Do Live Discharge Rates Increase as Hospices Approach Their Medicare Aggregate Payment Caps?

The rate of live discharge from hospice and the proportion of hospices exceeding their aggregate caps have both increased for the last 15 years, becoming a source of federal scrutiny. The cap restricts aggregate payments hospices receive from Medicare during a 12-month period. The risk of repayment and the manner in which the cap is calculated may incentivize hospices coming close to their cap ceilings to discharge existing patients before the end of the cap year.The objective of this work was to explore annual cap-risk trends and live discharge patterns. We hypothesized that as a hospice comes closer to exceeding its cap, a patient's likelihood of being discharged alive increases.We analyzed monthly hospice outcomes using 2012-2013 Medicare claims.Adjusted analyses showed a positive and statistically significant relationship between cap risk and live discharges.Policymakers ought to consider the unintended consequences the aggregate cap may be having on patient outcomes of care.

Duke Scholars

Author Donald H. Taylor Jr. Sanford School of Public Policy