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. 

OEI’s 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 Medicare’s 

hospice benefit. Congress repealed the hospice benefit’s 210 day limit effective for 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 

hospice’s 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 

Medicare’s 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 

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 Medicare’s 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 

0 
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 

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

�  Hospice payments for nursing home patients may be excessive ............. 6 

�  Continued growth in hospice expenditures expected ..................... 9 

RECOMMENDATION ............................................ 13 

APPENDICES.. ................................................... 

A: Methodology ................................................ A-l 

B: Confidence Intervals ........................................... B-l 

C: Agency Comments ............................................ C-l 
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, Medicare’s 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 Medicare’s 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 patient’s medical needs related to their terminal 

illness. However, Medicare will continue to pay for services furnished by the patient’s 

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 

Medicare’s hospice benefit. When this occurs, the hospice assumes responsibility for 

the professional management of the patient’s medical care for the terminal condition. 

The nursing home continues to provide the patient’s 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 

patient’s 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 patient’s 

room and board. The State 

Medicaid agency must pay the 

hospice at least 95 percent of what 

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 

l%using 

Hame 

payments for room and board are in addition to Medicare’s 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 

Medicare’s 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 Medicare’s 

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 

services provided to the patient. Our reviewers did capture 

staff to family members which we have reported but do not 

METHODOLOGY 

Sampling Design 

discussion primarily to 

visits made by hospice 

make judgements about. 

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 home’s 

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 hospices’s 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 contractor’s 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 

patient’s 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 Medicare’s 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 HCFA’s 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 HCFA’s 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 President’s 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 Organization’s 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 NHO’s 

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 - Derived’from 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 

patient’s families. We did not extensively review or analyze the services provided to 

our sampled patient’s families. Our reviewers did however document the encounters 

with the family members. Less than 25 percent of our sampled patient’s 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 patient’s 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 patient’s 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 patient’s condition to try a different mattress to resolve the problem. 

7 
A female, age 79, was admitted to hospice to treat the patient’s pain. 

Despite the hospice’s 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 Medicare’s 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 
entered the nursing home after the 

hospice election, were questionable. In 

contrast, our reviewers questioned 21 

percent of the hospice admissions, 

where the patient lived in a nursing 

home before their hospice election. 

Many of these patients were entitled to 

both Medicare and Medicaid. 

As a result of patients being ineligible 

for the hospice benefit at the time of 

their election, the average length-ofstay for these patients is significantly 

longer than patients found eligible for 

hospice care. On average, ineligible 

patients received 369 days of hospice 

care compared to 145 days for eligible 

224 more days in hospice care than did 

the ineligible patients was $37,485 per 

patients. Ineligible patients spent, on average, 

eligible patients. The average hospice cost for 

patient. 

Table 1 

entered the nursing home after the 

hospice election, were questionable. In 

contrast, our reviewers questioned 21 

percent of the hospice admissions, 

where the patient lived in a nursing 

home before their hospice election. 

Many of these patients were entitled to 

both Medicare and Medicaid. 

As a result of patients being ineligible 

for the hospice benefit at the time of 

their election, the average length-ofstay for these patients is significantly 

longer than patients found eligible for 

hospice care. On average, ineligible 

patients received 369 days of hospice 

R&den= of ‘Patient 

Ineligible 

Nursinghome patient before 

hospice election 21% 

Nursing home admission after 

hospice election 4% 

Source:.OIG 

care compared to 145 days for eligible 1latients. Ineligible patients spent, on average, 

224 more days in hospice care than did eligible patients. The average hospice cost for 

the ineligible patients was $37,485 per Ijatient. 

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 Medicare’s 

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: 

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 hospice’s 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 patient’s terminal illness. In some cases, the nursing home 

10 

0 
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 
Providers For-Profit Hospice Providers 

Medicare Certified (1983-l 995) 

/ 

2!50-

200-

150-

ioo1983198419851988 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 patient’s eligibility 

every 60 days once a patient has been in hospice care for more than 180 days. 

12 
RECOMMENDATIONS 

Medicare’s 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 Medicare’s 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. 

