Joining Payer Networks Key to Success for Hospices in Medicare Advantage

The journey toward value-based care remains uncertain, yet impactful for hospice. Providers and payers of all walks are taking a sharper look at hospice as the value-based insurance design (VBID) demonstration project approaches its second year. Hospices need a seat at the bargaining table in order to maintain control of their financial destiny, according to industry stakeholders.  

Commonly called the Medicare Advantage hospice carve-in, the demonstration project took effect Jan. 1. The intention of the program is to increase access to hospice services and facilitate better care coordination, according to the U.S. Centers for Medicare & Medicaid Services (CMS). The carve-in is designed to assess payer and provider performance related to hospice within Medicare Advantage. Participation in the demonstration is voluntary for both payers and providers.

The carve-in changes the ways participating hospices receive payment for their services. In the VBID arena, hospice providers accept greater financial risk in exchange for incentives for improving quality or reducing costs.


The importance of value-based care networks will be game changing in hospice, according to Jeremy Powell, CEO of technology firm Acclivity Health. Joining a network will be key to understanding incentives and penalties as the demonstration develops, according to Powell. In coming years, MA plans are expected to create consulting businesses. Hospices will likely have to work with these firms in order to understand how payment and products will work going forward.

“The first year’s biggest change is that you’re now being paid by one of these in-network plans. Being out-of-network is going to penalize your agency and potentially reduce the number of patients you serve each year,” said Powell, speaking at the National Hospice & Palliative Care Organization’s Interdisciplinary Conference. “Different consulting opportunities are going to be your way to become an in-network provider and partner for that Medicare Advantage organization. It allows a hospice to help create what the payment triggers, milestones, incentives and penalties are based upon how they define their product.”

The earlier a hospice can get involved within these value-based payer networks, the more leverage they will have in creating payer relationships, Powell stated.


The nation’s aging population is anticipated to drive the need for end-of-life and serious illness care. The number of seniors in the United States who are 65 and older will reach 95 million by 2060, or nearly 25% of the overall population, up from 15% in 2016, according to the U.S. Census Bureau projections.

These demographic trends are driving rising demand for hospice care. Hospice utilization among Medicare decedents rose to a new record in 2019 at 51.6%, a jump from 50.6% in 2018, according to the Medicare Payment Advisory Commission (MEDPAC).

VBID has been off to a relatively small start in its first year. A total of 53 health plans are offering hospice through VBID in 2021, covering 8% of the market, according to CMS. Hospice coverage through VBID is available in a limited geographic region, 13 states nationwide and in Puerto Rico. The plans are operated by nine insurance companies, with only two of these being larger companies: Humana (NYSE: HUM) and the Kaiser Foundation Health Plan.

The program is anticipated to expand to a number of additional states next year, according to Powell. This could have a trickling effect that may have expansive promise for the hospice benefit, including extending the limitations of time.

“Hospice itself is the target for innovation around improving what could be concurrent care capabilities and improving the palette of payment and reimbursement,” said Powell. “This could also be improving what the benefit of hospice could be over time and maybe give the opportunity to relax the six month benefit definition that exists in the CMS definition of hospice. get involved if they are happening in your market, and you’re not today, a part of those particular organizations, met advantage carbon for hospice. Our recommendation is to get in touch with us, we can make introductions, the persons that are part of those organizations in your market.”

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