Hospices Learn to Operate in Value-Based Payment Environment

Hospices will soon have the opportunity to participate in value-based payment models such as Medicare Advantage and Primary Care First. To be successful in such an environment, providers need to strengthen their skill sets when it comes to early patient identification, population stratification, among other competencies.

Medicare Advantage plans are offered by private insurance companies approved by the U.S. Centers for Medicare & Medicaid Services (CMS), and include HMO, PPO, and fee-for-service plans among other options. The program represents an integrated care model that promotes coordination of services and provides incentives for quality and patient satisfaction. Beginning in 2020, the program will be available in all 50 states as well as U.S. territories.

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.


CMS in April announced that they would implement the Primary Cares Initiative in phases beginning in Jan. 2020, initially in 26 regions throughout the United States. The initiative includes several payment models including one specific to Seriously Ill Populations. Hospices and palliative care organizations are eligible to participate in the payment models provided they meet the program’s criteria. Implementation of the program was later delayed to 2021.

With these programs set to begin in 2021, hospices can use 2020 to ready themselves by adapting their processes and boosting their skills in key areas.

“The first is being able to conduct a needs assessment to find out who in your area might be a good partner to secure a value-based payment, and who has the aligned incentives. You have to find out what’s important to them so that you’re meeting their needs and addressing their pain points,” Allison Silvers, vice president of payment and policy for the Center to Advance Palliative Care, told Hospice News. “The second is a capability of being able to collect data on your program performance and tell the story of the benefits you bring.”


Some of the data that hospices can benefit from collection include utilization data, particularly emergency department visits and hospitalizations among their patient population, as well as data on the patient and family experience, according to Silvers.

An important first step is to locate the patients who need your organization’s services.

“You have to be able to identify the high-risk patient population who are going to end up in the hospital or in the emergency department unnecessarily if you don’t intervene, and because you didn’t get involved soon enough to prevent the crisis,” Diane Meier, M.D., executive director of CAPC told Hospice News. “Patient identification is going to have to go beyond electronic health records and claims data and go into communities, because some people don’t access the health care system. That’s either they can’t or because they don’t trust us. So you need some kind of community capacity to know who lives here and who might need care.”

In this endeavor, providers can benefit from engaging with community health workers, also sometimes called care navigators. These are non-clinicians who are a part of the local community and culture, Meier explained. They are trusted members of the community, often retired teachers or nonclinical health care organization employees.

Also to function within a value-based environment, providers will have to perform solid financial analysis to develop a clear picture of their costs and capabilities, with a mind towards maximizing efficiency, according to Silvers. This includes stratifying interventions so that the patients with fewer needs do not receive the same or more visits than patients who have greater needs, for example.

“The more you can improve your operating efficiency the more of an impact it has on your costs and your capacity. The most important is being able to match your services to patient needs,” Silvers said. “If you’re trying to demonstrate value under value-based payments, you really have to be working with the patients and families on whom you can have an impact, and that should be based on what the patient needs or doesn’t need. There’s also competency in using telehealth, when to use it, how to use it, and when not to use it. Those are important capabilities that home-based palliative care providers really need to have.”

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