Value-Based Models Could Promote Palliative Care Integration

Evolving value-based payment models can promote system integration of palliative care, posing risks and opportunities for participating hospice providers. Hospices will need to be proactive in building relationships with payer networks to reap the full benefits of these programs.

A growing number of hospices have been diversifying their services to engage patients further upstream and open new revenue streams. Palliative care is among the most common new business lines, with hospices representing an estimated 50% of community-based palliative care providers nationwide, according to the Center to Advance Palliative Care.

Currently Medicare reimburses for palliative care physician and licensed independent practitioner services through fee-for-service payment programs that often do not sufficiently support the full range of interdisciplinary care.


As value-based care opens up to hospices for the first time at the start of this year, these payment models offer palliative providers an opportunity to receive more inclusive reimbursement, according to Brad Stuart, chief medical officer of the Coalition to Transform Advanced Care (C-TAC).

“Payers now can pay for palliative care. We’ve worked for decades to make that happen,” said Stuart during the Hospice News Palliative Care Summit. “It is a chance for provider groups to integrate more tightly with payers and help to reduce the kind of spending that we’ve been fighting for a long, long time.”

The payment models newly available to hospice include Medicare’s Primary Care First initiative, the direct contracting program and the value-based insurance design model, often called the Medicare Advantage hospice carve-in.


Primary Care First is a U.S. Centers for Medicare & Medicaid Services (CMS) program designed to control costs, reduce avoidable hospitalizations and improve care coordination for patients and their families. Though implementation of some aspects of the initiative have been delayed, the application period for the program’s second year is underway.

Opportunities abound for hospice providers to reach patients across the health care continuum as the initiative rolls out, with Primary Care First offering hospices new sources of revenue and referral relationships. Strategic partnerships with primary care providers will be key for hospice and palliative care providers seeking to capitalize the initiative, as the program orients around functions of comprehensive primary care, including care management, patient access and continuity of care, comprehensiveness and coordination, patient and caregiver engagement, and planned care and population health.

“It is a huge win for you to be able to stand in front of those Primary Care First generation model participants and take on all of those patients that qualify first for palliative and then second for the benefit of hospice,” Jeremy Powell, founder and CEO of Florida-based Acclivity Health, told Hospice News. “That’s a huge win, and that moves you step by step towards this notion of really being well-paid for delivering services.”

With the direct contracting program, hospices can receive reimbursement for palliative care on a per-patient, per-month basis. Unveiled in conjunction with the Primary Care First initiative, direct contracting includes three payment model options designed to help the agency and health care providers reduce the cost of care and improve quality. Among these options is a high-needs population model designed to address the needs of patients with serious or chronic illness who frequently utilize high-acuity care.

The models incorporate lessons learned from other programs such as Accountable Care Organizations, the Medicare Shared Savings Program, and Medicare Advantage. In the global direct contracting model, providers bear 100% of the risk associated with eligible patients, and 50% risk with the professional option.

Hospice providers are fully covered within direct contracting from a financial stability perspective, Powell told Hospice News.

“For palliative care to stand all on its own, there are very lucrative contracts out there for [hospices] to participate in,” said Powell. “You can show up in those contracts as either a true participant or a preferred partner, and in those contracts they’re going to pay you a greater than fee for service.”

The direct contracting program launched as planned on April 1, despite some delays brought on by the COVID-19 pandemic. However, CMS has indicated that they are not currently accepting applications for the demonstration’s second year, pending a review of Trump-era initiatives by the Biden Administration. This means that the best remaining option for hospice providers is to partner with an existing direct contracting entity.

The third new value-based program available to hospices is the VBID demonstration. With the carve-in taking effect this year, hospices can leverage palliative care services within VBID models. Palliative care is among the requirements of participating providers.

Medicare Advantage plans also have the option to offer palliative care as a supplemental benefit. Through Medicare Advantage, CMS contracts with private insurance companies to provide coverage for beneficiaries. Law requires those 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.

The VBID demonstration has the potential to open the door to providing curative care concurrently with hospice.

“VBID specifically calls out hospice and concurrent care. Those health plans are creating even more lucrative payment models — specifically for palliative and concurrent care.” said Powell. “Also, because it’s a hospice benefit, your hospice will get to ride into that journey with some interesting plan designs. That’s moving you more and more into the right level of pay, but it’s also going to move you more and more into this understanding of how you can achieve the best clinical and financial outcomes.”

No standardized definition of the term “palliative care” exists. However, the U.S. Centers for Medicare & Medicaid Services (CMS) defines these services as “patient and family-centered care that optimizes quality of life by anticipating, preventing and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social and spiritual needs and to facilitate patient autonomy, access to information and choice.”

Even as these value-based models take shape, stakeholders in the hospice space are advocating for CMS to establish a dedicated community-based palliative care benefit within Medicare.

A community-based benefit would likely originate as a Center for Medicare & Medicaid Innovation (CMMI) demonstration project designed to allow patients to receive palliative services concurrently with curative treatments. Patients would be eligible to receive palliative care without the six-month terminal prognosis currently required for hospice election. Such a program would also need to be supported by robust quality metrics.

Hospices can leverage quality data to make the case in support of a community-based palliative care benefit while also working in concert with payers and referral sources to determine how those services fit into value-based care models, according to Stuart.

Hospices will need to be proactive in working within payer networks and Medicare Advantage plans to integrate palliative care into their services and payment arrangements, Stuart told Hospice News.

“Start talking with your referral or provider network about how you can work more closely together to manage this population more proactively,” Stuart said. “Talk to your plans about how you can use Medicare Advantage to save them money and get better clinical results. If you’re going to survive and not be eaten alive by what’s coming, be proactive and get out there. Learn how to talk to your stakeholders and sell palliative care offerings, because that’s where the world is heading.”

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