Medicare

Nearly 360,000 Medicare beneficiaries enrolled in a hospice program in 1998, more than twice the number that chose hospice care in 1992. Although cancer patients account for more than half of Medicare hospice patients, growth in use has been particularly strong among individuals with other diagnoses, such as heart disease, lung disease, stroke, and Alzheimer's disease. Many are doing so closer to the time of death; the average period of hospice care fell from 74 days in 1992 to 59 days in 1998. Greater federal scrutiny of compliance with program eligibility requirements may have contributed to a decline in beneficiaries' average number of days of hospice care. Between 1992 and 1999, the number of hospices participating in Medicare rose 82 percent, with large providers and those in the for-profit sector accounting for a greater proportion of the services delivered. At the same time, hospice industry officials report cost pressures from declining patient enrollment and increased use of more expensive forms of palliative care, such as radiation and chemotherapy, for pain relief.

GAO noted that: (1) the number of Medicare beneficiaries choosing hospice services has increased substantially; (2) in 1998, nearly 360,000 Medicare beneficiaries enrolled in a hospice program, more than twice the number who elected hospice in 1992; (3) of Medicare beneficiaries who died in 1998, about one in five used the hospice benefit, but use varies considerably across the states; (4) although cancer patients account for more than half of Medicare hospice patients, growth in use has been particularly strong among individuals with other common diagnoses such as heart disease, lung disease, stroke, and Alzheimer's disease; (5) although more beneficiaries are choosing hospice, many are doing so closer to the time of death; (6) the average period of hospice use declined from 74 days in 1992 to 59 days in 1998; (7) half of Medicare hospice users now receive care for 19 or fewer days, and care for 1 week or less is common; (8) many factors influence the use of the Medicare hospice benefit; (9) decisions about whether and when to use hospice depend on physician preferences and practices, patient choice and circumstances, and public and professional awareness of the benefit; (10) along with these factors, increases in federal scrutiny of compliance with program eligibility requirements may have contributed to a decline in the average number of days of hospice care that beneficiaries use; (11) the growth in the number of Medicare hospice providers in both urban and rural areas and in almost every state suggests that hospice services are more widely available to program beneficiaries than in the past; (12) between 1992 and 1999, the number of hospices participating in Medicare increased 82 percent, with large providers and those in the for-profit sector accounting for a greater proportion of the services delivered; (13) at the same time, hospice industry officials report cost pressures from declining patient enrollment periods and increased use of more expensive forms of palliative care; (14) because reliable data on provider costs are not available, however, the effect of these reported cost pressures on the overall financial condition of hospice providers is uncertain; and (15) as required by the Balanced Budget Act of 1997, the Health Care Financing Administration began collecting information in 1999 from hospice providers about their costs to allow a reevaluation of the Medicare hospice payment rate.