U.S. Medicare proposes cuts to hospice wages

The U.S. Medicare insurance program for the elderly on Monday proposed cutting reimbursement for hospice facility wages, which would hurt big chains Odyssey Healthcare and Chemed Corp.

The Centers for Medicare and Medicaid Services (CMS) proposed eliminating a wage adjustment for hospices that it says is outdated. The proposal would eliminate an automatic adjustment to government reimbursement for wages by 25 percent in fiscal year 2009 and another 50 percent in 2010, the government said.

f implemented, the proposal would save the government $2.29 billion over five years.

Hospice care is growing and seen as a more humane way for the terminally ill to spend the last few months of life. Hospice is also cheaper for payers compared to hospitals.

Still, the Bush Administration proposed cuts earlier this year and the proposal follows through on that bid. The industry will now lobby to trim the proposal.

The number of hospice facilities approved by Medicare, the health plan for 44 million elderly and disabled, has grown rapidly in the past 15 years, up 26 percent between 2001 and 2005, the government said.

Medicare hospice spending grew to $9.2 billion in 2006 and is expected to grow at a rate of 9 percent per year through 2015. That pace outpaces the growth rate for hospitals, nursing homes and other health care services, CMS said.