Medicare Payment Policy

Hospice services
Chapter summary
The Medicare hospice benefit covers palliative and support services for
beneficiaries with a life expectancy of six months or less. Beneficiaries must
“elect” the Medicare hospice benefit; in so doing they agree to forgo Medicare
coverage for conventional treatment of their terminal condition. In 2011, more
than 1.2 million Medicare beneficiaries received hospice services from over
3,500 providers, and Medicare expenditures totaled about $13.8 billion.
Assessment of payment adequacy
The indicators of payment adequacy for hospices, discussed below, are
generally positive.
Beneficiaries’ access to care—Hospice use among Medicare beneficiaries
has grown substantially in recent years, suggesting greater awareness of
and access to hospice services. In 2011, hospice use increased across all
demographic and beneficiary groups examined. However, hospice use rates
remained lower for racial and ethnic minorities than Whites.
• Capacity and supply of providers—The supply of hospices has increased
substantially since 2000 and continued to grow in 2011, almost entirely
due to growth in the number of for-profit providers.
• Volume of services—The proportion of beneficiaries using hospice
services at the end of life continues to grow, while average length of stay
C H A p t e R 12
In this chapter
• Are Medicare payments
adequate in 2013?
• How should Medicare
payments change in 2014?
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