For Release on Delivery

Expected at 1:30 p.m.

Monday, September 18, 2000

GAO/T-HEHS-00-201

MEDICARE

More Beneficiaries Use

Hospice; Many Factors

Contribute to Shorter

Periods of Use

Statement of William J. Scanlon, Director

Health Financing and Public Health Issues

Health, Education, and Human Services Division

Testimony

Before the Before the Special Committee on Aging, U.S.

Senate

United States General Accounting Office

GAO
Page 1 GAO/T-HEHS-00-201

Mr. Chairman and Members of the Committee:

I am pleased to be here today as you discuss issues related to the use of

the Medicare hospice benefit. The twenty-first century will bring new

challenges to the provision of palliative care to older people. Palliative

care is changing, as are notions of a decent or “good” death free from

unnecessary suffering for patients, families, and caregivers. New medical

technologies and treatments are expected to result in better management

of symptoms of chronic conditions and at the same time will blur the lines

between curative care and palliative care.

Hospice care is an option available to Medicare beneficiaries who are

expected to have 6 months or less to live and who choose to receive

palliative care and supportive services, rather than traditional curativefocused medical care, to manage their terminal illness. Medicare-certified

hospices provide a range of services to control pain and provide comfort,

primarily to individuals in their own homes. Some patient advocates,

hospice providers, and others contend that certain Medicare beneficiaries

for whom hospice care is appropriate may have difficulty in gaining access

to care or receiving services in a timely manner. However, officials of the

Health Care Financing Administration (HCFA) and others assert that the

hospice benefit is basically working as intended and meeting the needs of

those who choose to use it. At your request, we examined the use of the

hospice benefit during the past decade. Accordingly, my remarks will

focus on (1) the patterns and trends in hospice use by Medicare

beneficiaries, (2) factors that affect the use of the hospice benefit, and (3)

the availability of hospice providers. Our report on this work is being

released today, and it provides more detailed information on these issues.1

In summary, the number of Medicare beneficiaries choosing hospice

services has grown substantially during the past decade—nearly 360,000

beneficiaries enrolled in 1998, more than twice the number that elected

hospice in 1992. Cancer patients account for more than half of Medicare

hospice users, but the most dramatic growth in use is among persons with

other terminal conditions, such as heart disease, lung disease, stroke, or

Alzheimer’s disease. Although more beneficiaries are choosing hospice,

many are doing so closer to the time of death. Half of Medicare hospice

users are enrolled for 19 or fewer days, and service periods of 1 week or

less are common. Many factors influence decisions about whether and

when to begin hospice services, including physician practices, patient

1Medicare: More Beneficiaries Use Hospice, but for Fewer Days of Care (GAO/HEHS-00-182, Sept. 18,

2000).

Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 2 GAO/T-HEHS-00-201

preferences and circumstances, and general awareness of the benefit

among professionals and the public. Along with these factors, federal

oversight of compliance with Medicare eligibility requirements may also

have affected hospice use. Growth in the number of Medicare hospice

providers in both urban and rural areas and in almost every state suggests

that hospice services are more widely available to program beneficiaries

than in the past. At the same time, hospice officials report increased cost

pressures from shorter patient enrollment periods and the use of more

expensive forms of palliative care. Because data on provider costs are not

available, however, the effect of these factors on the overall financial

condition of hospice providers is uncertain. HCFA is beginning to gather

information from hospice providers about their costs, which should allow

the adequacy of Medicare hospice payment rates to be evaluated in the

relatively near future.

The Medicare hospice benefit, authorized in 1982 under part A of the

Medicare program, covers medical and palliative care services for

terminally ill beneficiaries. A Medicare-certified hospice provides

physician services, nursing care, physical and occupational therapy, home

health aide services, medical supplies and equipment, and short-term care

in the hospital (for procedures necessary for pain control and symptom

management). In addition, the hospice benefit provides coverage for

several services not generally available under the regular fee-for-service

Medicare benefit. These include drugs for symptom control and pain relief,

inpatient respite care, and bereavement counseling for the patient’s family.

