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Since its creation in 1983, the Medicare hospice benefit has been “carved out” of Medicare’s managed care program, commonly known as Medicare Advantage. When a Medicare Advantage enrollee elects hospice, payments for both hospice and other services unrelated to the individual’s terminal condition revert to fee-for-service Medicare, and health plans remain liable only for the Part D or supplemental benefits they provide. Although the initial rationale for this approach is unclear, the policy has come to define end-of-life care for a substantial portion of Medicare beneficiaries. Approximately 417 000 Medicare Advantage enrollees died in 2011 (24% of Medicare deaths), almost half of whom used hospice (D.G.S., analysis of 2011 Medicare hospice claims and Master Beneficiary Summary File, unpublished data, 2014). Consistent with broader efforts to integrate health care services across the continuum, the Medicare Payment Advisory Commission (MedPAC) recently recommended ending the hospice carve-out.1
Stevenson DG, Huskamp HA. Integrating Care at the End of LifeShould Medicare Advantage Include Hospice?. JAMA. 2014;311(15):1493-1494. doi:10.1001/jama.2014.1018