Stratum 

California (CA) 

Florida (FL) 

Illinois (IL) 

New York (NY) 

Texas (TX) 

Rest of the United 

States (RU) 

Table 1 Number of Hospice per Stratum 

Total Total number Total Number of 

Number of of Sampled number of Hospices with 

Hospices Hospices responding Nursing Home 

hospices Patients 

140 6 5 3 

36 6 4 3 

74 6 6 6 

53 6 6 4 

104 6 5 3 

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 

Hospice 

CA-1 

CA-2 

CA-3 

CA-4 

CA-5 

FL- 1 

FL-2 

FL-3 

FL-4 

IL - 1 

IL - 2 

IL - 3 

IL - 4 

IL - 5 

IL - 6 

NY-l 

NY-2 

NY-3 

NY-4 

NY-5 

NY-6 

TX-l 

TX-2 

TX-3 

TX-4 

TX-5 

RU-1 

RU-2 

RU-3 

RU-4 

kc/Nursing Home Hospice patientsby Hospice 

December 1995 Census 

Number of Number of 

Hospice Nursing Home 

Patients Patients 

35 7 

31 7 

38 32 

32 0 

:‘i 

48 6 

92 15 

31 4 

57 2 

28 10 

29 7 

11 3 

229 58 

105 2 

22 14 

3 0 

5 2 

Number of Complete 

Sampled Medical 

Patients Records 

7 7 

7 4 

32 23 

0 NA 

0 NA 

0 NA 

35 11 

6 4 

6 4 

15 12 

4 2 

2 2 

10 9 

7 6 

3 1 

35 35 

2 2 

4 4 

14 13 

0 NA 

0 NA 

8 5 

0 NA 

22 21 

35 29 

0 NA 

0 NA 

4 3 

0 NA 

2 2 

2 1 

A-3 
APPENDIX B 

ConfidenceIntervals 

B-l 
Variance and Estimated Confidence Inten& 

Ineligible patien 

Nursing home 

admission 

before hospice 

election 

Nursing home 

admission after 

hospice 

admission 

.s 

Ineligible 

Ineligible 

Estimate Standard 

Error 

16.08% 4.31% I 7.63% I 24.53% 

20.78% 4.89% 11.20% 30.36% 

3.62% 2.85% 0% 9.21% 

44.93% 4.93% I 35.27% I 54.59% 

144.50 22.99 99.44 189.56 

I 

368.70 59.61 I 251.86 485.54 

$37,485.10 $2903.41 $3 1,794.42 $43,175.78 

Patients duallv entitled 

Average length of stay for 

eligible patients 

Average length of stay for 

ineligible patients 

Average reimbursement for 

total hospice stay for 

ineligible patients 

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 

opportunity to review and comment on this report. 

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 doing a disservice to our beneficiaries. 

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 

chance to be considered by Congress that will repeal the third 30day period and fourth 

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 benefit’s 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 patient’s medical care for the terminal condition. 

Management of a patient’s 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 patient’s 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 patient’s 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 hospice’s services. 
5 

0 

0 

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. 

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. 

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 Planning�d 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 nursinghomas“mustrespondwitha plan to stop 

or mvuw tha da#emfaWn” by provldingacthrelnterventionr. Wa b&i that cur?ant 

nurainghomefuk8pennitpatkmtstorafusetr&nMts. wetacommandthatth@ 

+ fjw&bfj CucfcMfnursinghame 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 

MAY 2 2 1997 

MEMORANDUM TO: Office of the Inspector General 

Attention: George Grob 

FROM: John J. Callahan 

Assistant Secretary for Management 

Office of the Secretary 

Washington, D.C. 20201 

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. OIG’s 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, there’s no alternative but to receive this care in a nursing facility. 

We believe that OIG’s 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. OIG’s 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 patient’s terminal diagnosis. 

3. OIG’s 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 

NHO’s 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 NHO’s 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 NHO’s 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 beneficiary’s 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 NHO’s 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, HCFA’s 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 patient’s 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 patient’s 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 Medicare’s 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 nation’s 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 OEI’s use of IWO’s 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 patient’s 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 hospice’s 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 report’s 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 (FI’s) on focused 

medical review, and we are also working with the FI’s Medical Directors to design “Local 

Medicare Review Policies” that will provide FI’s 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 government’s 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 

20003-4306 Mr. George Grob 

(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 patient’s home; 2) the NF’s staff are the patient’s 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 patient’s life. While NF staff do not replace the patient’s own 

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

become significant in the patient’s 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 patient’s home; 2) the NF’s staff are the patient’s 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 patient’s life. While NF staff do not replace the patient’s own 

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

become significant in the patient’s 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 NF’s, 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 OIG’s 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 Foundation’s 

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 Organization’s 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 NHO’s 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.