For each day a beneficiary is enrolled, the hospice provider is paid an allinclusive, prospectively determined rate, depending on the level of care

that is provided.2

Beneficiaries who elect hospice are required to waive Medicare coverage

of care related to their terminal illness that is provided outside the

hospice, although they retain coverage for services unrelated to their

terminal illness. A beneficiary can cancel his or her election of hospice

benefits at any time, return to regular Medicare, and reselect hospice

coverage later. To be eligible for hospice services, a beneficiary’s

physician and the hospice medical director (or other physician affiliated

with the hospice) must certify that his or her prognosis is for a life

expectancy of 6 months or less, if the terminal illness runs its normal

2The four levels of hospice care are routine home care, continuous home care, inpatient respite, and

general inpatient care.

Background
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 3 GAO/T-HEHS-00-201

course. This eligibility requirement has been a concern among patient

advocates and providers, who assert that it deters referrals to hospice.

Research has shown that it can be difficult for physicians to accurately

predict whether or not a patient is likely to die within 6 months. It is

particularly difficult to estimate life expectancy for persons with

noncancer diagnoses because the course of their disease is often uneven.

Our analysis of Medicare claims data indicates significant growth in

hospice use. The number of beneficiaries electing hospice care more than

doubled from 1992 to 1998, from about 143,000 to nearly 360,000 people

annually. (See fig. 1.) In 1992, hospice users represented 1 in 12 Medicare

beneficiaries who died that year. By 1998, this proportion grew to 1 in 5,

with wide variation across states. However, this measure understates the

proportion of Medicare beneficiaries who choose hospice care among

those for whom the benefit was intended. According to a former president

of the National Hospice Organization, “when the number of deaths

nationwide is adjusted to reflect only those that are likely to be

appropriate for hospice care, the percentage of dying patients cared for in

hospice care is probably about 40 percent.”3

3John J. Mahoney, “The Medicare Hospice Benefit—15 Years of Success,” Journal of Palliative

Medicine, Vol. 1, No. 2 (1998), pp. 139-46.

The Number of

Beneficiaries Using

Hospice Has Grown

as Average Days of

Use Have Declined
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 4 GAO/T-HEHS-00-201

Figure 1: The Number of Medicare Hospice Benefit Users Has Grown Steadily, 1992-98

Source: GAO analysis of claims data from the Medicare Hospice Standard Analytic File.

Given concerns about the difficulty of establishing a 6-month prognosis for

beneficiaries with noncancer diagnoses, we took a closer look at their use

of hospice services. Although the majority of beneficiaries electing

hospice have a diagnosis of cancer, the use of hospice services by

beneficiaries with noncancer diagnoses has increased dramatically. From

1992 to 1998, hospice enrollment by beneficiaries with cancer increased 91

percent, while enrollment among beneficiaries with all other conditions

increased 338 percent. By 1998, about 43 percent of Medicare beneficiaries

electing hospice had noncancer diagnoses, compared with about 24

percent in 1992. Table 1 shows the distribution of new hospice users by

primary diagnosis in 1992 and 1998.

0

50

100

150

200

250

300

350

400

1992 1993 1994 1995 1996 1997 1998

Number in Thousands

143.1

180.1

223.0

258.5

294.9

325.3

358.9
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 5 GAO/T-HEHS-00-201

Table 1: Noncancer Patients Are a Growing Share of Hospice Enrollees,

1992 and 1998

Primary diagnosis a1992 1998

Number Percent Number Percent

All cancer 108,232 75.6 206,190 57.4

Lung 29,966 20.9 57,841 16.1

Prostate 10,052 7.0 15,494 4.3

Breast 7,602 5.3 13,093 3.6

Colon 6,697 4.7 13,278 3.7

Pancreatic 6,359 4.4 12,116 3.4

Other 47,556 33.2 94,368 26.3

All noncancer 34,878 24.4 152,759 42.6

Congestive heart failure 6,141 4.3 24,248 6.8

Chronic obstructive

pulmonary disease 4,112 2.9 15,765 4.4

Stroke 2,140 1.5 13,282 3.7

Alzheimer’s disease 1,591 1.1 11,836 3.3

“Ill-defined conditions” 888 0.6 7,599 2.1

Other 20,006 14.0 80,029 22.3

Total 143,110 100.0 358,949 100.0

a

Patients entering hospice may have more than one terminal condition or diagnosis. The

data presented include only the first, or principal, diagnosis listed for each patient.

Source: GAO analysis of claims data from the Medicare Hospice Standard Analytic File.

