Palliative Care Providers Hitting Walls in Value-Based Reimbursement

The U.S. Centers for Medicare & Medicaid Services (CMS) has dipped its toes into value-based reimbursement for palliative care. Interest in these programs is growing among providers, but many find barriers that block their access or limit their ability to scale. 

The most visible attempt began in 2020 when CMS began allowing Medicare Advantage (MA) plans to cover palliative care as a supplemental benefit. Analysis by the consulting firm ATI Advisory indicated that the number of Medicare Advantage plans offering home-based palliative care coverage jumped to 134 in 2021, up from 61 the prior year.

Additionally, CMS is currently testing the inclusion of hospice in MA through its value-based insurance design (VIBD) model demonstration, which contains palliative care components. Often called the MA hospice carve-in, this demonstration is driving many hospice providers to diversify their services to include more upstream care.


Some Accountable Care Organizations (ACOs) and Medicaid managed care plans also address palliative care.

These expansions of payment options are positive steps, but gaps exist in their design.

“We certainly need a lot more than what’s currently available. There’s a lot of patients and families out there with serious illnesses who would benefit from home-based palliative care or clinic-based palliative care,” J. Brian Cassel, palliative care research director for the Virginia Commonwealth School of Medicine, told Hospice News. “That’s a robust, multidisciplinary form of palliative care that will be distinct from hospice. We’re overdue for payers and providers to work together to come to an agreement on how to make that happen.”


For one, a number of these models are not available nationwide, leaving some providers that would otherwise participate out in the cold. VBID, for example, is available in 461 counties in 2022, out of more than 3,000 that exist in the United States.

Additionally, while Medicare Advantage plans have the option to offer palliative care as a supplemental benefit, CMS does not require them to do so. This also limits access in some markets.

Compounding this is a lack of consensus on what palliative care actually involves. Symmetries do exist among many care models, but patients may find wide variation in what they receive. Providers will likewise see variation in what plans are willing to cover or which patients would be eligible.

“A prerequisite for scale is developing common understanding or minimum standards for palliative care, home-based palliative care in particular, you have [Medicare] Conditions of Participation for hospice; you have standards for home health. That doesn’t exist for palliative care,” Kathleen Kerr, a consultant with Transforming Care Partners, told Hospice News. “It creates an incredible amount of confusion for payers and for providers who might refer their patients to the service, and also creates incredible operational issues for the entities that want to deliver it.”

Providers like hospices who are used to providing interdisciplinary care, symptom management, conversations about patient goals and psychosocial support may encounter potential partners who envision a service limited to advance care planning or a nurse practitioner consultation, according to Kerr.

To bring palliative care to the rising number of patients who need it, change needs to occur at a macro level. This would include a standardized definition and care delivery model, clinical practice guidelines as well as quality measures.

Stakeholders have taken stabs at designing these criteria.

One key effort emerged in California. The California Advanced Illness Collaborative (CAIC) — a group of payers, providers, researchers and policy advocates — released a set of standards in March 2017 designed to inform palliative care contracts.

This initiative was launched in preparation for the January 2018 implementation of California’s Senate Bill 1004. This requires payers in the state’s Medicaid program, Medi-Cal, to cover palliative care for patients suffering from cancer, end-stage liver disease, chronic obstructive pulmonary disease, or congestive heart failure.

The benefit covers seven specific palliative services, including advance care planning, care coordination, pain and symptom management, palliative care assessments and consultations, access to an interdisciplinary care team, as well as mental health and medical social services.

“[The lack of a standardized approach to palliative care] is exactly the problem that the folks in California were trying to solve when they came up with California’s consensus standards for community-based palliative care,” Cassel said.

In addition to the CAIC, a coalition of industry organizations called the National Consensus Project for Quality Palliative Care (NCP) has developed a set of evidence-based clinical practice guidelines, currently in their fourth edition.

In tandem with this, NCP collaborated on the Palliative Care Measures Project, which CMS financed through a $5.5 million grant. The results so far are two community-based palliative care measures designed to indicate the extent patients felt heard and understood and whether they received effective pain management.

Both measures have cleared the first round of vetting by the National Quality Forum (NQF) during the Fall 2021 review cycle.

These models are promising in terms of designing a standardized approach, but to date CMS has yet to codify them to ensure consistency.

“There’s a beautiful document, the NCP clinical practice guidelines, that offers a lot of guidance to providers about what good palliative care looks like, based on evidence and expert consensus. But that document isn’t really standards, they’re guidelines,” Kerr said. “They’re designed to support contracting and to guide the relationship between payers and providers, and that’s not really an easy leap to make just working from the NCP guidelines.”

In addition to value-based arrangements, Medicare does offer fee-for-service palliative care reimbursement programs. However, these only cover physician and licensed independent practitioner services and do not sufficiently support the full range of interdisciplinary care.

The bottom line is that the system is not designed to meet patients’ needs.

Fewer than 5% of patients with serious illnesses who stand to benefit from palliative care actually receive it, according to a May 2019 report by the National Academy of State Health Policy.

For many stakeholders, including providers, industry groups and some legislators, the most viable solution is establishment of a dedicated community-based palliative care benefit within Medicare. This would allow for concurrent curative and palliative services that are not tied to a terminal prognosis.

Some have expressed optimism that a demonstration of such a model may launch in the relatively near future, but this outcome is not certain.

“One approach that might be very helpful is maximizing the proportion of MA plans and ACOs that offer organized, intentional serious illness care and demonstration of penetration and efficacy through those payment models,” Kerr said. “It will certainly help to highlight a need for a payment model for people that are in traditional Medicare, to the extent that those folks remain outside of those value-based arrangements.”

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