Hospices Seek Clarity on Value-Based Risk

When it comes to putting value-based payment arrangements in action, regulators and payers have gaps to fill in around billing and quality measurement. Some community-based hospice providers in particular have reported “tremendous confusion” regarding risk-bearing models as they look ahead to new and growing payment model demonstrations.

The first steps came with the hospice components of the value-based insurance design (VBID) demonstration, known as the Medicare Advantage (MA) hospice carve-in, which is nearing the start of its second year. Additional models taking shape include the direct contracting program and Primary Care First, among others, as well as forthcoming, yet-to-be announced demonstrations from the Center for Medicare & Medicaid Innovation (CMMI).

Hospices have been preparing for a shift to more risk- or performance-based models by honing their approaches to payer partnerships, diversifying their services and implementing new processes and technology into their workflows.

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Thus far, there’s a “tremendous amount of confusion, misunderstanding and just general unclearness” in the potential financial risks within value-based care models and where hospices, particularly of where community-based providers,fit into the mold, Sara Dado, senior director of clinical programs at Lightways Hospice & Serious Illness Care, told Hospice News.

Currently there’s only one insurer in Lightway’s service area that is participating in VBID, according to CEO Mary Kay Sheehan. Lightways provides hospice home- and facility-based serious illness care to children and adults across 11 counties in Illinois. That state is among the territories included in theVBID demonstration. The CY 2022 hospice benefit is part of the larger VBID initiative, which has 34 MA Organizations (MAOs) covering approximately 3.7 million Medicare beneficiaries, according to the U.S. Centers for Medicare & Medicaid Services (CMS).

A four-year demonstration, the carve-in started small in 2021, but doubled in size for 2022. Most expect further expansion in subsequent years. In the long run , the demo could significantly alter the hospice payment landscape, which historically has depended on the Medicare Hospice Benefit.

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Some providers have expressed concern about potential disruption in the industry due to changing payment models and how this could shape the delivery of serious illness and end-of-life care. MAOs such as Humana (NYSE: HUM), which is both a payer and a provider, have indicated a positive outlook of the way VBID is playing out, citing the availability of supplemental benefits such as palliative care.

Providers need greater clarity on the details and data for community-based hospices, according to Dado. Currently hospices collect data through family surveys and reporting on the CMS Hospice Quality Reporting Program (HQRP).

The new year brings additional HQRP quality measures from the FY 2022 final hospice payment rule. This includes the Hospice Care Index, which contains 10 quality indicators that are calculated using claims data. The data represent different aspects of hospice care designed to illustrate care processes that occur between the patient’s admission and discharge.

These data will be publicly reported, and data collection and reporting could drastically change, even as these metrics become an important consideration for payers as they select hospices for their networks, according to Dado.

“We’re used to providing care in a certain way, and we’re used to qualifying what our care is in a certain way and what our outcomes are, but we don’t really know how to do that quantitatively,” said Dado. “We just haven’t gotten our arms around the data piece yet. How do we really make what we do in hospice into something that’s measurable? Sometimes, the goals of community-based hospices and the payers just don’t align. It’s like we’re trying to fit a square into a circle. How do we get all of those pieces together so that it can really work?”

A concern among providers is that hospice care will become a “watered down idea” or reorient around profitability, an “unnerving” concept, according to Dado.

With CMS recently sunsetting the Seriously Ill Population (SIP) component of the Primary Care First initiative, providers are wondering what other changes in the payment and regulation pipeline could be next.

“With things starting and stopping [in these models], we start and we think we have a model and then it doesn’t go forward or it changes,” Dado told Hospice News. “That’s a big part of what’s been the challenges for community-based hospices. It’s a completely new way of thinking. Because the idea of this makes so much sense, but it’s the operations of it, the nuts and bolts of how we actually do it, that’s what causes the challenges.”

Some of the nuts and bolts that payers and regulators need to fit in place are how the payment system will function operationally for hospice providers, according to Sheehan. The need for separate billing processes could become a financial burden.

“If all the hospices have to have one way to bill Medicare and another way to bill these plans, that’s going to up our operational costs,” said Sheehan. “Because then we’re going to have to have two different processes, two different systems, two different returns when we get paid. Not only do we have a potential of getting lower payments for the care of patients, but it’s also going to be more complex behind the scenes.”

Given the historical reliance on the Medicare Hospice Benefit, payers are also new to working with hospices. Some community-based providers worry that this could adversely affect their reimbursement.

Hospice and palliative providers need to be ready to educate payers about the value of their services to patients and their families. This includes the need for data to demonstrate that they can offer high quality and lower cost of care, particularly when it comes to a provider’s track record with reducing hospitalizations, readmissions and emergency department visits.

“My underlying fear is: say what you will about Medicare, but they understand hospice and they understand the interdisciplinary team. They understand the different levels of care and all those things,” said Sheenan. “I don’t have that confidence with these [value-based] plans, that they are educated about the finer points of hospice. That may cause trouble for patients. I hope that these plans allow us to collaborate on what hospice is and what it isn’t.”

Finding a middle ground between fulfilling patient needs and managing risk is another missing link in a value-based payment systems, according to Erik Ilyayev, M.D., founder and former CEO of My House Visit. Ilyayev led the company prior to its acquisition by direct contracting entity ConcertoCare. Based in Flushing, N.Y., My House Visit provides senior care and medical services to home-bound patients.

The key to forging ahead in risk-bearing arrangements will involve providers educating and collaborating with payers to build an effective payment system, according to Ilyayev. He told Hospice News that the industry could lose providers if they do not understand or have the resources to manage risk.

“It’s really a new era for hospices. It comes down to education and working with direct contract entities and value-based organizations to show them the numbers,” Ilyayev said. “If they think that hospice is expensive, wait until they find out how expensive it is not to use hospice. The question for these regulators to understand is how do we find that middle ground of payment, but also do what’s best for the patient. A provider who’s in a value-based arrangement with 100% risk up and downside, it puts a different twist to it.”

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