Hospices to Leverage Data Analytics in Value-Based Payment Models

Data management and analysis will become increasingly important as hospices move gradually closer to working in value-based payment environments.

While current Medicare Hospice Benefit isn’t going away anytime soon, it stands to reason that at least a portion of hospice business will include a wider range of payment models, particularly with the advent of Primary Care First and the value-based insurance design demonstration project, commonly called the Medicare Advantage hospice carve-in. Both the carve-in and Primary Care First, including the Serious Illness Population model, are set to begin Jan. 1, 2021. 

Hospice providers are using new machine learning tools to identify patients in need of end-of-life or palliative care services earlier in the course of their illnesses and to track outcomes. These types of data will also be important when hospices begin to negotiate rates with private payers.


“Hospices would need to develop their infrastructure and have systems in place that allow the staff to track outcomes and key metrics, and potentially have someone on the payer side reviewing the data and staying in contact with hospice professionals that are needed to remedy any issues that they see,” said Jake Vesely, senior analyst with Provident Healthcare.

Among the key metrics that hospices would be tracking are patient outcomes and satisfaction data, hospital readmissions as well as any complications that could later lead to a readmission, Vesely said.

Hospices are already gathering data through electronic health records and in some cases machine learning systems, either their own, the payer’s or a vendor’s. Machine learning is a form of artificial intelligence that uses algorithms and statistical models to detect patterns in data and make predictions based on those patterns.


Hospice providers are using new machine learning tools to identify patients in need of their services earlier in the course of their illnesses and to ensure that patients receive appropriate levels of home visits in their final days. In a value-based payment environment like Medicare Advantage or Primary Care First, they could leverage those tools to demonstrate their value proposition to payers.

“Your No. 1 priority that you should work towards is figuring out the one or two key metrics that you can use to differentiate yourselves in a way that provides a long term competitive advantage. This is important to excel under value-based payments for hospice, but also useful in terms of being able to continue to grow with referral sources and soon with Medicare Advantage payers as well,” said Wes Little, chief analytics officer for WellSky. “The two that really come to mind to me in the end-of-life care space is how well did you care for patients when they really needed you, and hospital readmissions. How much care did this patient receive during their last seven days of life? Patients really need to be able to have a longer length of stay than many people get in order to really be able to experience the quality care that hospices can provide, and obviously because of the big cost that happens if someone unnecessarily dies in a hospital facility.” 

While hospice utilization is rising, lengths of stay for many patients remains too short for them to receive the full benefit of hospice care. Hospice utilization among Medicare decedents exceeded 50% for the first time in 2018, according to the National Hospice & Palliative Care Organization (NHPCO). More than 27% of patients in 2017, however, were in hospice for seven days or less, with another 12.7% in hospice for less than 14 days, NHPCO reported.

In addition to tracking performance, hospices can also use to the data they collect to drive improvement, by identifying potential deficiencies they can work to correct, or to establish and prioritize improvement goals.

“I would urge hospice leaders to look around their organization and find people who may be able to think in this analytical and creative way and also be able to rally teams around using the data to enhance the care that they provide,” Little said. “Every hospice provider today should be thinking about how their organization evolves to take on the relationships with managed care providers and Medicare Advantage plans in a way they haven’t before.”

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