Hospice Leaders Question Value of Medicare Advantage Hospice Carve-In

Leaders from hospice organizations raised concerns about the forthcoming demonstration of a Medicare Advantage carve-in for hospice. The hospice executives spoke at the National Home Care & Hospice Association’s (NAHC) Financial Management Conference in Chicago.

The U.S. Centers for Medicare & Medicaid Services (CMS) earlier this year announced that it would test coverage of hospice care through Medicare Advantage plans beginning in 2021. 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.

“We have asked CMS, ‘What is the problem you are trying to solve, and what are the improvements that you are trying to make?’ And we get mixed answers,” NAHC President William Dombi said. “We suspect the problem includes patients not getting into hospice at the right time. Too many patients come into hospice in the last days of life. And maybe too many people come in for too long a period of time. Determining a prognosis is very difficult, but will putting this in Medicare Advantage solve that? No it won’t.”


Dombi said that NAHC’s position on the carve-in is one of “unqualified opposition,” but he said the industry advocacy group would work with CMS to identify problem areas within the current benefit and seek improvements.  

Medicare Advantage plans are offered by private insurance companies approved by CMS, and include HMO, PPO, and fee-for-service plans among other options. The program represents an integrated care model that is designed to promote coordination of services and provides incentives for quality and patient satisfaction.

Some stakeholders have said that the experience of home health agencies under Medicare Advantage plans dampens their optimism regarding a hospice carve-in, citing burdensome prior authorization processes and the tendency among plans to negotiate for the lowest possible payment amounts.


“We have already seen this movie. We don’t like the plot. We don’t like the ending,” Bruce Greenstein, executive vice president and chief strategy officer for home health and hospice giant LHC Group (NASDAQ: LHCG), said during a Leadership Panel at the conference. “Medicare Advantage has not been nirvana. It has not been enlightenment. It’s intellectually inconsistent to have health plans that are responsible for the promotion of health and managing care to have better outcomes to then be in the business of managing the end of life. The opportunity to game the system is too prevalent. I am not comfortable with it at all.” 

CMS has released few details as to how the program will work, making it difficult for hospices to ready themselves. Some have speculated that a possible outcome is a transition to reimbursement based on patient visits rather than a per diem payment, similar to how home health care is reimbursed under Medicare Advantage. Some in the field suggest that hospices should begin studying how a transition to visit-based reimbursement could affect their financial performance. 

“Hospice is reimbursed on a per diem basis; whereas home care reimbursement is based on visits. If you want to compare the two models you need to look for the common denominator. So what’s the common denominator? It’s the visits,” James Summerfelt, president of the Nebraska Home Care Association, said at the conference. “If you start to think ahead and look at what are we going to have to do with managed Medicare in the hospice world, it’s likely that we could start to see reimbursement on a visit basis — which is a totally different model from what we are accustomed to. So we need to start now, start thinking about a time where we are reimbursed in a way that is similar to what is done with home care.” 

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