Beneficiaries who die of cancer are likely to receive hospice services

during the course of their illness, more so than those with other

conditions. In 1997, hospice users accounted for nearly half of all cancer

deaths among Medicare beneficiaries aged 65 or older. For the most

prevalent types of cancer in the hospice population, rates of use ranged

from about 75 percent of deaths from brain or liver cancer to 31 percent

for those with colon cancer. In comparison, hospice users represented 9

percent of people aged 65 and older who died from all noncancer causes in

1997.4

Although more Medicare beneficiaries are receiving hospice services, on

average, they are receiving fewer days of care than did beneficiaries in the

past. From 1992 to 1998, average length of stay declined 20 percent (from

74 to 59 days), while median length of stay declined 27 percent (from 26 to

19 days). (See fig. 2.) This overall decline appears to have been driven by

both (1) a reduction in the proportion of beneficiaries with very long

4The denominator used for calculating noncancer use rates includes people who died unexpectedly

(for example, from a first heart attack or injuries sustained during an automobile accident) and thus

are not candidates for hospice care.
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 6 GAO/T-HEHS-00-201

hospice stays and (2) an increase in the share of users with very short

stays.5 Beneficiaries using hospice care for one week or less accounted for

28 percent of all users in 1998, compared with 21 percent in 1992. While 9

percent of beneficiaries received hospice services for more than 6 months

in 1992, this share decreased to 7 percent in 1998.

Figure 2: Average and Median Hospice Lengths of Service Have Declined, 1992-98

Source: GAO analysis of claims data from the Medicare Hospice Standard Analytic File.

5The small proportion of beneficiaries with very long periods of enrollment skews the average length

of hospice service. Although 97 to 98 percent of all those electing hospice complete their hospice use

by the end of the year following their initial enrollment, our data for 1992 and 1993 show that some of

the remaining 2 to 3 percent of beneficiaries may receive services for as many as 6 or 7 years.

0

10

20

30

40

50

60

70

80

1992 1993 1994 1995 1996 1997 1998

Days

74

76 75

68

65

61

59

26 26 26

24 23

21

19

Average

Median
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 7 GAO/T-HEHS-00-201

The decline in the average number of hospice days used has been

especially dramatic among patients with a primary diagnosis other than

cancer. While these beneficiaries historically had used many more days of

care, the average number of days used declined 38 percent between 1992

and 1998. In comparison, average days used by hospice beneficiaries

diagnosed with cancer declined by 14 percent. As a result, differences in

length of stay across diagnosis categories have narrowed considerably. By

1998, cancer patients used 54 days, on average, while noncancer patients

used 68 days.

Several factors influence a beneficiary’s choice about whether and when

to use hospice care. These include physician preferences and referral

practices, individual patient choice and circumstances, and general

awareness of the benefit among the public and professional communities.

In addition, recent federal oversight of compliance with patient eligibility

requirements may have affected certain beneficiaries’ use of the hospice

benefit.

Physicians initiate most referrals to hospice, and they may continue to

care for their patients after enrollment as part of the hospice team.

Because patients and their families rely heavily on physician

recommendations for treatment, including recommendations for end-oflife care, physicians are an influential factor in a patient’s entry into

hospice. However, the research literature indicates that not all physicians

are comfortable discussing end-of-life care, and some may hesitate to

suggest hospice care for other reasons. Specifically, research has shown

that many physicians are poorly trained in care of the dying and are often

uncomfortable discussing options for end-of-life care or the cessation of

curative treatment. In addition, some physicians may not be aware that

they can continue to provide services after the beneficiary has entered

hospice and may delay referral out of concern about losing control of the

patient’s care.

Even when the issue has been broached, some beneficiaries choose

instead to continue curative or life-extending treatments. Medicare

beneficiaries’ use of hospice services requires acceptance that death is

near. Once a patient is enrolled, no other services related to the patient’s

terminal condition are covered under Medicare. Beneficiaries who do not

consider hospice care may be unwilling to confront the terminal nature of

their illness. The Institute of Medicine (IOM) noted that patients in the

Multiple Factors

Influence the Use of

Hospice Benefits

Physician Practices,

Patient Preferences, and

Public Awareness Affect

Hospice Use
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 8 GAO/T-HEHS-00-201

United States are influenced by the general American unwillingness to

accept limits of all types, including those of aging and death.6 A Gallup poll

in 1996 found that although a majority of people expressed interest in

hospice care, most also said they would still seek curative care.

