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Testimony on Hospice Care and Other End-of-Life Issues by Kathleen A. Buto
Deputy Director, Center for Health Plans & Providers
Health Care Financing Administration
U.S. Department of Health and Human Services

Before the House Government Reform Committee
October 19, 1999

Chairman Burton, Congressman Waxman, distinguished Committee members, thank you for inviting us to discuss the importance of hospice care and other end-of-life issues. The programs we administer provide care to more than 70 million people in the United States . We are committed to ensuring that, at the end of life, they receive appropriate care tailored to their own needs and that they understand their rights and options.

Medicare and most state Medicaid programs cover hospice services for terminally ill beneficiaries. Hospices provide comfort, counseling and relief from pain, rather than curative care. Hospice care brings important extra sensitivity, a focus on patient and family, and a special form of care to the dying. Medical, psychosocial, and spiritual needs are addressed by a specially qualified interdisciplinary team, with an emphasis on keeping the patient at home with family and friends as long as possible.

Medicare’s hospice benefit is designed to give hospices the greatest latitude in meeting patients’ end-of-life care needs. The care provided includes traditional services, such as nursing care and drugs to control pain, as well as social services and homemaker assistance. And, at the discretion of each hospice and patient, it can include complementary treatments such as acupuncture and massage therapy.

Medicare and Medicaid also require hospitals to ask all patients upon admission about advanced directives, such as living wills, which can help ensure that patient preferences regarding end-of-life care are heeded. And we are taking other steps to conduct research on end-of-life and hospice issues, help hospices improve the quality of care they provide, and assist physicians in addressing end-of-life issues.

The Balanced Budget Act of 1997 made important changes to Medicare’s hospice benefit. These changes ensure that patients whose prognosis improves or who choose to resume curative care can leave hospice and return at a later date. They also will provide us with information about how hospices are using payments they receive and a better understanding of which services are most important to hospice patients, and help us ensure that payment levels are appropriate.


Hospice care was added as a benefit under the Medicare program in 1983 and under Medicaid in 1985. The number of beneficiaries electing hospice care and the number of agencies offering services have grown steadily ever since. In 1998, 420,824 Medicare beneficiaries received more than $2 billion in hospice care services from more than two thousands hospice agencies across the country, with an average length of stay of 48 days.

Hospice care is covered under the Medicare Hospital Insurance program and is available to all beneficiaries enrolled in Medicare Part A. To be eligible, their physician and the hospice medical Director must certify that they are terminally ill, with approximately six months or less to live if their illness runs its normal course. The beneficiary must sign a statement indicating that they understand that they are choosing hospice care instead of routine, curative Medicare covered benefits for their terminal illness. Their physician must reaffirm the prognosis at 90 days, 180 days, and every 60 days thereafter.

Beneficiaries can receive hospice services wherever they reside, be it at home, a nursing home, a hospital, or other facility or setting where the patient resides. Once in hospice, they also continue to have Medicare coverage for treatment of other problems not related to their terminal illness from either their own physician, the hospice physician, or their Medicare+Choice plan if they are enrolled in one.

Services that hospice agencies routinely provide include:

  • Physician services (on-call 24 hours a day, 7 days a week);
  • Nursing care (on-call 24 hours a day, 7 days a week);
  • Physical, speech and occupational therapy;
  • Medical social worker services;
  • Medical supplies (such as bandages and catheters);
  • Drugs for symptom control and pain relief;
  • Medical equipment (such as wheelchairs or walkers);
  • Short-term care in the hospital, including both respite care and procedures necessary for pain control and symptom management;
  • Home health aide and homemaker services;
  • Continuous home care of eight hours or more per day during a period of crisis as needed so that the patient can remain in their home;
  • Dietary counseling;
  • Counseling to help the hospice patient and their family with grief and loss; and
  • Any other item or service for which payment may otherwise be paid under Medicare.

Additional services to ease pain and provide comfort may also be provided at the discretion of each hospice and patient. This can include, for example, alternative treatments such as massage therapy and acupuncture. We believe that the hospice is in the best position to determine what care is appropriate to meet the goal of alleviating pain and providing comfort for each individual patient. We understand that hospices do explore and try new and complementary treatment modalities in a continuing effort to improve the care of the dying, and we encourage these efforts.


Education and training are critically important to the hospice program. Beneficiaries and their families need to know that these services exist and how to use them. Physicians need to know when and how to determine whether to recommend hospice care to an individual patient, as well as what criteria to consider when certifying a patient’s eligibility. Therapists and other ancillary providers need to understand the special sensitivities required in treating hospice patients. Hospice volunteers need to know how to provide the assistance and empathy that are the hallmarks of hospice care. And agency surveyors who inspect hospices to ensure compliance with health and safety regulations need to understand the essential differences between hospices and other kinds of health care providers.

For beneficiaries and their families, we have a brochure that describes in plain English how the hospice benefit works, what their rights and obligations are under the benefit, and how to contact national and state hospice organizations. This brochure is available on our www.medicare.gov website. Hospice information and references are also included in the Medicare & You handbook that is mailed to all 39 million Medicare beneficiaries each year.

