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."

Connor heard of hospices in other states having to pay back money, but now she knows her hospice won't hit the caps for a long time, if ever.

Medicare caps the benefits each hospice receives each year. Each hospice is allotted a certain amount per day and per patient, but Medicare only covers patients for 180 days.

Medicare multiplies the cap by the number of patients admitted in a particular year to calculate the hospice's Medicare allowance for the year.

"We have people living longer than six months," Connor said of the hospice that serves about 26 patients a day.

But the hospice also has people who come to the hospice for only a day or two. In 2007, average length of stay was 51 days.

Connor said this is a result of physicians referring patients in "the last days instead of the last months."

Hospice Alliance of Wyoming had an average length of stay of 197 days in 2005.

Connor said she was "shocked" to hear that some Wyoming hospices were having trouble with Medicare's requirements.

"It is something we all agreed we would watch," Connor said. "Always, each month we track and trend these numbers."

Spirit Mountain Hospice in Cody, which serves about 11 to 13 people each day, has not exceeded its cap either, said director Linda Harbron. The same was reported during interviews with officials at larger facilities in Laramie and Cheyenne.

"Looking into the future, it could be a possibility," Harbron said.

With the demographics of Wyoming shifting to an older population, Harbron said the need for hospice care will increase.

A woman in Meeteetse, who is served by Spirit Mountain, has been on the hospice benefit for a year and a half, Harbron said. She has end-stage lung disease and has never improved enough to be removed from the benefit.

"Sometimes they just live longer," Harbron said.

Even so, she said this one woman does not have a huge effect on the hospice's numbers.

Lois Armstrong, president of National Alliance for Hospice Access, said there are two factors that can lead to a cap problem: the percentage of cancer patients a hospice serves and who sends the facility patient referrals.

Cancer patients, the reason the Medicare hospice system was established, tend to live shorter periods of time on hospice than other patients, such as someone with diabetes or heart disease. The more cancer patients a hospice serves, the less likely it is to exceed the cap.

The National Alliance for Hospice Access estimates only 25 percent of hospice patients nationwide are cancer patients.

Connor said about half the patients at Central Wyoming Hospice have a cancer diagnosis, and she receives referrals from several sources.

All Wyoming hospices, whether they have been affected by the cap or not, want every Wyoming resident with a terminal illness to be able to access hospice care.

And they want them to receive the care as early as possible.

Connor said the programs and resources available help patients meet end-of-life goals and teach families how to transition after losing someone. If a person is at the hospice for only four days, then the hospice can't offer much help.

"The most important piece of hospice is about quality at the end of life," Connor said. "Not death."

Harbron said she believes the length-of-stay piece is OK, but the hospice benefit as a whole needs to be looked at by the government.

"The government needs to re-evaluate the cost and demand," Harbron said. "They need to re-evaluate what it costs to provide hospice."

Armstrong said she believes the cap will be addressed, but it's probably going to take two to three years for policymakers to pass legislation. She and others at the National Alliance for Hospice Access want "a time out for future collections on caps" until the government does something.

Larsen said he understands the need to have checks and balances so people don't abuse the hospice system, but the government needs to lengthen the cap or make it diagnosis-specific.

Even though his hospice closed its doors, it still has to pay the money back. Larsen said he has already returned $30,000.

He said he didn't have to file for bankruptcy. He just couldn't continue to pay salaries and administrative costs while paying the money back to the federal government.

He keeps his Wyoming license active in case he is ever able to return to the state.

"It's embarrassing," Larsen said. "We don't want to go out."

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.