While Congress debated passage of a $700 billion financial-market rescue plan last week, a 1.1 percent adjustment in pay for the nation's hospices was phased out.
For Jan Jones, chief executive of Nashville-based Alive Hospice, the cut, which equates to $1 million over three years, was bad news. Smaller hospices with fewer resources could be hurt even more, Jones said, leading to cutbacks in end-of-life care for many patients and fewer services in rural areas.
Separately, Tennessee hospices already were bracing for an average 2.5 percent decrease this year in Medicare reimbursements related to wages of their nurses and therapists not rising as much as in other urban areas nationwide, said Mike Dietrich, executive director for the Tennessee Hospice Organization, a trade group.
"It could potentially create an access problem," he said.
For the past decade, hospices had been getting an extra payment to make up for a change in 1997 in the way in which reimbursements were determined.
Despite the phase-out, the industry would still get a 2.5 percent increase in cost-of-living payments for this fiscal year.
Still, Tennessee hospices expect a decline of at least 1.1 percent in overall payments because any gains would be neutralized by the local wage adjustment, Dietrich said.
Hospices lobbied Congress to delay the phase-out, which is expected to save Medicare $2.2 million over five years. They also sued the Centers for Medicare and Medicaid Services, Medicare's overseer, questioning its authority to make the cuts.
Support isn't expectedAnalysts, meanwhile, see little likelihood that hospices would get support from Congress or a favorable ruling from the courts.
"That's because it's a small part of Medicare spending and Congress isn't working that well together," said Derrick Dagnan, an analyst tracking health-care services for Avondale Partners in Nashville. Hospices represent less than 3 percent of Medicare's $300 billion annual spending.
Proponents of hospice care cite a recent Duke University study that showed hospices save Medicare an average of $2,300 per patient or about $2 billion a year because there is less aggressive treatment to cure a terminally ill person in his or her final days and weeks.
Also, hospice services often are provided in a patient's home rather than in a hospital, where it costs more money to provide care, Dietrich said.
"If people don't have access to hospice care, they would use the most expensive health-care system and it would cost more money," said Jones of Alive Hospice.
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