There is a recent trend developing in hospice care for those covered under the Medicare Advantage Plans. For those unfamiliar with Medicare Advantage plans, they are plans where Medicare-eligible persons receive coverage from a private health insurer through Medicare. They generally have lower premiums than Medicare Supplement plans (also known as Medicare “Part B” Plans), but require patients to make co-payments. They typically offer additional coverage which is not available through Medicare.
A potential area of abuse in a Medicare Advantage Plan is in what they do not cover. Some, but not all Medicare Advantage plans, do not cover hospice care. In fact, once a person is referred to hospice care by an in-network doctor, the patient is no longer on the Plan’s “book” and Medicare becomes the primary payor. Unfortunately, because Medicare Advantage plans are offered through private health insurers who are looking at profits, this presents potential for abuse. If a person begins requiring significant amounts of treatment in their advanced age, it can become profitable for the private health insurer to place the patient on hospice as soon as possible. This maximizes profit for the company, while letting Medicare pay the expensive hospice care bills. Who loses in all of this? The patient and his/her family. Because the insurance companies are motivated to get a person referred to hospice to save money, patients who can still be rehabilitated or treated may end up being placed on hospice simply because the insurer wants to avoid extra costs.
There has been a big movement recently to enact “carve-in” provisions which would require private insurers to cover hospice care. As one might expect, the health insurers are deeply opposed to this. Even the National Hospice and Palliative Care Organization (NHPCO) is opposed to it. One may ask why would the NHPCO be opposed to carve-in provisions? Again, it all comes from the toxic blend of business and health. Hospice care providers like Medicare reimbursement rates because they are most likely higher than a private insurer would want to pay. Also, an additional consideration for hospice care providers is that as it stands hospice care providers only need to be certified by Medicare to qualify for reimbursement. If private insurers were forced to reimburse them directly, they would place additional regulations and requirements on the hospice providers.
Hospice providers and health insurers both argue that if “carve-in” provisions are added to Medicare Advantage programs, they will jeopardize the quality of care one receives in hospice. Hospice providers argue that if they are forced to come to terms with private insurers, they may be forced to contract for less money in order to be included in the health insurers’ network. Essentially, they argue that if hospice care providers do not agree to the rates proposed by health insurance companies they will be placed at a serious competitive disadvantage. They also claim that they will be forced to meet the additional requirements set forth by the insurers to qualify for payment. This means that they will be subject to Medicare and the private health insurer’s regulations and could potentially be forced to take less money.
On the other hand, health insurers want to outright avoid the additional costs of hospice care. This creates a situation where even though the two sides would be at odds should carve-in provisions be enacted, for the moment both insurers and providers are combined in a unified front against “carve-in” provisions.
Both the hospice care providers and the health insurers claim carve-in provisions will reduce the quality of care provided to elderly patients. Essentially both sides argue that it will raise the costs of private insurance, force dying patients to “choose” from a limited list of hospice care providers, and force private insurers to provide less expensive palliative care and support. The merit of these claims is questionable.
As it stands, Medicare Advantage plans have incentive to “dump” patients into hospice care whether they need it or not. Carve-in provisions would in effect put an end to this, but then there is the possibility that insurance companies may only cover less expensive services. While this is certainly a possibility, carve-in provisions still present the best option. Based on the profitability of the health insurance industry and the fact that Medicare Advantage Plans already cover everything under Medicare Parts A and B, it seems highly unlikely that requiring them to cover hospice care will be anything more than a drop of water in the bucket.
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