Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

End-of-Life Medicare Spending 25% Higher for Younger Seniors

A study found that Medicare spending for end-of-life services was 25 percent more for younger beneficiaries, indicating that providers focus on treating younger seniors.

By Jacqueline LaPointe

- For most providers, it is not surprising that Medicare spending tends to increase in the last year of a beneficiary’s life, especially since this population is more likely to experience a serious illness and multiple chronic conditions.

Medicare spending is higher among younger senior beneficaries

However, a recent study from the Kaiser Family Foundation found that in 2014, end-of-life Medicare spending for beneficiaries 65 years or younger was 25 percent more than the average per capita spending among patients aged 65 or older, indicating providers concentrate their care efforts more on younger patients.

“These results suggest that providers, patients, and their families may be inclined to be more aggressive in treating younger seniors compared to older seniors, perhaps because there is a greater expectation for positive outcomes among those with a longer life expectancy, even those who are seriously ill,” explained the report.

The study showed that beneficiaries who died in 2014 and were 65 years or younger were more likely to receive inpatient hospital services, contributing to higher Medicare spending rates. Medicare spent an average of $24,515 on inpatient services for younger beneficiaries, while it only spent $16,701 for older beneficiaries.

Physicians also performed more outpatient hospital services on younger beneficiaries who died in 2014 than on older decedents ($3,835 in Medicare spending versus $2,375). Younger decedents were also prescribed more Part B and D drugs ($3,358 in Medicare spending versus $1,735).

In contrast, Medicare spending on decedents age 65 or older in 2014 was primarily concentrated on post-acute and hospice care. For example, average Medicare spending on hospice care was $3,538 for decedents age 65 older, whereas it was only $1,829 for those 65 years or younger.

Physicians may perform more inpatient and outpatient hospital services as well as provide more prescription drugs for younger seniors because they are more likely to experience positive outcomes from the services, explained the study.

Researchers also found that Medicare spending was highest for beneficiaries in their early 70s, but it declined with each year of age afterwards. Among those who were not experiencing end-of-life care, Medicare spending rates steadily increased with each year of age.

The study explained that the decline in Medicare spending was due to lower inpatient spending as beneficiaries aged. For decedents in their late sixties and seventies, Medicare spent more than $20,000 per beneficiary on inpatient hospital services, while it spent $10,000 or less on decedents older than 90 years.

However, hospice and post-acute care increased with age among decedents, starting at 66 years old.

Additionally, the study discovered that overall Medicare spending on end-of-life services has decreased since 2000. In 2014, the share of total traditional Medicare spending on beneficiaries who died was 13.5 percent, representing a 5.1 percent decline in end-of-life spending since 2000.

The study attributed the reduction in end-of-life Medicare spending to the addition of the baby boomer generation to Medicare in the last couple of years. Researchers stated that this has led to “younger, healthier beneficiaries.”

Recent healthcare innovations have also caused longer life expectancies for individuals, causing the portion of Medicare beneficiaries dying each year to drop from 4.9 percent in 2000 to four percent in 2014.

Providers may be shifting their attentions to younger beneficiaries because of the group’s longer life expectancies and overall better health, explained the study. This group is more likely to have more positive outcomes than older beneficiaries.

Recently, CMS has worked to redesign how providers are reimbursed for performing end-of-life services, such as counseling sessions.

Since January, providers are reimbursed for engaging in advance care planning discussions with beneficiaries that are or are soon to be facing end-of-life services. Medicare pays $86 per claim for performing half an hour of end-of-life counseling sessions, although the policy does not establish what topics need to be covered during the discussion.

CMS designed the policy to better support a patient’s needs and dignity when it comes to end-of-life planning as well as decrease healthcare spending associated with a lack of planning, such as unintended hospitalizations and intensive care.

The recent Medicare reimbursement policy change may also transform how providers approach end-of-life care for beneficiaries, concluded the study.

“The recent change in Medicare payment policy to reimburse physicians for conversations about advance care planning with their patients could bring about changes that better align services delivered with patient preferences and that also potentially reduce the costs associated with care at the end of life,” the report explained.

Dig Deeper:

How a Palliative Care Focus Eases Healthcare’s Cost Burden

How Advanced Care Discussions Impact Provider Payment Focus


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