Hospices See Gaps Between MA Carve-In Design Vs. Results

The advent of value-based programs such as the hospice component of the value-based insurance design (VBID) demonstration hold financial promise for providers — as well as risks. As the hospice component of VBID nears the end of its first year, some providers are seeing gaps between how the program is designed and how it is performing.

The carve-in kicked off with a small start in 2021. CMS indicated that participation in the carve-in will double next year. CMS anticipates a total of 115 MA plans in 2022, up from 53 this year. The program will also expand its reach geographically and become available across 461 counties nationwide, versus 206 this year. Some stakeholders anticipate that the VBID hospice demonstration could be hugely disruptive to the industry.

“A lot of organizations — mine included — are chasing after value-based contracts in palliative care and other types of post-acute services,” said Agrace Hospice & Supportive Care CEO Lynne Sexten during the Hospice News Elevate conference. “MA is this bright new shiny coin in hospice, but the way that the design is being executed is wholly a failure in the first six months, in my humble opinion. There’s a lot of really neat nifty stuff that CMMI has written on a piece of paper that they envision their demonstration to be about, and then there’s the reality.” 

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Some of the discrepancies include provisions designed to address social determinants of health, Sexton told Hospice News at the conference. MA plans typically negotiate for payment rates that are lower than the per diems that hospices receive through the traditional Medicare Hospice Benefit. On paper, the plans intend to invest the savings to aid beneficiaries with social determinants. According to Sexton, this is not happening thus far.

The U.S. Centers for Medicare & Medicaid Services (CMS) in 2019 announced that Medicare Advantage plans will begin covering supplemental nonmedical benefits in 2020 that include palliative care and support for social determinants.

Social determinants of health represent one of the biggest opportunities for hospice providers to move care further upstream in value-based payer markets, according to Dean Forman, chief operating officer of Chapters Health System.

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“There’s an opportunity to move upstream, but to do it in a way that involves the organizations in addressing the social determinants of health needs,” said Forman. “We need to figure out how to wrap those services in a way that they provide the productivity you need with a patient who is serious, advanced, or chronically ill, and at that end-stage really walk with them as community-based partners through that journey and take out the fragmentation in care that exists today.”

When it comes to palliative care, many providers thus far are not seeing the results they expected. While the VBID demo requires the MA plans to cover palliative care as a supplemental benefit, many of the payers have not been contracting with the hospices in their preferred provider networks.

Demand for palliative care has skyrocketed during the pandemic, but the need had been growing since long before the outbreak. At least half of the community-based palliative care providers in the United States were hospices as of 2019, according to the Center to Advance Palliative Care (CAPC).

“We’re six months in and the jury is still out, but it is not happening yet. These MA plans are giving hospices the haircut, and they’re not even making sure that the beneficiaries they are covering are at least getting palliative care services from those hospices,” Sexton said. “They’re creating their own palliative care programs, and they’re keeping patients in it longer than they should be. There’s an opportunity for us to educate these payers.”

A major risk for some providers is the need to build sufficient scale to attract the MA plans’ interest. Scale and experience are the “name of the game,” Sexton said. Leading up to demo’s Jan. 1 implementation, hospices have increasingly worked to build scale to gain a competitive edge in the value-based payment landscape. Some providers, often non-profits, have joined forces in collaboratives or joint ventures to leverage their combined negotiating power with payers and centralize back office operations.

Agrace Hospice recently entered into such a collaboration with other providers in its home state of Wisconsin.

Quality and patient outcomes will be key to demonstrating a hospice’s value proposition in VBID, according to Kirby McDaniel, senior vice president of applied insights at WellSky. Jointly owned by two private equity firms, TPG Capital and Leonard Green & Partners, WellSky is a health care software company that serves roughly 15,000 client sites globally.

Success in a value-based care payment environment will look vastly different than in a historic hospice reimbursement world, with quality and patient outcomes key as priorities for payers, according to McDaniel.

“Value based care is all about paying for quality and outcomes, not volume. A key question is: What is quality in the world of hospice, what will your solution need to tell you and your staff so that you can be sure you’re delivering it?” McDaniel told Hospice News at Elevate. “You can’t manage what you can’t measure, and you can’t improve what you can’t see. Success in that environment is going to be different than what prior definitions of success were. We’re designing a better ramp or bridge to this phase of end of life for patients.”

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