Have Hospice Costs Increased After Implementation of the Hospice Quality-Reporting Program?

Area of Science:

• Health Services Research
• Healthcare Economics
• Quality Improvement

Background:

• The Centers for Medicare & Medicaid Services implemented a Hospice Quality-Reporting Program in 2014.
• This program mandated standardized patient-level quality data collection and submission for hospices nationwide.

Purpose of the Study:

• To determine if the quality-reporting requirement impacted hospice operational costs.
• Specifically examining increases in total costs, general costs, and visiting services costs.

Main Methods:

• A cross-sectional study utilized Medicare hospice cost reports from 2012 and 2014, linked with hospice claims.
• Costs per patient day (PPD) for total, general, and visiting services were measured for freestanding hospices.
• Hierarchical random effects models were employed to estimate incremental costs, adjusting for various hospice and market characteristics, stratified by ownership type.

Main Results:

• Both for-profit and nonprofit hospices reported increased total costs PPD and general services costs PPD in 2014 compared to 2012.
• Adjusted models revealed higher total costs PPD in 2014 for nonprofit hospices ($10.55) and for-profit hospices ($6.43).
• Increases in general and visiting services costs PPD ranged from $3.15 to $5.87, with economies of scale observed for larger patient volumes and longer lengths of stay.

Conclusions:

• The implementation of the Centers for Medicare & Medicaid Services Hospice Quality-Reporting Program was associated with increased hospice costs.
• Further research is needed to ascertain if these cost increases translate into tangible benefits for patient care.