More Hospices Are Developing Medical Group Practices

A growing number of hospices are developing medical group practices, with home health and palliative care services representing the largest gaps for hospices to fill in terms of community-based services and meeting seriously ill population needs.

Out of 1,200 hospice providers nationwide, more than a quarter (26%) indicated interest in developing a medical group practice and 27% reported already having an existing medical practice group as part of their services, according to a recent survey from the National Hospice and Palliative Care Organization (NHPCO).

Hospices have always employed clinicians and medical staff throughout their interdisciplinary teams. However, more organizations are recognizing an opportunity to develop new service lines to engage patients further upstream, according to the survey findings.

Medical group practices offer hospices a separate revenue stream, according to Lori Bishop, vice president of palliative and advanced care at NHPCO.

“Creating a medical group or practice is separate from hospice care, or a separate book of business. It would operate just like any clinical practice, but it might not have an actual clinic,” Bishop told Hospice News. “It’s sometimes called a clinic without walls, because it’s most often your hospice making the clinical visits in the home.”

Many in the hospice industry see service diversification as imperative to ensuring that they remain financially viable, particularly smaller community-based organizations.

Structuring a palliative care program as a physician practice can be beneficial, according to 2019 report from the California Health Care Foundation. The report indicated that payers classify the program as follows: a physician practice where the doctor and non-physician practitioner (NPP) specialty happens to be palliative medicine. There are no Conditions of Participation as found in hospice. However, any services must be deemed medically necessary and provided by a qualified individual.

Providers that operate medical groups may have an advantage when working within value-based payment models newly available to hospices. Medical group practices are the fastest way to secure payment for a palliative care program through Medicare Part B, the NHPCO survey found.

When a hospice serves patients through a medical group practice, they may see an influx of hospice recipients, depending on how frequently they encounter patients through that practice, according to Bishop. This attribution of beneficiaries is consistent with reimbursement through the Primary Care First payment model. In this program, the hospice assumes the role of the primary care provider or specialist.

Roughly 50% of hospice providers with an existing medical group are located within a geographic location that is eligible to participate in the Primary Care First model, according to NHPCO’s survey findings. About 66% provide palliative care services, but only 9% offer primary care services and 38% provide home health care. Rules around the scope of practice vary by state, with some allowing medical group practices and clinics to operate independently, while others require physician oversight.

Hospices that participate in value-based models frequently offer a hybrid of services. However, the rules vary around what different health care providers can and can’t do in terms of geographical location.

“You can negotiate for a per beneficiary, per month payment, so that it covers the cost of the interdisciplinary team,” Bishop said. “The beautiful thing about all of these different new care models is they really support you being able to provide a whole interdisciplinary team, and that is the better model, that is the ideal, is that you want palliative care to be provided by an interdisciplinary team.”