Medicare Advantage Plans Uncertain About Hospice Carve-In Participation

Seven weeks into the application period for participation in the Medicare Advantage Hospice carve-in, payers as well as hospices have little information about how — or how much — plans would be reimbursed by the U.S. Centers for Medicare & Medicaid Services (CMS).

The dearth of information has created some uncertainty as to whether plans will participate in the program beginning Jan. 1, 2021.

CMS has said that some of these details will be released during the month of February. Some observers speculated that this payment information would be included in the Contract Year 2021 and 2022 Medicare Advantage and Part D Proposed Rule released earlier this week, but that rule did not address the inclusion of hospice in the Medicare Advantage Value Based Insurance Design (VBID) Model, the formal name of the carve-in.


Meanwhile, the program’s March 16 application deadline looms.

Hospice News reached out to several of the largest Medicare Advantage plans in the nation; each organization that responded indicated that they had not decided whether or not they will apply and offered no further comment on the program.

Stakeholders in the hospice space who have been in touch with the plans indicated that while the plans have a strong interest in the carve in, they need more information before they sign on.


“We have had some conversations with payers in the [Medicare Advantage] space and what we’re hearing is actually fairly positive. The big question mark for them is the capitation rates. They’re probably looking at all of the other aspects of the [request for applications], meaning things like the payment rates to hospices, the provider network requirements, and I think that they’re assessing those things,” John Richardson, chief strategy officer for the National Partnership for Hospice Innovation, said. “But until they have some assurance from their actuaries that the capitation rates that CMS is going to propose are adequate, they’re not going to commit to doing it, at least initially.”

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 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.

The Medicare Advantage program has been growing in recent years. The number of participating beneficiaries tripled between 2019 and 2020, totaling nearly 1.2 million enrollees in 30 states, according to CMS.

CMS told Hospice News that the agency still expects to release additional information about the Medicare Advantage hospice capitation rate methodology this month, following the release of the forthcoming Advance Notice of Methodological Changes for Fiscal Year 2021 for [Medicare Advantage] Capitation Rates.

Payers are unlikely to jump in until that information is released.

“Plans will need to understand those details very quickly in order to make at least a primary decision for this March 16 deadline,” Matt Kazan, principal at the consulting firm Avalere Health, told Hospice News. “Plans are going to be asked to provide more benefits than they do today. [The Center for Medicare & Medicaid Innovation] said they will pay them an extra capitated amount that will be based on hospice fee-for-service costs. It will be very important for plans to understand whether that payment is adequate for the specific hospice costs in their market area to determine if this is a worthwhile demonstration to participate in.”

The National Hospice and Palliative Care Organization has called on CMS to delay the start of the Medicare Advantage hospice carve-in demonstration to allow potential participants more time to learn and consider the as-of-yet undisclosed details. The agency has shown no sign of delaying implementation thus far.  

CMS may allow some payers to submit applications past the March deadline and into the bidding period slated to end in June, according to Kazan, so participation remains a possibility, but at this point the outlook for 2021 remains murky.

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