HR 3454 Medicare Hospice Reform and Savings Act of 2009

HR 3454 Legislation

HR 3454 Medicare Hospice Reform and Savings Act of 2009 will amend title XVIII of the Social Security Act to reform payments and coverage for hospice care.

HR 3454 Legislation Information and Resources:

H.R. 3454: Medicare Hospice Reform and Savings Act of 2009 is an integrated 4-Part reform that would save over $1 billion annually, while improving hospice access and reforming the hospice cap.

National Coverage Determinations (NCDs) – Establishing evidence-based hospice NCDs in 2010 will save $1 billion to $2.5 billion annually and $5 billion to $12.5 billion from 2010 – 2014, while increasing timely patient access to hospice care. Medicare’s current hospice Local Coverage Determinations are not evidence-based, and have resulted in a morass of arbitrary eligibility standards that in practice vary by state, by hospice, by diagnosis and possibly by race. As a result, timely hospice access in America is persistently low and varies widely by state, by diagnosis and by race. This increases Medicare’s costs.

NCDs would clarify eligibility and increase access from 41% to 60% over the next five years. Such access would save $1 billion per year, according to Duke University’s 2007 research.
Clarifying eligibility would also increase timely access for 75% of hospice users whose current hospice stays are short. Increasing short stays by an average of only 7 days would save $500 million per year, again according to Duke’s 2007 research.
NCDs would improve the accuracy of hospice eligibility decisions, and would stop the growth in, and subsequently reduce, length of stay above the 90^th percentile, saving $1 billion annually.

Cap Reform – Reforming the retrospective 1982 hospice cap with a pay-as-you-go 10% reduction in per diem routine home care payments as patient stays exceed 180 days, and directing CMS to compromise 2006 – 2008 Cap demands to allow law-abiding hospices to survive, will save Medicare $600 million from 2010 through 2014. It will also allow hundreds of quality hospices to survive the current hospice cap crisis, and to continue to provide cost-effective hospice access for tens of thousands of beneficiaries, especially in rural, minority and economically disadvantaged communities.

Reducing routine home care payments to hospices by 10% as patient stays exceed 180 days will save CMS about $400 million annually, or $2.0 billion from 2010 through 2014.
Instructing CMS to compromise 2006, 2007 and 2008 Cap demands to allow law-abiding hospices to survive would cost a maximum of $400 million, on a one-time basis only, and it will preserve access to cost effective care for tens of thousands of beneficiaries.
Cap reform will reduce CMS hospice payments by $1.6 billion over the next 5 years. Partially offsetting this, CMS will forego collections of no more than $200 million annually from the old 1982 cap. Net, a reformed pay-as-you-go Cap will save $600 million over the next 5 years while at the same time dramatically reducing CMS’ administrative burden and credit risk.

Payment reform - Part 3 of this hospice reform legislation is budget-neutral in every year; it will improve hospice payment accuracy and patient access by increasing routine home care payments for the first five and last five days of every patient’s hospice stay by 20% per diem, self-funded by reducing per diem payments by a further 2.5% (in addition to the 10% in Part 2) as patient stays exceed 180 days.

This reform will benefit hospices with relatively short lengths of stay that argue that short-stay patients’ expenses are not met by current routine home care per diem reimbursement. The limited payment shift in this Part 3 strikes a balance between meeting the legitimate expenses of short-stay patients, while ensuring that we do not reward hospices that fail to provide timely choice to the terminally ill Medicare beneficiaries in their communities.

Restore the full hospice BNAF, Self-Funded from NCD savings in Part 1 Above - Establishing NCDs will generate measurable savings of $1 billion to $2.5 billion annually for Medicare; full restoration of the BNAF should cost no more than $0.5 billion annually. The BNAF can be fully restored at no cost to the federal government, with significant annual savings left over.

Support HR 3454 Medicare Hospice Reform and Savings Act of 2009

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