Hospices See Rising Volume, Billing Challenges in Medicare Advantage

Value-based care has opened up a different world to hospices beginning this year. More than 90 days into the value-based insurance design (VBID) demonstration, hospices are seeing rising patient volumes while expanding service offerings and adapting to new billing processes. The program, often called the Medicare Advantage hospice carve-in, launched Jan. 1. 

The Center for Medicare & Medicaid Innovation (CMMI) has been spearheading initiatives leading to a sea of changes in hospice operations in the past decade since the Affordable Care Act (ACA). Medicare and Medicaid programs have since reoriented around value-based care payment models, which tie payments to quality of care and cost savings.

Thus far in the first quarter of the program, participating hospice providers are seeing benefits in terms of the potential to reach more patients, according to Janell Solomon, director of compliance at Colorado-based Sangre de Cristo Community Care, who spoke at a recent Hospice News webinar. The Colorado-based hospice and home health provider exceeded average daily patient census growth projections during Q1, with increases largely attributable to the carve-in.


“We really blew that anticipated number out of the water,” said Solomon. “It really shows that there’s obviously a patient population who has joined this plan that maybe we wouldn’t have seen in the past.”

Sangre de Cristo expected to see five to eight Medicare Advantage plans during Q1, but actually cared for 20. The company had an average daily census of 5.28 patients covered by Medicare Advantage during that period.

Through the VBID demonstration project, the U.S. Centers for Medicare & Medicaid Services (CMS) is testing the inclusion of hospice care for the first time through Medicare Advantage plans. According to Solomon, the additional supplemental benefits of Medicare Advantage can help bridge the gap for different services that patients may need.


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.

Improving quality and reducing costs are the two pillars of value-based care, as Medicare seeks to slow the unsustainable trajectory of the nation’s health care spend. Hospices have increasingly perceived services such as palliative care, a Medicare Advantage supplemental benefit, as an avenue to improve access and awareness among patients. Breaking down barriers such widespread public misconceptions end-of-life and serious illness care have been an ongoing hurdle for hospice providers.

“Patients have access to all the traditional Medicare hospice benefits, but some of the [Medicare Advantage] benefits that they have access to are transitional concurrent care,” Solomon said. “That can help bridge the gap for different services that might be required by that hospice patient. All three of these services are unique and different from the standard Medicare hospice service and are a requirement under the plan.”

While hospices are seeing benefits, challenges remain. Providers have had to get up to speed on how to work through this new payment system while responding to a global pandemic that came with gusty financial headwinds.

This new payment environment comes with the weight of incorporating new billing processes. Hospice providers have had to invest in new technology systems, as well as staff education and training.

“We made sure our medical records team was prepared to submit requested documentation differently,” said Sarah Bosko, CEO and administrator of Hospice of the Estes Valley, during the webinar. Estes Valley is a hospital-based skilled and non-medical home health and hospice provider in Colorado.

“One of the biggest pieces for us was intake, where instead of [patients] going through a standard Medicare payer, the [hospice] eligibility has to be checked through Humana,” Bosko said. “The other piece is the back-end for the billing — that dual requirement for both [claims] to the Medicare and to the VBID provider, making sure that we could get that system running.”

As the demonstration period runs its course over the next four years, the carve-in may be having a rippling effect even on hospice providers who are not participating, according to Jessica Rockne, senior product marketing manager at MatrixCare, a home health, hospice and palliative care electronic medical record provider. The depth of the impact will largely depend on their patient population and geographic service region.

The program had a relatively small start in its first year. Nine participating Medicare Advantage organizations make up a total of 53 plans thus far that are offering the carve-in benefit in 206 counties within 13 states across the United States and Puerto Rico. However, the carve-in may be having a rippling effect on providers who are not participating.

According to Rockne, CMS will announce the calendar year 2022 model participants in late September, and the release of additional information in October.

“In the first two years of the model, the choice remains with the patient to choose an in-network or an out-of-network provider, but the Medicare Advantage plan can have a consultation with the patient prior to hospice provider selection,” said Rockne. “VBID plan enrollees may travel outside of the service area and do have the right to choose hospice providers who are not in the plan’s service area. This is where there can be an impact — your hospice would need to comply with the VBID plan out-of-network requirements should this occur.”

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