Obamacare Payment Cuts Force Michigan Hospice House To Shut Down

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A Michigan hospice center is shutting down its care home for sick patients, partly due to Obamacare cuts, the business’s director said Tuesday.

The residential facility for hospice patients in western Michigan is suffering from multiple budget cuts initiated in 2009. Sequestration lopped 2 percent off federal payments, while changes to the Medicare hospice wage index, initiated at the same time as Obamacare, have cut 4.2 percent from payments.

But the Affordable Care Act is the biggest culprit, cutting another 12 percent from payments to hospices over the next decade as part of a “productivity adjustment.”

“We know that under the Affordable Care Act that hospice programs are also going to see cuts to be reimbursement over the next five years,” Husmann said. “When we take that into account when we’ve already started to see $365,000 or more a year in cuts, we’ve realized that we’re not going to be able to make enough money and keep a hospice residence open for business.” 

Husmann said that while the in-patient Hospice House division of the company will close, the significantly more profitable side of the Hospice of Holland, which does home visits for hospice services, is doing well, growing despite smaller cuts. 

But Obamacare’s cuts to hospices, which will hit over the next decade, go to all hospice services across the board — so while the in-patient hospice center will be shut down, even the more profitable side of Husmann’s business will take a hit due to the health care law.

The health care law included Medicare provider reimbursement cuts that expect to save the federal government $700 billion over the next decade, raising fears that fewer medical providers will begin seeing Medicare patients. In some cases, however, small businesses will be the ones to take the hit, triggering consolidation into larger medical complexes.

“You’re going to have fewer hospices, you’re just going to have larger hospices,” Husmann said. “That’s the trend that’s going on right now, there are hospices in the state of Michigan that are either closing their doors or merging with larger hospices. That’s a national trend as well.” 

The targeted cuts may be counterproductive, according to Husmann, because hospice services take fewer resources from federal entitlement programs than alternatives at hospitals.

“That’s kind of the sad part about this whole thing — there’s enough studies out there that show that people who at the end of life get into hospice programs actually save Medicare and Medicaid billions of dollars compared to the last few week somebody spends in the [intensive care unite], but yet, under the Affordable Care Act, there are going to be cuts facing the hospice industry,” Husmann concluded.

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