The hospice space is evolving and providers will likely spend much of 2020 girding themselves for more change, including movement towards value-based payment models, accelerating industry consolidation, and possible changes to reimbursement, among others.
At the forefront of many hospice leaders’ minds will be how they should gear up for the Medicare Advantage hospice carve-in demonstration, currently to begin in 2021. Many details are still unclear about the nuts and bolts of that program, and as a result some have pushed for the U.S. Centers for Medicare & Medicaid Services (CMS) to delay the program’s start.
For now however, the 2021 date remains in place, meaning that hospices that plan to participate in the demonstration have a great deal of work to do.
Hospices also must consider whether they will participate in the CMS Primary Care First payment models, which include general option, a Serious Illness Population option, and direct contracting opportunities.
“I can’t stress enough that this has to be on the radar of any serious hospice or palliative care provider in 2020, depending on their geography and depending on the nature of their practice,” Edo Banach, president and CEO of the National Hospice & Palliative Care Organization (NHPCO) told Hospice News. “If hospices aren’t thinking about them now, they certainly should be thinking about them and how they can participate. This may very well be something that goes from being a small demo to a much larger indication of the direction of fee-for-service serious illness care.”
Dollars and Sense
As with the Medicare Advantage carve-in, hospices are waiting for more detail on the workings of Primary Care First and all of its associated models. CMS has already pushed back the implementation date to 2021, after initially planning a 2020 start date.
The agency first announced the program in April and will implement the models initially in 26 regions throughout the United States. Hospices and palliative care organizations are eligible to participate in the payment models provided they meet the program’s criteria. The program is designed to control costs, reduce avoidable hospitalizations and improve care coordination.
“I think 2020 will a big preparation year, and from an association perspective, a big communication year to see if it’s there are tweaks and things that can be done to make the models work better for participating palliative care providers in advance of them getting started so that they can roll out as smoothly as possible,” said Mollie Gurian, director, hospice, palliative and home health policy for LeadingAge. “There’s preparation that can be done for all of those models, and hospices should start thinking about how it impacts what their business looks like. I think you’ll see some hospices participating in partnerships and direct contracting as well, especially in the high needs track.”
Even within the confines of the current Medicare Hospice Benefit, some change may come.
The Medicare Payment Advisory Commission (MEDPAC) intends to vote on a recommendation to slash the hospice aggregate payment cap by 2020, as presented at the commission’s most recent meeting. While such reductions are routinely on the MEDPAC agenda, the issue has never before come to a vote, NHPCO’s Banach said. The vote is scheduled to occur at MEDPAC’s January meeting.
“We will be continuing to monitor the impact of the payment changes from last year,” Gurian told Hospice News. “There were some substantial payment changes that were made in the rule last year, so seeing how those impacted the provision of care.”
Hospices will also continue to feel the impact of decisions made during 2019, such as CMS’ rebasing of hospice payment rates for fiscal year 2020, cutting the payment for routine home care and increasing the per diem for continuous home care, general inpatient care and inpatient respite care.
Eyes on Oversight
Regulatory agencies such as CMS and the U.S. Department of Health and Human Services Office of the Inspector General (OIG) fixed their eyes on the hospice space during 2019, with OIG releasing several reports on hospice quality, billing and supervisory practices, each containing calls for CMS to adapt or intensify regulatory enforcement.
“Going into next year, continuing efforts by the Congress to follow up on the OIG report from July and implement oversight and education legislation that the house is working on now,” Banach said. “If it doesn’t move, by the end of this year, it will be pushed to the beginning of next year, and [the legislation] is largely better transparency, better oversight, better education, and depending on the details, could be something that we would support — but it all depends on what those details are.”
The first OIG report indicated that about 20% of hospices surveyed by regulators or accreditors between 2012 and 2016 had a condition-level deficiency that posed a serious safety risk. A second report discussed 12 examples of those deficiencies in-depth. OIG examined state agency and accreditor survey findings as well as complaint data from 2012 through 2016. Regulators and accreditors surveyed nearly all hospice providers in the nation during those years.
“We’re going to still see a lot of discussion around [oversight] in the first quarter of 2020, and I think we’re going to see some action around that. There’s a lot of work and discussions going on right now about what that looks like,” Gurian said. “That’s going to be a huge piece of 2020, making sure that oversight is balanced between education and targeted enforcement of the outlier bad actors.”
Consolidate and Diversify
The business trends visible during 2019 will likely carry over into 2020, including a very active mergers and acquisitions market. Hospices will also continue to diversify their services offerings to develop new sources of revenue and engage patients and families further upstream.
“I think we’re going to continue to see consolidation, not only among for-profits, but also nonprofits affiliating with one another,” Banach told Hospice News. “I think we will continue to see diversification, and I don’t think it’s driven solely by finances. I think it’s also driven by consumer demand. People don’t want to change teams or change companies when they go from being chronically ill to seriously ill, and providers want to be able to offer that continuum for them.”
Smaller nonprofits aiming to compete with larger companies have been creating regional affiliations to develop greater negotiating power with payers, scale their operations and share back-office costs.
“I believe strongly in creating a continuum for people that are — I refer to them as the pre-hospice population — people with advanced illness, who won’t be getting well, but they’re also maybe not eligible for hospice, need to have the support of an interdisciplinary team approach care model, which is obviously replicating the hospice model,” Tom Koutsoumpas, co-founder of the Coalition to Transform Advanced Care and CEO of the National Partnership for Hospice Innovation told Hospice News. “We all should be looking at how we can provide that pre-hospice service to create a continuum, so that we can care for people for a longer period of time with a really organized system of care that improves the quality of their lives.”