Palliative Care Increasingly Important to Health Plans as a Supplemental Benefit

A rising number of Medicare Advantage health plans are offering home- and community-based palliative care as a supplemental benefit, a trend that could spell further growth for hospices offering those services as well as improving access for patients. 

According to an analysis by ATI Advisory, 61 health plans nationwide are offering in-home palliative care as a benefit. This is up from 29 in 2019. More than 455,000 beneficiaries are enrolled in these plans. 

Hospices provide about 50% of home-based palliative care in the United States according to the Center to Advance Palliative Care, and the number of providers that are diversifying their services lines to include palliative care continues to increase.

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“Health plans were able to provide this as a benefit beginning in 2019 — so we only have two years of information at this point — but what we’ve seen is definitely an increase,” Tyler Cromer, principal at ATI Advisory, told Hospice News. “We’re definitely seeing some growth, but it’s only two data points. We don’t want to be too presumptive and draw conclusions about what might happen in 2021, but we are hoping it is indicative of a trend that plans are more interested in offering supplemental benefits that have the potential to really improve the quality of care for their beneficiaries.”

Through Medicare Advantage, the U.S. Centers for Medicare & Medicaid Services (CMS) contracts with private insurance companies to provide coverage for Medicare beneficiaries. Law requires Medicare Advantage plans to cover all of the services offered by traditional Medicare, but also allows for certain supplemental benefits.

Historically these benefits were very limited, but the Creating High-Quality Results and Outcomes Necessary to Improve Chronic Care Act (CHRONIC), passed by Congress in 2018, expanded the range of those benefits to include programs to address some social determinants of health as well as home-based palliative care.

The legislation also permitted Medicare Advantage plans to target specific populations among their enrollees to receive these benefits — such as those with serious illness or high-health care utilization — rather than offering the same benefits to all enrollees.

The coming years could see growth not only in the number of plans that offer palliative care, but a wide range of other benefits that could benefit seriously or terminally ill patients.

“Supplemental benefits don’t have to be primarily health related. They can include things like pest control, non-medical transportation benefits, benefits for nutrition and meals beyond the limited basis,” Cromer said. “I think the factors that are driving that change are number one the guidance and the policy changes are very important; but I think that plans, CMS and policymakers are also starting to understand the potential benefits of some of these flexibilities to help ensure better outcomes at lower costs. We don’t want to extrapolate too much, but we do really think that we’re going to see even wider, broader and more variety of benefits being offered in 2021.”  

Community-based palliative care can reduce total health care costs by 36%, a Turn-Key Health paper indicated. These services can also reduce hospital admissions by 48%, resulting in 28% cost savings per patient day. In the outpatient setting, community-based palliative care has been shown to reduce emergency department visits by 35% and hospitalizations by 50%.

Home-based palliative care could reduce societal health care costs by $103 billion within the next 20 years, the nonprofit economic research group Florida TaxWatch said in a 2019 report.

For 2020 however, the plans that are offering in-home palliative care are concentrated in relatively small geographic areas, mostly in Ohio, Pennsylvania, and parts of Minnesota, Washington state and Oregon, according to the ATI analysis.

“One thing that we’re seeing is that the palliative care services are largely being provided by smaller regional plans. They are leading the charge here,” Cromer said. “We’re seeing generally that these new benefits are being offered by the smaller insurers at a greater rate than through most market-dominant players. We do expect that more plans and more of the larger plans may start offering new benefits or some kind of some combination of these benefits in 2021.”

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