GAO Report Focuses on Hospice Payment System

WASHINGTON—The United States Government Accountability Office (GAO) recently released a report highlighting discrepancies in Medicare hospice payments, revealing what they say could be $7.6 billion in savings if per-visit payment rates were utilized.

The routine homecare that makes up the bulk of Medicare hospice care for its beneficiaries is primarily delivered through visits made by nurses, aides and social workers. GAO said that it found in 2024 for selected beneficiaries and hospices, low-visit hospices (the 20% of hospices that delivered the fewest visits per week per beneficiary) averaged about half as many visits per week as high-visit hospices, the 20% that delivered the most visits per week. Low-visit hospices delivered a total of 2.5 visits per week on average, compared to a total of 5.5 visits per week on average for high-visit hospices.

Because Medicare’s hospice daily payment rates are the same regardless of the number of visits delivered, the GAO said Medicare paid low-visit hospices twice as much per visit as high-visit hospices, on average. Also, Medicare effectively paid more per visit under hospice payment rates than it would have under rates for comparable home health visits.

“Hospice routine homecare visits and home health visits are comparable because they involve similar services provided by the same types of health care professionals,” the GAO said in its report. “GAO’s analysis of claims from 2022 through 2024 showed that Medicare paid about $16.7 billion for the hospice routine home care but estimated Medicare would have paid about $9.1 billion if the care had been reimbursed under the home health per-visit payment rates for comparable services—a $7.6 billion difference.”

Though GAO found Medicare spending for routine homecare is higher than what it would be under home health per-visit rates, Centers for Medicare & Medicaid Services (CMS) officials said the statute requires daily hospice payment rates and does not provide flexibility for further refinements to the payment structure beyond those made in 2016 and 2020. Officials also said CMS will continue to monitor hospice utilization to determine if there is a need for further refinements consistent with their statutory authority. 

GAO recommends in the report that Congress consider directing the Secretary of the Department of Health and Human Services to revise the hospice payment system for routine home care services to better promote payment efficiency and realize savings for the Medicare program.

The National Alliance for Care at Home (the Alliance) released its response to the GAO findings, urging that efforts be directed at rooting out “bad actors,” whose data they said informed the GAO report and its findings, and ensuring legitimate, high-quality hospices can continue providing needed end-of-life care.  

“The GAO report asserts that shifting hospice to per-visit payment rates comparable to home health would have reduced Medicare spending by $7.6 billion for a selected group of beneficiaries in 2024,” the Alliance said. “However, these savings are generated in part by paying less to ‘low visit’ hospices that are concentrated in known high-fraud areas. Discussions of hospice reform should be focused on first stopping any fraudulent activity from wasting Medicare dollars, which would result in greater savings than those identified in this report.” 

The Alliance said the report fails to recognize the distinct differences between the home health and hospice benefit structures, regulatory requirements and skillsets needed to deliver care. 

“The hospice daily payment rate is a deliberate design that reflects the nature of hospice care,” the organization said. “Unlike home health, hospice is a holistic, comprehensive benefit that includes all services needed for the palliation and management of a patient’s terminal condition, such as medication, supplies, equipment, skilled nursing, aide services, social work, chaplaincy, homemaker services, grief and bereavement support, physician visits, care coordination and 24/7 on-call availability.”