Beneficiary circumstances may complicate the initiation of hospice

services. For example, because hospice is designed to allow the

beneficiary to remain at home, some hospice programs limit participation

to beneficiaries who have a caregiver at home. Improvements in cancer

care and the addition of new treatment options for other common chronic

conditions may be prompting some beneficiaries to pursue new curative

options until very shortly before death, thus contributing to the trend of

shorter hospice stays.

Public and professional awareness of hospice also influences the use of

the Medicare benefit. The need for greater public and professional

knowledge and awareness of options for end-of-life care—including

hospice—has been highlighted recently by IOM, in recent congressional

hearings, and in several other public forums. Patient advocacy groups,

medical societies, and others have initiated a range of educational efforts

designed to increase awareness of hospice care and its benefits. For

example, the American Medical Association is developing a core

curriculum for educating physicians in end-of-life care. The Medicare

Rights Center, a consumer advocacy and education organization, is

conducting a national campaign to increase awareness of the Medicare

hospice benefit among health professionals. Also, the National Hospice

and Palliative Care Organization has published a variety of materials on

public education and outreach strategies for its members.

In 1995 and 1996, the Department of Health and Human Services’ (HHS)

Office of the Inspector General (OIG) investigated the eligibility status of

Medicare beneficiaries receiving hospice services, as part of a larger

investigation of fraud and abuse in Medicare. Patient advocacy groups and

the hospice industry assert that this federal scrutiny of compliance with

the 6-month eligibility rule has had a chilling effect on entry into hospice

for noncancer beneficiaries, for whom it may be more difficult to establish

a 6-month prognosis with confidence. They contend that hospice providers

are more cautious about admitting beneficiaries with noncancer diagnoses

6Institute of Medicine, Approaching Death: Improving Care at the End of Life (Washington, D.C.:

National Academy Press, 1997).

Federal Oversight of

Eligibility May Have Had

an Effect on Beneficiaries’

Use of Services
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 9 GAO/T-HEHS-00-201

as a result, leading to delays in hospice entry for those wishing to use the

benefit.

Although the percentage increases in beneficiaries electing hospice

slowed somewhat from 1995 through 1998 compared with earlier years, it

is difficult to know how much of this slower growth is attributable to the

effect of federal scrutiny and how much is attributable to other factors,

such as the larger base of beneficiaries already using hospice. Importantly,

the trend toward fewer average days of hospice use began before the

period of federal scrutiny, as shown in figure 3.
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 10 GAO/T-HEHS-00-201

Figure 3: Decline in Days of Hospice Care Began Before Federal Scrutiny Increased

Note: Operation Restore Trust (ORT) was a joint initiative between HCFA, the Office of

Inspector General, and the Administration on Aging designed to identify vulnerabilities in

the Medicare program.

Source: GAO analysis of claims data from the Medicare Hospice Standard Analytic File.

While the OIG reviews were under way, the National Hospice Organization

developed guidelines to assist physicians and hospices in determining a 6-

month prognosis for patients with selected noncancer diagnoses. These

included amyotrophic lateral sclerosis (ALS), dementia, human

immunodeficiency virus (HIV)/acquired immunodeficiency syndrome

(AIDS), heart disease, pulmonary disease, liver disease, stroke and coma,

and kidney disease. In order to enhance accuracy and uniformity in the

claims review process, HCFA distributed these guidelines to the

0

20

40

60

80

100

120

1992 1993 1994 1995 1996 1997 1998

Days

ORT

Investigations

Begun

First OIG Report

on Hospice

Issued

Average Days Used, Noncancer

Average Days Used, Cancer

Median Days Used, Cancer

Median Days Used, Noncancer
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 11 GAO/T-HEHS-00-201

intermediaries that process hospice claims for Medicare.7 The

intermediaries have since adapted them for use as formal local medical

review policies, which specify clinical criteria for establishing a patient’s 6-

month prognosis.8 Intermediaries report that they allow for variation in

individual cases. For example, one medical review policy for heart disease

states that “some patients may not meet the criteria, yet still be

appropriate for hospice care, because of other comorbidities or rapid

decline.”

