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OIG Recommends Changes to Hospice Benefit Payments

According to a new report from the Office of Inspector General (“OIG”) published on January 13, 2015, the OIG is concerned with the financial incentives created by the current Medicare payment system with regard to hospice beneficiaries in assisted living facilities. For example, hospices received significantly higher Medicare payments for beneficiaries in assisted living facilities than for beneficiaries in other settings – even though the OIG reports that hospice beneficiaries in assisted living facilities often required less complex care. Additionally, the OIG claims that for-profit hospices received significantly higher Medicare payments per beneficiary than non-profit hospices.

In the report, the OIG recommends changes to the current payment system to prevent hospices from targeting beneficiaries in assisted living facilities in order to make a higher profit. The OIG recommends that the Centers for Medicare and Medicaid Services:

1) reform payments to reduce the incentive for hospices to target beneficiaries with certain diagnoses and those likely to have long stays;
2) target certain hospices for review;
3) develop and adopt claims-based measures of quality;
4) make hospice data publicly available for beneficiaries; and
5) provide additional information to hospices to educate them about how they compare to their peers.

For more information, or for any hospice-related information, please contact Adrienne Dresevic, Esq., at (248) 996-8510 or

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