Hospices Must Demonstrate Value to Medicare Advantage Plans

Hospices have increasingly sought ways to demonstrate their value proposition to payers in anticipation of the approaching value-based insurance design model demonstration project, coming in 2021. Establishing relationships with participating payers, broadening the scope of care and services, and tracking patient care data will be essential next steps for hospices planning to participate in the project, commonly called the Medicare Advantage hospice carve-in.

Stepping into Medicare Advantage plans will be a new experience for end-of-life care providers navigating the nuances of participating in payer negotiations. Beginning in January 2021, the U.S. Centers for Medicare & Medicaid Services (CMS) will add a hospice component to the Medicare Advantage Value-Based Insurance Design (VBID) Model. The demonstration, according to CMS, is intended to increase access to hospice services, reduce costs and facilitate better coordination between patients’ hospice providers and their other clinicians.

“There are many things that are inherent in the spirit of hospice care that don’t necessarily fit well in the way that the Medicare Advantage program is designed,” said Anne Tumilson, CEO, ATI Advisory (ATI) during a recent Hospice News virtual summit on value-based care. ATI is a research and advisory services firm focusing on aging health care. “I think providers can expect a lot more flexibility in the way they deliver services, and potentially a lot more volume. The reason why CMS is doing this demonstration is to build a bridge between aggressive, curative care and hospice so that they can get more Medicare beneficiaries on a path of palliative care and good, high-quality end-of-life care to close the gulf between them. It’s geared towards increasing the availability of services that can help build that bridge. It’s a lot more specific set of benefits to support the patient population that could be eligible for hospice.”

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A growing number of hospice patients have been covered by Medicare Advantage plans. Recent data from the National Hospice and Palliative Care Organization (NHPCO) shows a consistent overall increase in enrollment from 2014 to 2018 of 6.7%. The carve-in stands to draw more individuals onto these plans, creating an opportunity for hospice and palliative care providers to reach patients further upstream with access to a broader network of Medicare Advantage health care provider participants. Part of the upcoming hospice carve-in aims to provide improved quality and timely access to palliative and hospice care and strengthen partnerships for goal-concordant care.

Preparing for the new hospice component has challenged providers that are looking to fit end-of-life care into VBID models among what some have seen as a convoluted set of coverage rules for enrollees electing hospice. While forthcoming legislation seeks to delay the payment demonstration’s start to 2023, arguing that providers have had insufficient time and information to prepare amid the coronavirus pandemic, advocates have urged for the hospice carve-in’s growing need. As the spread of COVID-19 took thousands of lives across the nation, an increased focus fell on improving serious illness and end-of-life care, with hospice and palliative patients at highest risk.

“The time to be building relationships within the [Medicare Advantage] plan is now. What Medicare Advantage plans want most to do is to limit their liability in cost of quality care,” said Tumilson. “For really advanced illness patients at the end of life, there’s a lot of variability in their costs. What the plans most want is to limit that variability and capitate their risk. They’re more likely to contract with you if you take a risk-based payment, that you know exactly what it will cost you to deliver those services, what your risks and liabilities are. To the extent that hospice providers can package and diversify their services and understand these costs will be very different from other relationships.”

Hospice providers who understand the cost-effectiveness of the care they provide will be better positioned to negotiate with insurance payors. Hospice providers can leverage Medicare Advantage payment structures by examining care expenses further upstream in serious illness and palliative care. A requirement of the value-based demonstration includes providers laying out patient-specific plans of care that will support their transition across curative, palliative and hospice settings. Hospices with expanded palliative care programming will have greater potential for flexibility in payment negotiations, including cost-sharing opportunities with referral sources such as physicians and hospitals. Developing relationships with participating payers prior to VBID demonstration’s start could offer greater return on hospice’s investment into the plan.

Tackling quality improvement has been among the strategies hospice providers have employed in taking steps towards value-based care delivery. Navigating the opportunities posed by Medicare Advantage participation will include risk-assessment and data tracking. Tracking quality measures of care may give hospice providers a leg up in demonstrating their value to insurance payors. In the realm of value-based care, hospices who can demonstrate quality with backed data such as high scoring of quality care measures may stand out in the VBID market.

Preparing for a value-based payment environment will involve prioritizing service diversification and providing supplemental benefits in light of the growing demand for home support care, particularly under the need for social distancing during COVID-19. Expanding supplemental benefits can nonmedical needs of meal delivery, financial assistance with home costs such as utilities, legal aid or assistance in advance care planning. Demonstrating the value of hospice in the Medicare Advantage world will include the ability to reach patients and families closer to home with community-based care.

“Our strategy beginning in 2017 was to prepare for value-based purchasing,” said Dan Ayres, CEO of hospice and serious illness care provider Helios Care. “We want to introduce ourselves as early as possible to the family and patients, first by providing palliative care or in-home services so that they are familiar with us. We’re talking to them about how to support them in other ways and about their future desires, hospice becomes a more natural transition. What is important is that there be a very transparent transition from service to service to service. If you can have providers throughout various areas of services throughout that continuum, then it is much more efficient and also more patient and family satisfaction. The same caregivers are staying with that patient throughout their transitions of care. If we’re able to have a single provider across that spectrum, then it’s more efficient, the better quality of care and the better outcomes for the patients.”

Hospice leaders may need to brace for operational changes in preparing to work with Medicare Advantage plans. Expanding staffing model from five to seven days, reducing office and facility overhead costs, selecting electronic health records, robust data collection and reporting, and telemedicine capabilities were among the strategies Ayres employed in readying Helios Care for value-based care.

“One of the foundational building blocks to prepare you for the future is telemedicine support,” said Ayres. “Through the discussions we’ve had with health plans, telephonic and telemedicine support is always a part of that discussion. We had to have that in our array of services that we could provide.”

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