Hospice costs and medicare reimbursement: an application of break-even analysis.

Abstract

The adequacy of Medicare reimbursement to cover hospice costs is examined using break-even analysis. Since hospice costs are high during the first few days after enrollment, a long period of enrollment is required for per diem reimbursement to cover costs. Under a variety of specifications, the length of stay required for the hospice to break even is greater than the median length of stay.