Hospice by the Bay CFO: Palliative Care Growth in Time Will Outstrip Hospice

For the better part of a decade Denis Viscek has served as chief financial officer of Hospice by the Bay. The San Francisco-area hospice provider was one of the first hospices to be established in California and is one of the top 100 largest hospices in the nation in terms of market share, according to LexisNexis.

Viscek spoke with Hospice News about the growth of palliative care in the United States, positioning hospice to operate in the Medicare Advantage marketplace and the impact of the recent California wildfires.

What do you see as your top business priorities for 2020?

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Like a lot of hospices we are working on building a robust palliative care program. Not everyone is ready for hospice, and lots of folks still want to pursue palliative care while receiving curative treatment. There’s a whole large segment of the population that’s not being served. 

I actually think over time the palliative care industry is going to far surpass the hospice industry in size. That’s my personal belief. That may take 10 or 20 years, but I really believe that is the new way.

There are a lot of people who do not meet the six-month criteria but are very frail or homebound, and many of them now fall through the cracks in the system or end up in a skilled facility where they don’t really want to be, and it drives up costs. We have really got to come up with a way for managing and helping this segment of the population, and I believe palliative care is the way to do it.

Hospice is taking steps toward value-based payment models. How should organizations prepare?

We are making sure that we are positioned right in the marketplace, with the possibilities of the Medicare Advantage hospice carve-in. I think that’s going to be really crucial.

You have got to be in a position to compete. You’ve got to be attractive to large networks. In other words, serve a sufficiently large geographic area, offer different lines of business. A lot of these networks like to do one-stop shopping for care in the home setting palliative care, hospice, home health care, provide all of those services. 

There is a real need with Medicare Advantage programs to make sure you are running an efficient operation with good quality, because they are going to be looking at quality scores, probably more than the average consumer.

Why is efficiency so important in that payment environment?

When I talk about efficiency with our board and other members of senior management, the way I’ve explained is that we are used to getting an increase automatically from [the U.S. Centers for Medicare & Medicaid Services (CMS)]. It may not be a large increase, but we typically get an increase.

You could go years without a Medicare Advantage program increasing your reimbursement. In fact, it’s possible that initially they want to contract for less than what the [Medicare Hospice Benefit] pays, and if you’re not running an efficient operation, then being economically viable could be a real challenge.

Is it necessary to start building relationships with payers to support future work in a value-based environment as well as growing your current palliative care services? 

We are trying to get to know payers, particularly programs that have Medicare Advantage plans in other markets, Medicare Advantage is not really big in the Bay area. I have always found that unusual, but I think it’s going to become more prevalent out here. 

It’s going to be important to know those folks that run very competitive and very successful Medicare Advantage plans in other markets. Because if you’re not part of a large network, you’re going to be in trouble. it’s just plain access to patients, as the traditional Medicare population shrinks. Because with Medicare Advantage program is not necessarily about patient choice, it’s about being in the right network.

Since we last spoke, CMS has put forth the Primary Care First and Seriously Ill Population payment models. What is your perspective on those?

We’ve certainly been approached by some payers out here to have some very preliminary discussions about developing these kinds of programs.

I do think that everyone seems to be kind of waiting around and kicking the dirt waiting for CMS to really embrace palliative care. Their consultative model that you can operate right now is such a money loser. It is just not economically feasible, and I think people are waiting for CMS to get serious about it.

Are there things that that hospices that providers can do to help make their community based palliative care services economically sustainable, if not profitable in the absence of a dedicated Medicare benefit?

I think we are doing that. We run a pediatric palliative care program here. For years, it was done through the state’s Medi-Cal program. California is among a group of states that offer a waiver to allow children to both be on hospice service and receive curative care at the same time.

We have a pretty substantial pediatric palliative care program. It’s split now amongst four or five different payers, and they all do it differently, which makes it hard to administer. Of course, we took the patients on. We weren’t going to abandon people. 

We needed to collect enough data to go back to the payers and say that this is really what drives the cost of this program. It’s not so much the visits that drive the cost of the program; it’s more the care coordination. We had to demonstrate that to them. We have to collect the data and show them that the clinician’s time is spent not visiting this patient, but coordinating the care around this patient. 

Initially this was somewhat contentious with the payers, who felt that this was just kind of thrust upon them by the state with no additional payment to administer this program. We understood that, but also couldn’t lose our shirts doing this. We are committed to it. It’s in our mission. 

Over a period of months, they’ve been more open as we’re starting to generate information. We had to completely rebuild our electronic medical record system to collect the necessary data, and then we could start showing them where the money was really spent. We’re hoping within the next month or two to start getting into some serious negotiations about the program going forward.

Payers are ultimately want to see outcomes. They want to see that data. They don’t want to just take your word for it, and that’s legitimate.

How did the recent wildfires in your area affect your operations?

We have an office in Sonoma, and a number of those patients were forced to evacuate. We had some staff that needed to evacuate. Trying to place those evacuated patients became even more difficult as a lot of facilities in the region were without power for a substantial amount of time, four or five days. This was a real challenge.

We had high winds during that time, and they were concerned about power lines getting knocked down and starting additional fires. [The power outages] were a precautionary measure. We had fires in northern Sonoma, but they turned off power for almost all of Sonoma County and all of Marin County. That’s a large area.

We had 300 patients affected by it. Many times it was the patients on oxygen, because they couldn’t use their concentrators. The durable medical equipment (DME) companies were running out of tanks. The suppliers to the DME companies were running out of oxygen. We had to bring oxygen in from outside the state. It was a super challenge. 

The power was off at our corporate headquarters. We have a backup generator, but it doesn’t carry the whole building. It carries the server rooms and the patient care areas, and because everyone in the area was running backup generators, it was putting a strain on getting additional diesel fuel for the generators.

Do you see this event influencing how you prepare for future events? Are there lessons learned or new contingency plans you’ve put in place?

Yes, absolutely. We’ve met with our DME vendors several times and have come up with new plans. And then at the intake level, we’re definitely encouraging patients, particularly those that need oxygen, to seriously consider getting a generator backup for their home. If that is not possible to have an evacuation plan, a relative they can go stay with or other arrangement.

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