Explaining variation in hospice visit intensity for routine home care

Area of Science:

• Health Services Research
• Health Economics
• Gerontology

Background:

• Medicare hospice payments use a flat per diem rate, lacking case-mix adjustment.
• Previous research indicates significant variation in visit intensity throughout hospice episodes.
• Concerns exist regarding financial incentives for routine home care and payment efficiency.

Purpose of the Study:

• To analyze hospice visit intensity variations based on patient, hospice, and episode characteristics.
• To inform policy discussions on improving hospice payment methodologies.
• To assess the potential for case-mix adjustment in hospice reimbursement.

Main Methods:

• Observational study using 2010 Medicare hospice claims data.
• Constructed multiple observations per episode phase (e.g., days 1-14, 15-30).
• Regressed episode phase and observed characteristics on average routine home care visit intensity, controlling for patient and hospice fixed effects.

Main Results:

• Hospice visit intensity demonstrated substantial variation across different episode phases.
• Observed patient and hospice characteristics explained less than 4% of the daily visit intensity variation.
• Unobserved patient characteristics accounted for approximately 85% of the remaining variation in visit intensity.

Conclusions:

• Case-mix adjustment for hospice payments, based on commonly observed factors, would offer minimal improvements.
• Current payment structures may not adequately reflect the actual care intensity variations.
• Further research into unobserved patient factors may be needed for more effective payment reform.