Beneficiaries of Medicare Advantage special needs plans are significantly more likely to use lower-quality hospices than beneficiaries of other Medicare plans. These disparities may result from the geographic availability of high-quality hospices or the referrals that beneficiaries receive from their plans’ contracted hospitals and nursing homes. The results support incentivizing referrals to high-quality hospices and improving consumer information about hospice quality.

Research Question

Does hospice quality differ under Medicare Advantage and fee-for-service Medicare?

The Medicare Advantage payment structure encourages plans to control costs for most care, through per-beneficiary reimbursements—but hospice services are an exception. Traditional, fee-for-service Medicare covers hospice costs for Medicare Advantage beneficiaries, incentivizing those plans to encourage hospice referral. 

Previous studies indicate that Medicare Advantage beneficiaries do indeed receive hospice care more often than fee-for-service enrollees. Another study of families of people who died while enrolled in Medicare Advantage suggested poorer end-of-life care, including hospice.

Medicare Advantage special needs plans cover people with chronic conditions such as dementia, diabetes, or HIV/AIDS, patients who need long-term institutional-level care, and individuals dually eligible for Medicare and Medicaid. Racial, ethnic, and socioeconomic groups that are overrepresented in special needs plans also tend to experience poorer end-of-life care.

Given the increasing numbers of people covered by Medicare Advantage special needs plans, LDI Senior Fellow Norma Coe, lead author Lindsay White, and colleagues examined associations between Medicare Advantage enrollment and hospice care quality. 

The Findings

Confirming previous studies, Medicare Advantage beneficiaries were more likely to use hospice in the last 6 months of life than people with fee-for-service plans. Hospice program quality did not substantially differ between people with regular Medicare Advantage and fee-for-service plans.

However, Medicare Advantage special needs plan beneficiaries were significantly more likely to use lower-quality hospices, based on multiple measures of hospice care quality, compared to fee-for-service Medicare enrollees. Beneficiaries of Medicare-Medicaid plans, which serve those dually eligible for both programs, were even more likely to use lower-quality hospices (Figure 1). Special needs plan beneficiaries were less likely to be of non-Hispanic white race and ethnicity, and more likely to also use Medicaid, than other Medicare recipients.

These differences in quality might stem from Medicare Advantage plans contracting with lower-cost hospitals or nursing homes that then refer patients to their preferred, potentially lower-quality hospices. Supporting this explanation, controlling for referring facility reduced differences in hospice quality for special needs plan beneficiaries. Another explanation is that high-quality hospice programs are less accessible for patients who do not live near them.

The Implications

Nearly half of Medicare beneficiaries are in hospice when they die. Enrollment in special needs plans more than doubled since 2019, to more than 6.6 million, with 88% in plans for people dually eligible for Medicare and Medicaid. The study’s findings suggest that disparities in hospice quality perpetuate and exacerbate existing inequities for special needs plan beneficiaries.

The researchers note that Medicare Advantage quality ratings do not include end-of-life care metrics. Including these metrics in Medicare Advantage quality ratings would emphasize the importance of end-of-life care and incentivize eliminating disparities in high-quality hospice access. Quality ratings are reported at the level of insurance contracts and may include a mix of high- and low-quality plans. Reporting at the plan level would encourage all Medicare Advantage plans to improve care quality, including special needs plans.

Consumers need better information on hospice quality. The Medicare Care Compare site helps consumers choose hospitals, nursing homes, and other services. The hospice section needs more details about quality star ratings, accreditations, complaints, and inspections. When choosing a hospice program, Medicare beneficiaries should have full information for making their decision.

The Study

The cross-sectional study analyzed Centers for Medicare & Medicaid Services claims and enrollment data, from January 2018 through December 2019, and hospice quality data, from November 2020 through August 2022. The hospice use sample was more than 4.2 million Medicare beneficiaries who died in 2018 or 2019; the quality sample was more than 2.2 million beneficiaries in hospice during that period. The quality assessment used nine measures from hospice reports, claims, and consumer surveys, although some hospices did not have a rating for one or more measures. To ensure comparisons were among people with access to the same hospices, adjusted analyses included beneficiaries’ ZIP code and hospital or nursing home, if applicable.

---

Source Publication: White, L., Sun, C., Coe N. B. (2024). Quality of Hospices Used by Medicare Advantage and Traditional Fee-for-Service Beneficiaries. JAMA Network Open 7(12):e2451227.

---