HCFA instructed the intermediaries to begin medical review of hospice

claims in 1995. Prior to that year, a very small proportion of claims were

reviewed. Four of the five intermediaries reported that, by 1999, review

rates ranged from 0.8 to 4.2 percent of all hospice claims processed.9 They

noted that claims are selected for medical review based on a variety of

factors, including beneficiary length of stay, beneficiary diagnosis, and

provider use of hospice continuous home care or inpatient care.

Sustained growth in the number of hospice providers participating in

Medicare and in their distribution throughout the country suggests that

hospice services are now more widely available to program beneficiaries.

While all sectors of the hospice industry have grown over the past decade,

recent growth has been particularly strong in the for-profit sector and

among large hospice programs. At the same time, hospice industry

officials report growing cost pressures from shorter patient stays and

changes in the practice of palliative care. However, because data on

provider costs are not available, it is not clear how these cost factors

affect providers and beneficiaries.

Until recently, the number of hospices participating in Medicare had

grown each year. As shown in figure 4, the number of Medicare-certified

hospice providers nationwide grew by 82 percent, from 1,208 in 1992 to

7Intermediaries contract with HCFA for paying providers for services provided to Medicare

beneficiaries. They review all hospice claims for accuracy and completeness before payment and

review a sample of claims to confirm that beneficiaries were eligible for the hospice services provided.

8Local medical review policies are medical criteria, specific to a service or diagnosis, that may assist in

determining compliance with program eligibility requirements.

9One fiscal intermediary did not provide data on rates of medical review.

Hospice Care Is More

Widely Available, but

Providers Report Cost

Concerns
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 12 GAO/T-HEHS-00-201

2,196 in 1999.10 Each year during this period, additional hospice programs

became certified for Medicare, although the number of new entrants

declined from 274 in 1994 to 46 in 1999, and the number of hospices

leaving Medicare exceeded the new entrants in 1999. (Many of those

leaving were based in home health agencies (HHA) that may have closed

because of changes in HHA payments enacted in the Balanced Budget Act

of 1997.) The higher number of providers reflects not only new hospices

but also growing participation in Medicare. In 1989, we estimated that

about 35 percent of the approximately 1,700 hospice providers nationwide

participated in Medicare. By 1998, the National Hospice and Palliative

Care Organization estimated that 80 percent of hospices were certified to

serve Medicare patients.

10The total number of Medicare hospice providers peaked at 2,281 in 1998. In 1998 and 1999, hospice

program closures (195) exceeded new program entrants (149) for the first time. A disproportionate

number of hospice closures were among those based in home health agencies (HHA). Although HHAbased hospices represent approximately one-third of all hospices, they accounted for 43 percent of

those that closed over the 2-year period. As we reported in Medicare Home Health Agencies: Closures

Continue, With Little Evidence Beneficiary Access Is Impaired (GAO/HEHS-99-120, May 5, 1999), 14

percent of HHAs closed between October 1997 and January 1999.
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 13 GAO/T-HEHS-00-201

Figure 4: Growth in the Number of Medicare Hospices and New Entrants, 1992-99

Source: GAO analysis of annual Medicare Provider of Service Files.

Over this period, all types of hospice providers grew, in rural and urban

areas, and in almost every state. From 1992 to 1999, the rate of growth was

greatest among for-profit providers and those in rural areas. Also, large

providers accounted for an increasing share of the services delivered. (See

table 2.) The number of for-profit providers increased nearly fourfold and

the number of large hospice programs (those serving 500 or more patients

per year) more than tripled over the period. In addition, the number of

rural providers increased 116 percent while the number of urban-based

providers increased 64 percent. Even with high growth in these sectors of

the industry, the majority of hospices are small programs (with fewer than

100 patients per year), organized as not-for-profit, and located in urban

areas.

