  than 

hospice  patients  living  at home 

Comments:  (1) The report  appears to use visits interchangeably  with  services (see earlier 

comment  on this  subject). 

(2) There is no information  regarding  hospice interactions  to coordinate  the plans 
of care with NF staff, which  is an important  component  of hospice  care in a NF. 
5  (3) Was an evaluation  of the types  of nursing  visits  conducted?  The  fewer  number 
of  nursing  visits  could  be  related  to  NF  not  using  the  hospice  R.N.  on-call  availability  as 
frequently  as home-based  hospice  patients  and  families.  This  information  would  be  important 
when  determining  any  rate  adjustments  for  the  NF  hospice  program. 
(4) Hospice  is the  only  Medicare  provider  required  to provide  volunteer  services, 
even  though  they  are not  reimbursable.  Because  of this,  volunteer  support,  such  as visits,  phone 
calls,  running  family  errands,  and  providing  services  to  family  members,  are  a vital  component 
of  hospice  care  and  should  be  included  in any  inspection  of  hospice. 
Issue:  Table  2 compares  medical  reviews  of NF  hospice  patients  and  preliminary  results 

of  OIG  national  sample  of  hospice  patients. 

Comment:  Why  not  compare  medical  reviews  of NF hospice  patients  to the  sampled  hospices 

non-NF  patients?  There  is  no  information  about  practice  patterns  to  determine  if the  sampled 

hospices  practiced  the  same  or differently  in NF  and  home  settings. 

Issue:  The  report  states,  One  out  of eight  nursing  homes  we  contacted  claimed  that,  in 

all too  many  cases,  hospices  are not providing  these  services  [additional  support  for nursing  home 

staff,  post  death  bereavement,  family  support,  pain  management,  and  minimal  disruption  to the 

daily  routine]  to  nursing  home  patients. 

Comments:  (1) This  is speculative,  not  empirical  evidence. 

(2)  How  were  nursing  and  aide  visits  defined  and  counted? 
(3)  Services  were  not  measured,  nursing  and  nurse  aide  visits  were  the  only 
elements  included  in the  study  which  concluded  that  46%  fewer  services  were  provided  (see 
earlier  comment  on  this  subject). 
(4)  Were  the  discussions  conducted  with  equivalent  staff  in  each  NF?  What 
controls  were  in place  to  ensure  against  bias  during  the  interviews? 
Issue:  Three  out  of  four  nursing  home  patients  received  only  routine  nursing  and  aide 

visits. 

Comment:  The  inspection  was  designed  to look  only  at routine  hospice  care,  so the  meaning 

of this  conclusion  is unclear. 

Issue:  The  remaining  one  in four  patients  received  additional  services,  which  the  report 

characterizes  as services  NF  staff  could  have  provided. 

Comment:  We are pleased  that  the report  acknowledges  some  of the medical  interventions  by 

hospice  reflect  care  options  that  are embodied  in the  hospice  philosophy.  However,  it is unclear 

what  purpose  is  served  in  stating  that  NF  staff  could  have  provided  the  same  services  as the 

hospice.  Hospice  services  are not  interchangeable  with  NF  services.  The  examples  given  of care 

provided  to NF  hospice  patients  by  hospice  staff  reflect  the  unique  constellation  of  disciplines, 

skills,  perspective,  and  problem-solving  abilities  hospice  brings  to the  terminally  ill patient  and 

family.  If the  NF  (or  any  other  provider)  could  (or  would)  provide  hospice  services  as defined 

by the  Medicare  hospice  conditions  of participation,  then  the  hospice  concept  and  philosophy  of 

care  would  be  fully  integrated  into  the  continuum  of  health  care  in  the  US.  Until  that  time, 

hospice  services  must  be delivered  and  reimbursed  separately. 

6 
 Issue:  Overall  costs  for  the  care  of  hospice  patients  residing  in  NF  appears  to  be 

substantially  higher  than  for  other  hospice  patients. 

Comment:  What  factors  were  used  to determine  the  costs  of other  community-based  services 

for non-NF  hospice  patients  that are funded  by Medicare  and Medicaid?  Additionally,  data should 

be collected  about  expenditures  for hospitalizations  and NF bed-hold  costs  while  NF  patients  are 

hospitalized. 

Issue:  Potential  growth  in the  number  of hospice  patients  living  in NF  is enormous. 

Comment:  Currently  only  about  15%-l 7%  of  people  in the  US  who  die  of  disease-related 

causes  are  receiving  hospice  care.  With  the  national  spotlight  on  end-of-life  issues,  heightened 

emphasis  on including  end-of-life  care in medical  education,  a prohibition  of using  federal  dollars 

to fund  physician-assisted  suicide,  the  aging  of baby  boomers,  and  increased  integration  of the 

delivery  of  health  care,  it can  be expected  that  hospice  care,  including  hospice  care  provided  to 

NF patients,  will  continue  growing  at a fairly  rapid  rate.  Access  to a cost  effective,  humane,  and 

compassionate  approach  to  care  for  terminally  ill patients  should  not  be  limited. 

Issue:  The  report  states  that  hospices  have  offered  to  reduce  NF  staff  time  for  hospice 

patients. 

Comment:  This  comment  is  located  under  the  section  Nursing  Home  Market  and  is 

addressing  marketing  to NF  providers.  The  report  earlier  stated  under  Three  out  of four  nursing 

home  patients  received  only  routine  nursing  and aide visits.  Nursing  home  administrators  that  we 

contacted  are beginning  to realize  that  patients  in their  facilities  may  not  be  getting  the  services 

hospices  said  they  would  provide.  Hospices  promise  additional  support  for  nursing;  home  staff. 

. . The  hospice  regulations  state:  substantially  all  core  services  must  be  routinely  provided 

directly  by  hospice  employees  and  cannot  be  delegated  to  the  SNF/NF.  Hospices  should  be 

promising  and  providing  additional  support  for  nursing  home  staff. 

Issue:  OIG  recommendation  to  eliminate  or reduce  Medicare  or Medicaid  payments  for 

hospice  patients  living  in NF 

Comment:  HAA  agrees  that  the  hospice  NF  program  should  be  evaluated  with  a focus  on 

obtaining  valid  data  related  to  costs.  HAA  also  recommends  that  any  legislation:  1) disconnect 

hospice  payments  from  Medicaid  room  and board  payments;  2) require  studies  of hospice  nursing 

home  programs  to  determine  costs,  scope,  and  intensity  of  services  provided  to hospice  nursing 

home  patients  as compared  to hospice  home  care  patients;  and  3) adjust  Medicare  payments  for 

hospice  services  to  nursing  home  patients  according  to verifiable,  accurate  data.