Insight

Hospice care services M&A

U.S. hospice care services overview

Walter Olshanski

Walter Olshanski

Managing Director, KPMG Corporate Finance LLC

+1 646-874-4878

The growing aging population across the U.S. coupled with reimbursement from Medicare and Medicaid and general shift towards at-home end-of-life care, has impelled the hospice care services market in the U.S.

  • Hospice care refers to specialized interdisciplinary care for those with limited life expectancies.
  • With approximately 1.5 million Americans receiving hospice care every year, the demand for high-quality end-of-life care is projected to rise in years to come.
  • From Q1 2018 to Q1 2019, hospice average length of stay climbed from 74.5 to 77.9 days, representing the growing acceptance of hospice care services.
  • Expanding population pool of aged people, coupled with increasing caseload of chronic life limiting diseases, favorable payor environment, and lower cost of care serve as catalysts for sustainable growth of hospice care industry.
  • Hospice space is continuously evolving and providers are gearing up for more changes, including movement towards value-based payment models and reimbursement cuts.
  • A Medicare Advantage hospice carve-in program has been designed to control costs, reduce avoidable hospitalizations, increase access, and improve care coordination.
  • Center for Medicare & Medicaid Services (CMS) also rebased hospice payment rates for FY 2020, cutting the payment for routine home care and increasing the per diem for continuous home care, general inpatient care and inpatient respite care.
  • Amidst the COVID-19 situation, CMS has released new waivers that pertain to physical environment and Life Safety Code rules for inpatient hospices.
  • Hospice providers can now provide services to a Medicare patient receiving routine home care through telehealth technology during the current environment.
  • CMS has also delayed the filing deadline of certain cost report due dates due to the Covid-19 outbreak.

Medicare certified hospices in the U.S.(1)

9.6% increase since 2014

Medicare spending on hospice care(1)

Hospice admissions by quarter(2)

(Numbers in thousands)

Service segmentation(3)

$28.5 billion 2019 revenue

Demographic profile of Medicare beneficiaries receiving hospice care (2017)(1)

Medicare reimbursement base rates for hospices(4)

  FY 2018 FY 2019 FY 2020
Routine home care (1-60 days) $193.03 $196.50 $194.75
Routine home care (61+ days) $151.61 $154.41 $153.92
Continuous home care full rate (hourly rate) $40.70 $41.57 $58.17
Continuous home care full rate (payment rate) $976.80 $999.77 $1,396.17
Inpatient respite care $181.87 $185.27 $473.79
General inpatient care $743.55 $758.07 $1,021.25


Additionally, the FY 2019 cap was $29,205.44, while the FY 2020 cap ending on Sep 30, 2020 is $29,964.78.
 

Hospice care services M&A
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Footnotes

  1. NHPCO Facts and Figures 2018 EDITION (REVISION 7-2-2019)
  2. Trella Health – Industry Trend Report 2019
  3. IBISWorld Industry Report - Hospices & Palliative Care Centers in the US (April 2019)
  4. The Centers for Medicare & Medicaid Services


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