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

Abstract

Context: The Centers for Medicare & Medicaid Services Hospice Quality–Reporting Program introduced the requirement that hospices nationwide begin collecting and submitting standardized patient-level quality data on July 1, 2014. Objectives: This study examined whether this requirement has increased hospice total costs, general costs, and visiting services costs. Methods: We conducted a cross-sectional study using data from the 2012 and 2014 Medicare hospice cost reports linked to hospice claims. We measured total costs per patient day (PPD), general costs PPD, and visiting services costs PPD for freestanding hospices. We estimated the incremental costs of operating in 2014 vs. 2012 using hierarchical random effects models and adjusting for year, wage index, care volume, case-mix, and hospice and market characteristics, stratified by hospice ownership type. Results: Both for-profit and nonprofit hospices reported higher total costs PPD and general services costs PPD in 2014 than 2012. Nonprofit hospices also reported higher general costs PPD in 2014 than 2012. In adjusted models, the total costs PPD in 2014 were $10.55 higher than in 2012 for nonprofit hospices and $6.43 higher for for-profit hospices. The increase in general costs PPD and visiting services costs PPD ranged from $3.15 to $5.87 by ownership and type of costs. Both for-profit and nonprofit hospices showed lower costs PPD for all types associated with more patients and longer length of stay. Conclusion: Hospice costs increased after the Centers for Medicare & Medicaid Services Hospice Quality–Reporting Program quality data collection/submission requirement. Complementary studies need to understand whether increased costs brought additional benefits.