Impact of New Hospice Drug Policies on Expenditures, Utilization, Prescribing Quality, and Access

PROJECT SUMMARY Nearly 1.25 million Americans aged 65 years and older receive hospice services annually, with hospice medications paid for by two Medicare programs: the Medicare Part A Hospice Benefit and the Medicare Part D prescription drug benefit. A 2012 Office of the Inspector General (OIG) audit reported that Medicare paid twice for medications used by some hospice enrollees. In response, the Centers for Medicare and Medicaid Services (CMS) began a series of policy shifts in 2014 to increasingly place the burden of medication payment on hospice agencies’ operating budgets and away from Part D. Under threat of audit and penalties, this put enormous financial pressure on hospices to ensure that all medications that their enrollees are taking are necessary and billed appropriately. The impact of this policy shift on patient and hospice outcomes is largely unclear. To address this clinical and policy gap, we propose a nationwide retrospective interrupted time series analysis using secondary data from CMS. Aim 1 will examine changes in Part D expenditures and drug utilization pre- and post- 2014 hospice policy change, focusing on individual and hospice factors associated with persistent high part D expenditures after the 2014 policy change. Aim 2 will examine patient-level changes in prescribing patterns and quality indicators after 2014 using a combined Part D-Medicare hospice drug database to achieve complete capture of drug utilization from the perspective of Medicare. Because CMS policy results in incomplete reporting of hospice drugs in Medicare hospice claims pre-2014 and post-2018, sensitivity analyses will use proprietary hospice pharmacy dispensing data (2011-2020) from a national hospice provider to examine patient-level medication analyses before and after the policy change from the perspective of hospice providers. Aim 3 will examine geographic trends in hospice enrollment by admitting diagnosis before and after the policy change. Taken together, this will be the first nationwide examination of the impact of Medicare hospice drug policy of which we are aware. This project is in keeping with AHRQ research priorities to improve access and affordability of healthcare by examining approaches to care delivery and financing. Our findings will generate sorely needed outcomes data related to policy impacts for a vulnerable population, and will serve as the basis of feedback to CMS that will help inform policy refinement and design.