Hospices May Profit From Live Discharges

More hospice patients are being discharged before their death, raising a question about whether hospice companies are financially motivated to do so. One recent study found there is in fact a positive association between higher hospice margins and higher rates of live discharge.

Over the last decade, the “live discharge” rate—the rate at which patients are discharged from hospice before their death—has risen steadily, according to a study published in Health Affairs, “A Positive Association Between Hospice Profit Margin And The Rate At Which Patients Are Discharged Before Death.” However, hospice care under Medicare is intended to be provided for a person who is terminally ill with an expectation of living six months or less.

Discerning Discharge


When it comes to a live discharge, there are likely two underlying causes, according to the report—the discharge could either indicate good care quality, or poor care quality. For example, patients are sometimes discharged because they have actually gotten better; their condition has stabilized and they are now expected to live longer than six months, making them no longer eligible for Medicare hospice benefits.

From 2000 to 2014, the live discharge rate has risen from a median of 13.7% to 18.7%, the study found.

The study looked at a sample of 1,439 freestanding hospices, including for-profit, chain-owned and non-profit operators, and their live discharge rates from 2012 to 2013.


Regardless of the reason for live discharge, the “consistent uptick” in the rate over the years raised eyebrows among regulators, leading the Centers for Medicare & Medicaid Services (CMS) to express concern in a 2015 proposed rule that hospices were determining coverage based on reimbursement and cost rather than patient needs and preferences, the study cited. Overall, these financial motivators could be impacting business decisions.

“This work provides evidence to support the idea that some hospice business practices may be driving the decision to discharge patients before death,” the study reads.

There are several reasons a hospice may discharge a patient that are financially motivated, including the need for inpatient care—that the hospice is unable to provide—or a hospice approaching its aggregate cap, which is a limit on the total payments hospices can receive per patient from Medicare over a 12-month period. Or, a hospice provider may discharge a patient who is only marginally eligible for their services in fear of an audit. Higher acuity, and therefore more costly, patients are also likely at risk of being discharged.

Parsing Patterns

Across the freestanding hospices in the study, higher total and operating profit margins were associated with live discharge rates.

“Results from this study show a positive and significant relationship between higher operating and total margins and higher hospice-level rates of live discharge in 2012 and 2013,” the study concluded.

However, study authors were careful not to conclude that hospices are categorically motivated to discharge patients for a higher profit or as an indicator of care quality.

“By itself, the association between margins and live discharge rates does not provide enough evidence for CMS to adopt live discharge rates as a quality indicator,” study authors wrote.

Indeed, hospice services may be acting “as a back-door long-term care benefit,” the study concludes. And, while there were some discernible patterns for which types of hospices were most likely to have higher live discharge rates, there may be a simpler answer: the science of dying may not be an exact one.

In others words, there are several reasons why patients may be discharged, and the industry needs more research in this area to figure out how to best serve patients and provide appropriate care.

“Our results should serve as a clarion call for broader benefit and payment reform,” the study reads.

Written by Amy Baxter

Companies featured in this article: