Golden Acres Heads to Federal Court to Take on Kathleen Sebelius and Medicare's "Hospice Cap"

Kathleen Sebelius

​The National Alliance for Hospice Access lays out very clearly what the so-called "hospice cap" is, but long story short: In 1982, Congress enacted a law that allowed Medicare beneficiaries to choose hospice care over hospital care. There was one caveat: Congress put in place a cap on Medicare payments to the hospice, because, to be blunt, back then the thought was patients who chose to go into hospice didn't have long to live. Hence the '83 provision that defined hospice patients as "terminally ill with a likely prognosis of six months or less."

But over the years, Congress loosened up its rules, acknowledging that, well, you couldn't give the living a deadline. But it never lifted the Medicare reimbursement cap. Which is why, in recent years, nursing homes and hospice providers have taken on the feds, who've gotten in the habit of showing up and asking for a Medicare refund -- which the hospices says they don't have because, look, they spent that money on patients. Which brings us to this lawsuit filed yesterday in Dallas federal court: Dallas Nursing Home LLC dba Golden Acres v. Kathleen Sebelius, Secretary of United States Department of Health and Human Services.

The doc follows, but Golden Acres says that in March, "Medicare made a demand for repayment to Golden Acres in the amount of $741,643 based upon its calculations of Golden Acres' cap obligation for the Medicare fiscal year 2008." The hospice provider took the bill to an independent panel in September. Next step: yesterday's federal lawsuit, in which Golden Acres asks the court to rule that "the hospice cap regulation is invalid." The suit follows. Golden Acres v Kathleen Sebelius