Direct Contracting Payment Models to Allow Concurrent Hospice Care

The direct contracting component of the Primary Cares Initiative will allow eligible hospice patients to receive curative treatment while also receiving hospice care. 

The direct contracting options include three voluntary payment models that are designed to help the U.S. Centers for Medicare & Medicaid Services (CMS) and health care providers reduce the cost of care and improve quality within Medicare fee-for-service programs.

The models adapt and integrate concepts from other programs such as Accountable Care Organizations, the Medicare Shared Savings Program, and Medicare Advantage, as well as strategies used in the private sector.


“One of the areas in which we see tremendous benefit is in this concurrent care for beneficiaries that elect Medicare Hospice Benefit. This is something that is available in pediatrics. This is something that we’ve seen has been very attractive for the Medicare Care Choices Model,” Thomas Cornwell, M.D., executive chairman of Home Centered Care Institute (HCCI), said during a panel at the Hospice News virtual summit on Value-Based Care Strategies for Hospice and Palliative Care. “Just knowing they still have that option makes patients and families feel maybe less closed in, but also allows them to understand and come to terms with their overall disease process and really helps them stay at home.”

Cornwell is also senior medical director of Village Medical at Home, part of Chicago-based VillageMD, and founder of Northwestern Medicine HomeCare Physicians.

Medicare covers most hospice care delivered in the United States Though beneficiaries enrolled in the hospice benefit currently must forgo curative treatment, CMS has been exploring alternatives to that policy through the test of its Medicare Care Choices Model, which the agency launched in 2016 and plans to conclude in 2021. 


The direct contracting models provide an additional opportunity for patients to receive concurrent care starting in 2021.

The Primary Care First general option is still scheduled to begin on January 1 of next year. The performance period for CMS direct contracting models will likewise be delayed until April 1, as will the program’s Serious Illness Population model. The agency made these delays in response to the fallout of the COVID-19 pandemic. 

The Center for Medicare and Medicaid Innovation (CMMI) at first indicated that only large practices of more than 5,000 patients were eligible to participate in direct contracting models. However, CMMI later developed a pathway in the first year for smaller organizations with a threshold of 250 patients. This is designed to address a high-needs population, which the agency defines as patients with a hierarchical condition category (HCC) score greater than 3, or a lower HCC score with multiple unplanned hospital admissions and demonstrated frailty or disability.

Health care organizations would assume 50% risk or 100% total risk for these patients.

“One of the advantages of this program is the ability to provide concurrent care, because a lot of those patients, a lot of oncology patients, will receive expensive therapies. Those patients typically are functionally pretty good, so the ability to provide concurrent hospice care is going to enable hospices to have these patients on service longer and actually would be a better alternative for these patients than something like the [Medicare Care Choices Model],” Eric Bush, M.D., chief medical officer of Hospice of the Chesapeake, said at the Hospice News summit.

Research has indicated that continuing other treatments during hospice has medical benefits for adult patients and can help control or reduce health care costs. A study of more than 13,000 veterans in Veterans Affairs Medical Centers found that patients receiving hospice care concurrent with chemotherapy or radiation therapy were less likely to use more aggressive treatments or be admitted to intensive care compared to similar patients who were not enrolled in hospice, significantly reducing medical costs.

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