Medicare Hospice Benefit

• Physician Services
• Nursing Care
• Medical Appliances and supplies
• Drugs for symptom management and pain relief
• Short-term inpatient and respite care
• Homemaker and home health aide services
• Physical therapy, occupational therapy and speech/language pathology services
• Counseling
• Social Work service
• Spiritual Care availability
• Volunteer participation
• Bereavement services

When a patient receives these services from a Medicare-certified hospice, almost the entire cost is covered by the benefit, and the only expense to the patient is limited cost-sharing for outpatient drugs and inpatient respite care.

Drugs or biologicals – The hospice can charge five percent of the reasonable cost, up to a maximum of $5, for each prescription for outpatient drugs or biologicals for pain relief and symptom management.

Inpatient respite care – The hospice may periodically arrange for inpatient care for the patient to give temporary relief to the person who regularly provides care in the home. Respite care is limited each time to a stay of no more than five days. The patient can be charged about $5 per day for inpatient respite care. The charge, which is subject to change each year, varies slightly depending on the hospice’s geographic area.

Who is eligible for the Medicare hospice benefit?
Medicare coverage for hospice care is available only if:

• The patient is eligible for Medicare Part A;
• The patient’s doctor and the hospice medical director certify that the patient is terminally ill with a life expectancy of six months or less, if the disease runs its normal course;
• The patient signs a statement choosing hospice care instead of standard Medicare benefits for the terminal illness; and
• The patient receives care from a Medicare-approved hospice program.

How long can a patient retain care under the Medicare benefit?
A Medicare beneficiary may elect to receive hospice care for two 90-day periods, followed by an unlimited number of 60-day periods, and when necessary, an extension period of indefinite duration. The benefit periods may be used consecutively or at intervals. Regardless of whether they are used one right after the other or at different times, the patient must be certified as terminally ill at the beginning of each period.

A patient has the right to cancel hospice care at any time and return to the standard Medicare coverage, then later re-elect the hospice benefit if another benefit period is available. If a patient cancels during one of the first three benefit periods, any days left in that period are lost. For example, if a patient cancels at the end of 60 days in the first 90-day period, the remaining 30 days are forfeited. The patient is, however, still eligible for the second 90-day period, the 30-day period, and the indefinite extension. If cancellation occurs in the final period, the patient returns to standard Medicare coverage and cannot use the hospice benefit again.

Besides having the right to discontinue hospice care at any time, patients also may change hospice programs once during each benefit period.

Studies confirm that it is possible to provide compassionate and comprehensive hospice care to terminally ill patients and also saves money over traditional medical treatment. An Analysis of the Cost Savings of the Medicare Hospice Benefit was conducted by Lewin-VHI, a Washington based health care consulting firm.

According to the study, hospice care – designed so patients do not die in pain, alone or without personal dignity – saves money while meeting these very basic and important human needs. Hospice care is an interdisciplinary, individualized form of care that emphasizes pain control and symptom management rather than attempting curative treatment.

The study compared the relative cost of hospice care to conventional care for medicare beneficiaries with cancer. Analysis of beneficiaries’ claims found that for every dollar Medicare spent on hospice patients, it saved $1.52 in Medicare Part A and Part B expenditures.

"In an environment where there is such intense scrutiny of health care costs, this study shows that hospice services more than pay for themselves," said John J. Mahoney, past president of the National Hospice & Palliative Care Organization. "I would hope that managed care and other organizations would take this information into consideration when deciding what services they will offer to terminally ill patients and their families."

Other results of the study include:

As found in an earlier CMS study, savings with hospice care were greatest in the last months of life. These savings totaled $3,192 in the last month of life.

According to Mahoney, these new findings are particularly encouraging given the number of changes in the health care environment over the past six years, many of which might impact the relative cost-savings associated with hospice. These changes include:

• The full implementation of Medicare’s Prospective Payment System for hospitals;
• Increased payment rates for hospice;
• A growing number of Medicare beneficiaries choosing hospice; and
• Expanding lengths of enrollment for hospice users.

While the majority of hospice patients have cancer, hospice also care for people suffering other terminal illnesses, such as AIDS and heart disease. Contemporary hospice care developed in response to concerns that traditional medical care, with its emphasis on technology, had become increasingly insensitive to the needs of terminally ill patients and their families.