Questions Abound on Medicare Advantage Hospice Carve-In

Hospice providers have many questions and few answers related to the U.S. Centers for Medicare & Medicaid Services (CMS) demonstration of a hospice carve-in for Medicare Advantage plans.

CMS earlier this year announced that it would test coverage of the hospice benefit through Medicare Advantage plans beginning in 2021. Through Medicare Advantage, CMS contracts with and pays private insurance companies to cover beneficiaries. Currently hospice patients are covered under traditional Medicare fee-for-service. When a patient on a Medicare Advantage plan enters hospice, their coverage reverts to traditional Medicare. The carve-in, according to CMS, is intended to increase access to hospice services and facilitate better coordination between patients’ hospice providers and their other clinicians. Reactions to the carve-in demo have been mixed, with many lauding the CMS action and others expressing concern.

Everyone, however, has questions. CMS has given few details about how the demonstration will work, how payments might be affected, how coverage might change, and other critical issues. Without further details, hospice providers have no measuring stick to gauge whether such an approach would be effective or how it might affect their revenue streams.


“This is the biggest thing that could happen to hospice since the inception of the [Medicare] benefit in 1983. But given the lack of detail as to how this will unfold, it’s hard to say what the impact will be.” said William Dombi, president of the National Association for Home Care and Hospice. “We think the hospice benefit has proven itself to be incredibly well-run, well-designed program that will not benefit from being integrated into Medicare Advantage. This is perhaps a solution looking for a problem.”

Hospice providers, even those in favor of the carve-in, wonder whether Medicare Advantage plans will reimburse at a rate comparable to the per diem payments they currently receive. They don’t know if advantage plans will cover the same range of services as the present hospice benefit, and some worry that moving to a new payment model will adversely impact patient access to hospice care.

“There is a lot of angst from the hospice providers about how this will change what they do,” Allyson Schwatz, former Democratic congresswoman for Pennsylvania and current president and CEO of the Better Medicare Alliance said in a podcast. “They feel strongly about the work that they do and the patients and caregivers and loved ones.”


One of the chief concerns is anxiety over potential administrative burdens, such as paperwork, data collection, submitting claims, and regulatory compliance. Hospice providers working with Medicare Advantage plans will likely be working with a number of insurance companies, each with their own processes and requirements, rather than a single intermediary in the fee-for-service model. These processes are often costly in terms of labor and time, and time is one thing that hospices often lack.

“The level of administrative burden is something that we have to get right or else some people are not going to get hospice at all” said Edo Banach, president of the National Hospice and Palliative Care Organization. “If the [administrative processes] take a couple of days it may be too late. In hospice, there isn’t a second chance.”

CMS also requires Medicare Advantage plans to collect and submit data—on utilization, quality, patient encounters and more. The insurance companies must collect this data from the hospice providers, possibly adding further administrative burdens. Organizations from all health care settings have been calling for organizations have been calling for more consistent and standardized approaches to meeting administrative requirements.

“All providers we work with talk about the administrative burden. There are different rules and regulations for every type of payer and program,” Schwartz said. “Everyone says they are going to fix it, but it doesn’t get fixed. There is a lot of interest in reducing administrative burden and streamlining these processes.”

Smaller hospice companies have their own set of worries: Will insurance companies participating in Medicare Advantage want to contract with numerous small agencies, or will they prefer to deal with one large provider with multiple locations covering a sizable geographic area? They fear that a shift away from the fee-for-service benefit could leave them out in the cold.

“With traditional Medicare smaller agencies can compete because the patient has their choice of providers. Medicare Advantage programs, like most insurance companies, want to have a smaller network,” said Denis Viscek, CFO of the Marin, Calif.-based nonprofit Hospice of the Bay. “For efficiency’s sake they want to contract with a regional provider and in some cases prefer a national provider. This is a particular concern for nonprofits because they tend to be standalone rather than part of a chain.”

Whatever form a Medicare Advantage carve-in takes, the ultimate question on hospice leaders’ minds is this: Will they be ready?

“Are we going to be ready?” posited Banach. “When we get more information and figure out what the rules are, we have to ask whether 2021 is even reasonable. We don’t know that yet because we don’t have any information with which to judge that, and we are getting close [to 2021].”

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