Medicare caps are putting some hospice facilities in a bind

CASPER, Wyo. — Hospice Alliance of Wyoming closed in February because its patients took too long to die.

The hospice, which had served Star Valley since the summer of 2003, discharged its last patient in February and closed its doors because the federal government wanted some of its Medicare money back.

Justin Larsen, who owns hospices throughout Utah and Idaho, said he opened Hospice Alliance of Wyoming at the request of Lincoln County officials who were worried about the lack of end-of-life care in western Wyoming.

He closed the facility after a trip to the mailbox.

"We got a cap-demand letter," Larsen said. "It's eventually what caused us to go out of business. Our demand letter was too much for us to pay back."

Hospice Alliance of Wyoming is part of a growing list of hospices that have been forced to pay back money to the federal government. The majority of Wyoming hospices, though, have not been affected, and officials do not think they will ever exceed their caps, including the hospice in Casper.

Since the government changed hospice guidelines in 1998 to include all patients with terminal illnesses, instead of just those with cancer, more hospices are exceeding their caps.

Some 400 hospices in 31 states are expected to receive letters in coming months asking them to repay $300 million in Medicare funds they received for hospice services provided in 2006, according to National Alliance for Hospice Access, a nonprofit coalition of independent hospices.

The letter Larsen received was for services rendered in 2005. The Star Valley hospice was one of 250 hospices that had to pay back money for that year.

The National Alliance estimated about 13 percent of Wyoming hospices would receive these letters for services provided in 2006, which accounts for approximately two of Wyoming's estimated 18 hospices.

Because the figure is based on estimated data from Medicare, David Daucher, secretary and treasurer for the national alliance, said it is tricky to find exactly who will be hit.

It could be only one hospice or it could be three, Daucher said.

While the Star Valley hospice closed, a few others in the state are feeling the pressure of the cap.

The cap has prevented other hospices from entering the state. Larsen said he was planning to open another small hospice in the Lovell area, but now that is impossible.

Central Wyoming Hospice & Transitions currently uses only about one-third of its cap, said Marilyn Connor, executive director of the Casper hospice.

"I really crunched the numbers," Connor said. "It really started making me uncomfortable."