0

500

1,000

1,500

2,000

2,500

1992 1993 1994 1995 1996 1997 1998 1999

Number

1,208

1,433

1,667

1,910

2,129

2,238 2,281

2,196

193 240 274 266 243

174

103 46

Active Providers

New Entrants
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 14 GAO/T-HEHS-00-201

Table 2: Growth in Medicare Hospice Programs by Provider

Characteristics, 1992 and 1999

Characteristic Number of hospices

1992 1999

Percent change

1992-99

All hospices 1,208 2,196 82

Type

Freestanding 466 877 88

Hospital-based 327 553 69

HHA-based 403 730 81

Control

For-profit 151 593 293

Not-for-profit 957 1,365 43

Government 63 146 132

Other 36 75 108

Location

Urban 823 1,350 64

Rural 384 829 116

Sizea

Small 795 1,244 56

Medium 370 816 121

Large 43 136 216

Note: The subcategories do not always add to the total because data were not available

for all providers.

a

We categorized hospices as small if they served fewer than 100 Medicare beneficiaries a

year, medium if they served 100 to 499 patients a year, and large if they served 500 or

more beneficiaries a year.

Source: GAO analysis of annual Medicare Provider of Service Files.

Even as the hospice industry has grown, changes in the use of the hospice

benefit and the delivery of hospice care have raised cost concerns among

providers. Industry representatives point out several areas of change that

they contend are adversely affecting the financial condition of providers.

Specifically,

• Under Medicare’s per diem payment system for hospice care, hospices

have traditionally offset the higher-cost days that occur at admission and

during the period immediately preceding death with lower-cost days of

less intensive care.11 For example, costs for admitting and assessing a new

11Hospice representatives we interviewed reported that the hours of nursing, social work, and

administrative time the typical patient requires are nearly twice as great during the first and last weeks

of a patient’s care as they are during the intervening weeks.
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 15 GAO/T-HEHS-00-201

patient, establishing a care plan, and delivering medical equipment are

incurred during the first few days of enrollment and do not vary with the

patient’s period of service. As enrollment periods have declined, hospices

have fewer days over which they can spread the higher costs associated

with the start and end of a patient’s stay.

• As more patients enter hospice later in the course of their terminal illness,

they enter with higher levels of impairment and in need of more intensive

services. In addition, the shift in the mix of patients by diagnosis may have

increased the average service needs for the overall hospice population.

According to the most recent National Home and Hospice Care Survey,

hospice patients with noncancer diagnoses are somewhat more likely than

those with cancer to be functionally impaired and thus may require more

services on a regular basis from hospice agencies.12

• Physicians and patients are calling on hospice programs to provide a

broader array of palliative services than in the past. Costly treatments such

as chemotherapy and radiation—traditionally used for curative

purposes—are increasingly used in the hospice setting to manage pain and

other symptoms. Furthermore, some new palliative care treatment

options, such as the transdermal administration of narcotic pain

medication, may offer better symptom control for some patients but often

at greater expense.

Data to assess how declining patient stays and changes in palliative care

have affected overall provider costs are not available. While specific, more

expensive services may be provided more frequently, the share that these

services currently represent of total costs is unknown. Furthermore, we do

not know the extent to which providing more expensive medications or

treatments to hospice patients may reduce the need for other services

such as nursing visits. HCFA, in response to the Balanced Budget Act

requirements, has begun collecting hospice cost data to use for evaluating

the adequacy of current levels of Medicare reimbursement. Officials

anticipate that audited hospice cost data will be available beginning in late

2001.

Trends in the use of the Medicare hospice benefit during the 1990s

indicate that beneficiaries with all types of terminal diseases are making

use of hospice services in greater numbers every year. In particular, the

12National Center for Health Statistics, The National Home and Hospice Care Survey: 1996.

Conclusions
Medicare: More Beneficiaries Use Hospice;

Many Factors Contribute to Shorter Periods

of Use

Page 16 GAO/T-HEHS-00-201

types of patients selecting hospice have expanded broadly—from mostly

beneficiaries with cancer to a nearly even split among those with cancer

and those with other chronic conditions. In spite of these trends in use and

the widespread availability of hospice providers, patient advocates and the

industry are concerned that the Medicare hospice benefit is underused.

Because many factors influence the use of hospice care, however,

potential demand is difficult to determine. The goal remains that the

program ensure that beneficiaries understand their rights and options and

receive appropriate care that is tailored to their needs and preferences at

the end of life.

Mr. Chairman, this concludes my statement. I would be happy to answer

any questions from you and other members of the Committee.

For future contacts regarding this testimony, please call Janet Heinrich,

Associate Director, Health Financing and Public Health, at (202) 512-7119.

Others who made key contributions include Rosamond Katz, Assistant

Director; Eric Anderson; Jenny Grover; and Wayne Turowski.

(201100)

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