The final rule is out, and changes are coming. I can imagine this is no surprise to hospice executives as this is all stuff you’ve seen before. Either way, we wanted to give you a quick heads up as to what’s changing and how it will impact your hospice at a high level.

You can jump to a section here:

What is Changing?

The hospice reimbursement rates are changing effective October 1, 2020 (CMS Fiscal Year Start). 

Here are the changes:

  • -2.7% for Routine Home Care

  • +2.7% for Continuous Home Care

  • +2.7% for Inpatient Respite Care

  • +2.7% for Inpatient Hospice Care

What does this all mean?

Sure, from the outset, it looks to be a good change. Increases in reimbursement for 3 of the 4 levels of hospice care. But hospice executives know better than anyone that the total hospice care days are heavily weighted towards Routine Home Care, the only care type reimbursement being reduced. 

How Will This Impact My Hospice?

From breezing over the numbers, you could think that this is good news right? 

(Continuous Home Care Change) + (Inpatient Respite Change) + (Inpatient Hospice Change) + (Routine Home Care Change)  = Total Change

2.7% + 2.7% + 2.7% - 2.7% = +5.4%

That’s a 5.4% increase in my total reimbursement rate!

Unfortunately, you’d be wrong to make that conclusion. Primarily because we need to weigh the impact of each change

Average PPD per Care Type

  • Continuous Home Care (0.2%)

  • Inpatient Respite Care (0.5%)

  • Inpatient Hospice Care (1.7%)

  • Routine Home Care (97.6%)

(Continuous Home Care Change * Avg PPD) + (Inpatient Respite Change * Avg PPD) + (Inpatient Hospice Change * Avg PPD) + (Routine Home Care Change * Avg PPD) = Weighted Average Change in Reimbursement 

(2.7%)(0.2%) + (2.7%)(0.5%) + (2.7%)(1.7%) + (97.6%)(-2.7) = -2.57% 

This means, you can (probably) expect a 2.57% decrease to your total reimbursement starting in October of 2020. 

Please note, we used estimates and assumptions to arrive at these numbers. Every hospice is different and your mileage may vary.

Well, we ran the numbers. And if our estimates are correct, hospice providers stand to lose $4.75 in reimbursements per patient per month. 

Now, this is based on a lot of assumptions and will be different for every hospice. But if you’d like to see our numbers, you can download our spreadsheet here.

What Can I Do About It?

Running a hospice is a lot like surfing in the ocean. The weather is constantly changing and there isn’t much you can do about it. But if we have learned anything in our years of working with hospice executives, it’s that they do not back down from a challenge.

So we did some digging and some brainstorming and came up with 5 things you can do to offset the reductions in your reimbursements next year.

1. Grow Revenue

  • Double-down on improving relationships with nursing facilities & hospitals.  Make their life easier by assisting with related paperwork, proving your hospice is better than their alternatives, truly care about excellent service, and equally important – develop a method for showing you truly care about excellence.

  • Leverage your staff to become community Ambassadors.  Everyone at your hospice represents your hospice, and should consider themselves as marketers.  Focus on staff development by training and celebrating effective marketing.

2. Take an evidence-based approach to patient care – grow your expertise.  Stand-out.

3. Find out how your patients and their families feel about your service, in real time.

4. Lower your costs

  • Utilization management

  • Strategic purchasing

  • Ask your vendors for help – Leverage the knowledge of your vendors.  Because they are often a sounding board for many other hospices, ask your strategic vendors what they recommend to help drive-down your costs while improving patient care?

5. You cannot grow your hospice without your personal growth.  Explore new approaches – innovate. Participate in Think-Tank opportunities, collaborate with other experts in the hospice field.

Seth Lewandowski

Executive Director at SONO