Healthcare Reform
December 30, 2016

Would a Repeal of the Affordable Care Act Affect Hospice?

Two doctors speaking to each other in hallway

Will the Medicare hospice benefit change?

A change of presidential administration is bringing change to Washington, DC. Much of the focus through the 2016 campaign and in the presidential transition was on repealing the Affordable Care Act (ACA), commonly known as “Obamacare.”

Currently, physicians, providers, payers and administrators are navigating an uncertain world on many fronts, including the future of the insurance marketplaces, advanced payment reforms and other ACA initiatives.

Outright or partial repeal of the ACA would have little effect on palliative and hospice services, which address the most seriously, chronically and terminally ill patients.

The Medicare hospice benefit helps caregivers

There are 40 million family caregivers in the United States, defined as anyone who provides physical/emotional care for an ill or disabled loved one at home. For those caregivers dealing with loved ones with end-stage terminal illness, hospice services provide physical and emotional support for patients, caregivers and loved ones.

More than 90 percent of hospice patients are Medicare beneficiaries using the Medicare hospice benefit, originally passed by Congress in 1982 and signed into law by President Ronald Reagan. Medicare is a separate entity from the ACA. Reform or repeal efforts to the ACA will not affect Medicare. It is unknown yet whether substantial changes to Medicare are being considered.

Value-based payment models

One of the goals of the ACA is to introduce “fee-for-value” payments, in which providers are reimbursed for quality, reducing costs by eliminating the “fee-for-service” model. As a capitated, per-diem rate, hospice is already reimbursed through Medicare as a value-based payment.

Medicare is progressively moving toward integrated finance and delivery models, but hospice services have been excluded from these models (except for the Medicare Shared Savings Program). Hospice continues to be a “carve-out” from Medicare Advantage plans, with original fee-for-service Medicare covering costs. None of the Medicare Bundled Payments for Care Improvement models include hospice and palliative care services.

All of those initiatives and reforms continue unchanged today, with the goal of improving care for Medicare beneficiaries while reducing costs to the healthcare system. The early success of many of the new models has led private insurers to adopt similar models, independent of any changes to government healthcare reimbursement.

Hospice care ensures compassionate care by a trained, interdisciplinary team that understands that, near the end of life, both patient and family need physical, emotional and spiritual support. Continuing the Medicare hospice benefit means improving the quality of care and reducing costs.


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