Including hospice in Medicare capitation payments: Would it save money?
Date of Pub
Hospice services received by Medicare risk-based health maintenance organization (HMO) enrollees are paid on a non-capitated
basis, creating financial incentives for HMOs to encourage their terminally ill patients to elect hospice. Using Medicare
administrative records for 1998, we found that hospice enrollment in the last month of life was significantly higher among
HMO enrollees than among beneficiaries in fee-for-service (FFS). However, low mortality rates among HMO enrollees produced
similar population-based rates of hospice use in the HMO and FFS sectors. Simulations showed that including hospice care under
capitation payments in July 1998 would have produced very small savings for Medicare.