Hospice CEOs Voice Misgivings on Medicare Advantage

The top executives for companies in the hospice space have expressed serious concerns about the forthcoming inclusion of hospice in Medicare’s value-based insurance design model, often called the Medicare Advantage hospice carve-in.

Through Medicare Advantage, CMS contracts with private insurance companies to provide coverage for Medicare beneficiaries. CMS earlier this year announced that it would test coverage of hospice care through Medicare Advantage plans beginning in 2021.The agency began accepting applications for participation in the program in Dec. 2019.

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.


“We don’t see many threats in hospice, except we see something called the carve-in, where managed care will fundamentally start to contract for hospice,” said Amedisys (NASDAQ: AMED) CEO Paul Kusserow at the Raymond James Institutional Investors Conference. “I think this is the fox in the henhouse. I think managed care — at least the folks I’ve talked to — are pretty reluctant to take on hospice.”

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.

To date, no Medicare Advantage plans have announced publicly that they will participate in the program, though the number that may have actually applied remains unknown. Some plans have indicated that they were uncertain about participating in the program.


Late last year, the National Hospice & Palliative Care Organization called on CMS to delay the program on the grounds that providers and plans did not have sufficient information to prepare for a January 2021 implementation date.  

Kusserow is not the only CEO to have weighed in on the carve-in.

“It would be foolish at this point to think that managed care plans are going to get [hospice] right,” LHC Group (NASDAQ: LHCG) CEO Keith Myers told Hospice News last fall. “They are more likely at first to do what they did with home health, basically not offer the benefit as it was developed but try to ration care in a per-visit model, and that would be very wrong for hospice.”

Other leaders in the hospice and senior care space have been more optimistic about the carve-in. Katie Smith Sloan, president and CEO of LeadingAge, and former congresswoman Allyson Schwartz, president and CEO of the Better Medicare Alliance, recently issued a joint statement in favor of the demonstration project.

“As supporters of the high-quality, coordinated care that are driving principles of both the Medicare Hospice Benefit and the Medicare Advantage program, we at Better Medicare Alliance and LeadingAge believe that there is potential for a marriage of these two systems of care to create an integrated experience for Medicare Advantage beneficiaries at the end-of-life,” Sloan and Schwartz wrote. “Medicare’s hospice benefit has remained relatively unchanged since its inception in 1982, and its structure has served and continues to serve many beneficiaries well. However, this demonstration looks to remedy some of the barriers to care that have emerged over the course of the history of Medicare Hospice Benefit, and we are excited for the potential lessons to be learned.”

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