Hospice News’ Top 10 Stories of 2022
In 2022, the hospice community laid the groundwork for a transformational 2023. This year saw industry-changing acquisitions, some of the worst labor headwinds to date, the return of sequestration and a sometimes volatile national economy.
During late 2021 and 2022, the U.S. Centers for Medicare & Medicaid Services (CMS) developed new approaches for enforcing hospice regulations that will become effective on Jan. 1., and a national audit for patient eligibility will soon begin.
The industry stepped further into value-based payment during the second year of the hospice component of the value-based insurance design (VBID) model demonstration, or Medicare Advantage hospice carve-in. These trends in value-based care have even influenced the M&A market.
In the meantime, providers have continued to bear pandemic headwinds as workforce pressures crystalized and inflation mounted.
These were some of the key themes in the most-read Hospice News articles of 2022 that centered around the merger and acquisition landscape as well as the regulatory climate. More than half (60%) of this year’s readers were most drawn to M&A topics, while legal, regulatory, payment and operational issues comprised the remaining roughly 40%.
The following are the most-read Hospice News articles of 2022.
One seldom-discussed aspect of this year’s pervasive labor shortage was the number of social workers who had left the field.
Social workers left the health care field at record-high rates during the pandemic, according to data from the Peterson-Kaiser Family Foundation Health System Tracker. Findings reflected that attrition rates exceeded pre-pandemic levels by 35% as of 2021.
Their reasons for leaving mirror those of nurses and other clinicians who recently left the hospice field — burnout, stress, opportunities for higher wages, lack of a career path and retirement.
Though the situation worsened with the pandemic, the problem is not new.
As far back as 2006, social worker departures were more common in hospices (18%) versus any other setting, such as health clinics (9%), a study from the National Association of Social Workers (NASW) and the Center for Health Workforce Studies at the University of Albany found.
Social workers cited a lack of employer engagement as a leading cause of burnout and turnover, sources told Hospice News.
#2 For-Profit or Nonprofit, Hospice Is Not a ‘Hustle’ (Dec. 22)
In this editorial, Hospice News responded to an article by The New Yorker and ProPublica that branded “hospice” as a profiteering “hustle.”
The editorial contends that while the article did highlight real issues, the piece overgeneralized its discussion of unethical and illegal activity, creating the impression that these were industry-wide practices.
The story lacked sufficient context to reflect a clear and accurate picture of the hospice community, according to the Hospice News editorial. Factors deemed suspicious, like live discharges or recertifications, were often presented as clear indicators of fraud, even though they could be matters of medical necessity. Hospice News dug into these and other considerations that were not reflected in the New Yorker/ProPublica story, in this editorial from Editor Jim Parker.
#3–6 Big Provider, Payer Hospice Deals
The hospice M&A market has run hot in recent years, seeing record-high valuations in 2021. Shifts in the economy and in reimbursement led to a cooling period in 2022, particularly in the early part of the year. Rising interest rates dampened investors’ potential returns on their hospice investments, and home health activity once again picked up as the dust settled from the implementation of the Patient-Driven Groupings Model (PDGM).
Despite that initial slump, several large hospice deals took place, including transactions among some of the largest providers and payers in the space.
#4-UnitedHealth Group to Acquire LHC Group for $5.5 Billion (March 29)
UnitedHealth Group (NYSE: UNH) subsidiary Optum purchased LHC Group (NASDAQ: LHCG) for a reported $5.5 billion. The insurance company will integrate LHC Group with its existing home health asset, Optum Health.
The deal was initially expected to close this year, but the Lafayette-Louisiana-based home health and hospice provider recently indicated that Q1 2023 was more likely, according to a U.S. Securities and Exchange Commission (SEC) filing. This delay followed two requests from the Federal Trade Commission seeking more information about the pending deal.
Spring brought the completion of Humana Inc.’s (NYSE: HUM) $2.8 billion divestiture of a 60% stake in Kindred at Home’s hospice and personal care segments to the private equity firm Clayton, Dubilier & Rice. Humana retained 100% of Kindred’s home health assets.
The insurance giant completed its $5.8 billion purchase of Kindred at Home in August 2021. These two Kindred at Home transactions mark Humana’s continued growth plans into value-based care as both a provider and payer. The deals also fall in line with the company’s stated goal to raise its enterprise value by $1 billion.
AccentCare started off this year by unifying all of its business lines under the company’s main brand. The move included six subsidiaries as well as Seasons Hospice & Palliative Care, which AccentCare merged with in Dec. 2020.
The merger with Seasons made AccentCare the fourth largest hospice provider nationwide and further solidified the company’s growth plans towards building a seamless continuum of home-based serious illness care that could support diagnosis through the end of life, according to AccentCare executives.
Addus HomeCare Corporation’s (NASDAQ: ADUS) in January announced its $85 million acquisition of Illinois-based nonprofit hospice provider JourneyCare Inc. The deal closed the next month in February, transitioning JourneyCare to for-profit status.
Among nonprofits, JourneyCare was one of the nation’s largest, having served 750 patients daily in 13 Illinois counties. This marked one of the biggest transactions in which a for-profit provider purchased a nonprofit.
California is among the states that has tightened hospice oversight amid rising cases of fraud. Some providers have faced criminal charges and large fines for their involvement.
One of the largest examples occurred in February, when law enforcement agencies in California arrested 14 people for their involvement in a $4.2 million hospice fraud scheme. The individuals had been associated with two San Bernardino County-based providers — New Hope Hospice, Inc. and Sterling Hospice Care, Inc.
#9- CMS Final Rule Gives Hospice 3.8% Pay Raise for 2023 (July 27)
CMS gave hospices a 3.8% bump in their per diem payments for 2023, according to a final rule published in July. Though the reimbursement hike was larger than the 2.7% the agency initially proposed, many providers and industry groups contended that the rate was too small to offset rising costs.
Several hospice executives said that the modest reimbursement increase was insufficient to keep up with inflation, wage hikes and ongoing pandemic-related expenses, coupled with drops in patient length of stay and clinical capacity.
#10- The Fastest Growing US Hospice Companies (Oct. 10)
Hospice News profiled operators that appeared in Inc. magazine’s annual list of the 5,000 fastest growing companies in the United States.
These included Texas-headquartered Traditions Health, and California providers Bridge Home Health & Hospice and Healthflex Home Health & Hospice. Philadelphia-based All-American Home Care and Innovative Homecare Solutions in Illinois also appeared on the list.
#11 Hospice Brace for Medicare Sequestration, Return Could Be ‘Devastating’ for Smaller Hospice Operators (Feb. 16)
Congress suspended the practice of sequestration in 2021 through the CARES Act to give providers some financial relief during the COVID-19 outbreak. This year saw its return, with hospice and other health care providers once again seeing cuts by 2% across the board. This may seem like a small amount, but can have significant impacts on sustainability, particularly for small community-based hospice providers.
Hospices are taking stock of how sequestration and other pandemic-associated policy changes could impact their businessesas the public health emergency stretches into a fourth year.
BONUS # OIG Planning National Audit for Hospice Eligibility for 2023 (Jan. 19)
The U.S. Department of Health & Human Services Office of the Inspector General (OIG) has planned a nationwide audit of hospice eligibility for next year. The audit will focus on patients who did not have a hospitalization or emergency department visit prior to electing hospice.
When the audit launches, the OIG will contact individual hospices to request Medicare claims and associated documentation. The 2023 eligibility audit comes from the results of previous, less extensive inquiries. The question of eligibility is frequently invoked in False Claims Act cases, regulatory audits and claims denials.