For physicians, we have worked with the National Hospice Organization as it developed guidelines on how to determine hospice eligibility for patients with an illness other than cancer that can make prognosis more uncertain. We have distributed these guidelines to physicians through our contractors who process hospice claims.

These guidelines are particularly important in addressing concerns about potential misuse of the hospice benefit. These concerns resulted from identification by the HHS Inspector General of isolated but egregious cases in which unscrupulous hospice providers had billed Medicare, for sometimes several years, for services to beneficiaries who were not terminally ill.

Terminal disease prognosis is not an exact science, and many legitimate hospice patients live longer than six months. Therefore, we issued a bulletin for hospice providers in 1995 stressing that it is essential for physicians and hospices to document the clinical factors that lead them to the six-month prognosis. This bulletin also suggested more frequent review of a patient’s condition in cases where the prognosis is less certain. The Inspector General also has issued compliance guidelines to help hospices design programs to avoid improper claims.

We have also provided special training to speech, physical, and occupational therapists, and other caregivers, on how to best provide care and sensitivity when working with hospice patients. And for hospice volunteers, we have worked with experts to provide training on how to help hospice patients with everyday tasks such as shopping, bathing and dressing.

And for state surveyors who inspect hospices for compliance with health and safety regulations, we have conducted special training sessions, as well. For example, one such session in 1997 included a presentation on effective symptom control, quality care for the terminally ill, and quality of life indicators that surveyors need to take into account by Ira Byock, M.D., who is also testifying at today’s hearing.


In addition to the hospice benefit, it is important for beneficiaries to know how advanced directives, such as living wills, proxy appointments, and durable power of attorney, can help ensure that they get the kind of end-of-life care they prefer. Living wills specify individuals’ desired medical decisions in case they are incapacitated and cannot speak for themselves. Proxy appointments and durable power of attorney attestations designate someone else to make medical decisions in case an individual becomes incapacitated.

Individuals have the right to elect or decline to complete an advance directive. However, the Patient Self Determination Act of 1990 mandates that all institutions receiving Medicare and Medicaid funding inform patients of their right to accept or refuse medical treatment through an advance directive. And, the Balanced Budget Act requires that the advance directive be placed in a prominent place within the individual's medical record.

We are taking additional steps to help improve the quality of end-of-life care. For example, we are asking Medicare’s physician-led Peer Review Organizations (PROs) to address end-of-life issues. PROs hold state-level contracts with Medicare across the country to help promote quality care. Under new contracts this year, they can undertake

quality improvement projects focused on pain management in end-of-life care. In such projects, they would try to improve ways of controlling pain, providing comfort to patients, evaluating patient and family perspectives on quality of care, and measuring pain management.

Medicare’s Office of Clinical Standards and Quality also is providing technical assistance to hospice organizations in developing ways to measure the quality of care provided in hospices. These measures will help identify areas where improvement can be made and then monitor that improvement over time.


The Balanced Budget Act of 1997 (BBA) made important changes to Medicare’s hospice benefit. One of these changes helps ensure that patients whose prognosis improves or who choose to resume curative care can leave hospice and return at a later date. Before, if someone was discharged after being in a hospice for more than seven months (210 days) they were banned from ever getting hospice coverage again. A provision included in the BBA allows such patients to be readmitted with full hospice coverage when appropriate. This should end concerns among some providers that discharging patients from hospice care could make them ineligible for the benefit if they need it later.

The BBA also included a requirement that hospices submit data on their costs to the HHS Secretary for each fiscal year beginning after October 1, 1998. This information will help us to better evaluate the adequacy of Medicare hospice reimbursement rates.

Hospice rates were originally set based on costs incurred in a demonstration project that began in 1980. The rates were adjusted several times by Congress and, since fiscal 1993, have been statutorily set at the previous years rates plus an adjustment for inflation. Hospice agencies are paid a set prospective rate based on whether they are providing routine hospice care in the patient’s home, continuous care in the patient’s home, respite care in the hospital, or general care in the hospital. (Medicare has a specific palliative care billing code for hospice and other patients admitted to a hospital for non-curative care.)

We look forward to the more objective assessment of payment rates that hospice cost data can provide. However, in order to allow time for providers to prepare for this new requirement, we have delayed implementation. Hospice agencies must submit cost reports starting in April 2000 for fiscal years beginning on or after April 1, 1999.

Other BBA provisions also helped to strengthen the hospice benefit, for example by:

  • waiving some ancillary staff requirements for rural agencies that can demonstrate that they have been unable to recruit specific personnel;
  • allowing agencies to contract with physicians rather than have them as employees;
  • protecting beneficiaries from liability when hospice claims are denied because the patient was not terminally ill; and
  • protecting agencies from liability when hospice claims are denied because the patient was not terminally ill, as long as the hospice did not and could not reasonably have been expected to know that the beneficiary was ineligible for coverage.

We are committed to ensuring that beneficiaries receive appropriate care at the end of life that is tailored to their own needs and that they understand their rights and options. The BBA has helped to strengthen both the hospice benefit and the advance directive requirements. We look forward to continuing to work with provider and beneficiary advocacy groups to further advance end-of-life care. I thank you for holding this hearing, and I am happy to answer your questions.

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