Evaluating Hospice Certificate of Need (CON) in Florida

For those who know in advance that the end of life is near, decisions about medical care and other kinds of support are personal and sensitive. Central to this discussion is hospice, which is the primary model for end of life care in the United States. Hospice services focus on palliative care, the provision of relief from symptoms, pain, and stress, with the goal of maintaining or improving the quality of life for enrollees. Hospice enrollees generate thousands of dollars in per-patient cost savings compared to individuals near the end of life who do not participate in hospice. Savings are primarily attributable to reductions in emergency care and in-patient hospitalizations among hospice enrollees.

In Florida, the expansion of hospice programs and other health care facilities and services is guided by the “Certificate of Need” (“CON”) process. Since the CON approval requires that providers enroll all eligible individuals seeking care within their assigned service area, hospices in Florida see relatively high utilization rates.

Given the relatively high numbers and levels of care provided in Florida, it would be unsurprising that the state outspends many others in per beneficiary costs. When standardized to remove geographic differences in payment rates for individual services, Florida spends an average of $13,519 per beneficiary, placing it 8th in spending. In general, hospice CON states outspend their non-CON peers, an average of $11,200 per beneficiary to $10,842, or about three percent more per enrollee. 

Those who would rush to judgment and recommend that Florida, like many other states, repeal CON for hospice should consider the likely consequences: first, the demand for health care professionals trained to care for older adults continues to outpace the supply of geriatric specialists; second, the incidence of fraud is likely to increase, and Florida already leads the nation in many types of Medicaid and Medicare fraud; third, the increased competition that will likely result from the repeal of CON is not likely to reduce the costs of hospice care because most hospice services are funded by government programs (e.g., Medicare and Medicaid) that reimburse providers at a fixed per diem rate; and finally, repealing CON for hospice providers is likely to limit access for rural patients. 

Characteristic of states whose hospice programs are regulated through a CON program, Florida has a large number of patients, a small number of providers, and a large patient-to-provider ratio. While much of the country has experienced explosive growth in the number of hospice providers, CON oversight has resulted in a more modest growth rate for Florida. Florida TaxWatch recommends the CON process be retained, and that hospice regulators continue to identify ways that Florida hospice providers can better control hospice costs, improve the quality of hospice care, and direct investments into medically-needy areas.