Errors or other inconsistencies with the payment cap can have significant consequences for providers, and sales and marketing staff can help hospices achieve a healthy balance.
The cap is designed to prevent overuse of hospice, put controls on Medicare spending and foster greater access to care among patients. For Fiscal Year 2024, the U.S. Centers for Medicare & Medicaid Services set the cap at $33,394. In 2025, this will rise to $34,465.
If a hospice has a cap liability, they will have to repay that amount to Medicare. In some situations, a hospice might face additional monetary penalties, interest charges or referrals to the U.S. Treasury Department in severe cases.
Patient length of stay has substantial influence on a hospice’s ability to manage the aggregate cap. One key to cap management is to find an appropriate mix of long length-of-stay patients and those expected to be in hospice for a shorter time, Ryan Klaustermeier, vice president of professional services at Axxess, said during a presentation at the National Hospice and Palliative Care Organization (NHPCO) Annual Leadership Conference.
“The simple math is just that you need to have a balance right between your long length of stay and your short length of stay patients, and also be watching where those live discharges are occurring and what types of diagnoses that you’re admitting to your program,” Klaustermeier said. “It’s well known, you know which diagnoses are going to drive a longer length of stay and which diagnoses typically have a shorter length of stay associated with them.”
When analyzing length of stay, providers should pay close attention to two important data points — diagnosis and site of care, ideally with referral partner-specific data, according to Christina Andrews, senior director of professional services at Axxess.
“Going back to data by referral partner, what is the length of stay look like by diagnoses and where are you serving those patients,” Andrews said at the NHPCO conference. “Developing this cap strategy, it is going to give you the opportunity to lean into your branding and messaging … Why should they select your hospice organization and why should they refer their hospice patients to you, helping you to create that balanced length of stay?”
Having referral-partner specific data can go a long way towards helping hospices manage their resources, according to Andrews. For one, Sales and marketing staff can benefit from knowing what types of patients each provider is referring to their hospice, as well as the type of diagnosis and site of care, such as the patient’s home or assisted living or other facility.
Armed with these data, sales teams can contribute to effective payment cap management. A key to this is balancing the patients who are expected to have a longer length of stay with those whose stays will likely be shorter.
“So really digging down into the intricacies, how many nursing facilities did we call upon this week versus how many hospital systems? That really can help to swing the pendulum,” Andrews said in the presentation. “So we started to get into the specificity of the actual referral partners themselves, and then we also layered in the actual diagnoses. So then, we can say that we actually had more calls to an assisted living facility. In essence, the number one admitted diagnosis was neurological. We need to pivot next week and focus on physician practices who lean into cancer.”
Patients with neurological diseases like Alzheimer’s are more likely to have longer lengths of stay, as are patients in an assisted living facility compared to those who reside at home.
The average length of stay for a patient with a neurological condition in 2022 was 159 days, compared to 106 days for those with cardiac conditions and 52 days for those with cancer, according to the National Alliance for Care at Home.
By site of care, average length of stay for patients in assisted living reached 165 days in 2022, compared to 109 days for nursing home residents and 98 days for those receiving care at home, the Alliance reported.
One strategy that can help with cap management, while integrating sales personnel, is a daily cap call, Andrews said. These are daily calls in which stakeholders in an organization discuss referral trends and how they are affecting progress against the payment cap. These calls can help the sales team design their near-term strategy.
“By no means am I saying that I want you to create a strategy to go out and admit only short length of stay patients and not to admit patients who might have a longer length of stay. Every patient who is eligible for the hospice benefit deserves care,” Andrews said. “But data is key to success.”
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