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Will Changes to Medicare Payment Rates Alter Hospice's Cost-Saving Ability?
Donald H Taylor1,2, Nrupen A Bhavsar3, Janet H Bull4
11 Sanford School of Public Policy, Duke University , Durham, North Carolina.
Journal of Palliative Medicine
|February 8, 2018
Summary
Medicare hospice care may continue to offer cost savings following the 2016 payment reform. Analysis shows savings across most diagnoses, with dementia patients incurring higher costs.
Area of Science:
- Health economics
- Geriatric care
- Public health policy
Background:
- Medicare implemented a revised hospice payment model on January 1, 2016.
- This model features a two-tiered per diem rate structure and retrospective service intensity add-on payments.
Purpose of the Study:
- To evaluate the impact of the 2016 Medicare hospice payment structure change on potential cost savings.
- To determine if the new payment model alters the cost-effectiveness of hospice care.
Main Methods:
- Analysis of Medicare decedents' claims data from North Carolina (2009-2010).
- Utilized propensity score matching, logistic regression, and sensitivity analysis to compare costs under old and new payment structures.
Main Results:
- Hospice care reduced overall Medicare costs under both 2009-2010 and 2016 payment rates.
- Estimated mean cost savings were $1,527 with actual rates and $2,105 with new rates (p < 0.001).
- Significant cost savings observed for males, cancer, debility/failure to thrive, and congestive heart failure diagnoses; dementia patients incurred higher costs.
Conclusions:
- The 2016 Medicare hospice payment rate changes are likely to sustain cost savings.
- Hospice care demonstrates cost-effectiveness for most diagnoses, excluding dementia, under the revised payment structure.