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New York Governor Vetoes Bill to Limit For-Profit Hospices

New York Gov. Kathy Hochul (D) has vetoed legislation that would have effectively banned new, for-profit hospices in the state.

The New York State Assembly passed the bill in June and submitted it to the governor’s office in mid-December. It would have prohibited the establishment of for-profit hospices in New York state and forbid current for-profit operators from increasing capacity. 

“Data suggest that hospice care is underutilized in New York compared to other states, straining other elements of the health care system,” Hochul wrote in her veto. “There are currently only two for-profit hospices operating in the state, both of which are under the supervision of the Department of Health, which has not found issues with fraud or quality of care at either.”

The Hospice and Palliative Care Association of New York State tweeted a photograph of the veto document.

In lieu of the bill, Hochul is asking the committee charged with developing New York state’s forthcoming “Master Plan on Aging” to consider the future of for-profit hospices in New York. 

New York’s hospice utilization rate was the lowest in the nation in 2020 at 24% among Medicare decedents, the National Hospice & Palliative Care Organization (NHPCO) reported. Utah had the highest rate at 60.7%

Contributing to the low rate is the size of the state’s population. Generally, more patients receive hospice in New York than in Utah, but they represent a smaller percentage of the total number of Medicare decedents.

In 2021, for instance, 48,644 Medicare beneficiaries in New York state elected the hospice benefit, compared to 14,944 in Utah, according to the U.S. Centers for Medicare & Medicaid Services (CMS). But even taking population into account, utilization in New York remains considerably lower than in other states with large concentrations of seniors like California and Florida. 

Stakeholders in the hospice space have voiced concerns about potential fraud and other abuses associated with the proliferation of new hospices, but so far the focus has been on California, Texas, Arizona and Nevada.

Lax oversight has contributed to high concentrations of hospice fraud in California, the state’s Department of Justice indicated last year. Lawmakers have passed a number of laws to combat the problem, including a moratorium on new licenses.

In November, hospice industry organizations called on CMS to examine the issue nationally. Signatories on the joint letter included LeadingAge, the National Association for Home Care & Hospice (NAHC), the National Hospice and Palliative Care Organization (NHPCO) and the National Partnership for Healthcare and Hospice Innovation (NPHI).

“We believe that, in addition to action at the state level, increased federal oversight is needed to protect hospice patients and their families, as well as the vast majority of hospice providers that properly observe Medicare and Medicaid laws and regulations,” the groups wrote in the letter. “When similar activities were occurring in the home health program, CMS took decisive action to maintain the integrity of the benefit through imposition of temporary moratoria on the admission of new agencies in select areas of the country.”

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