Through Education, Collaboration Hospices Can Help Shape Value-Based Palliative Care

Palliative care packs a small but meaningful punch in the value-based payment arena.

But to successfully negotiate value-based contracts, hospices will need to educate payers about the value of palliative care, according to J. Cameron Muir, M.D., chief innovation officer of the National Partnership for Healthcare and Hospice Innovation (NPHI).

Specifically, providers can help orient contract discussions around collaboration between the involved parties. This is the first step toward change, according to Muir.


“We need to learn a lot about ‘plan land,’ and insurance plans need to learn a lot about palliative care,” Muir told Hospice News during the 2022 Palliative Care Conference in Chicago. “And that education — if it’s done in a collaborative fashion with a plan that’s interested in collaborating — can be really, really meaningful. We need to figure out what the shortlist is.”

Palliative care is generally a poorly understood and often neglected aspect of the health care system.

When payers and providers come to the negotiating table, they may lack a certain degree of common ground. Many of these payer organizations do not have a solid grasp of palliative care, in part because no standardized definition currently exists.


The key to reaching consensus on what palliative care entails is demonstrating how these services can improve quality of life for patients through seamless care transitions and expanded access — both cores of value-based care, according to Muir.

Quantifying the potential cost savings through reductions in higher-acuity care will be the crucial arrow that hospices need to have in their quiver.

Hospices — which provide about 50% of community-based palliative care in the United States — also have a learning curve. Many are unaccustomed to working with private payers, as their core business is reimbursed almost entirely through the Medicare Hospice Benefit.

To raise their voice as the future of palliative care takes shape, hospices need to ensure they get a seat at the table, according to Muir. But they need to be clear on who is sitting across from them at that table, along with their interests and their priorities.

With this foundation, hospices can strategize on how to navigate the ensuing discussions, he indicated.

“It may actually be as helpful or more helpful to say, ‘Help us understand your pain points as a [health] plan, and then we’d be happy to share with you what we can do,’” Muir said. “If we keep asking, learning, thinking and talking, then there’s a huge opportunity, particularly in the palliative component. Get to the table, but also know who you’re going to the table with. Humility and learning is key.”

Palliative care made its first strides into the value-based care arena in 2020 when the U.S. Centers for Medicare & Medicaid Services (CMS) allowed Medicare Advantage (MA) plans to start covering it as a supplemental benefit.

The following year, CMS launched the hospice component of the value-based insurance design (VBID) model demonstration, intended to test the inclusion of hospice within Medicare Advantage. The Center for Medicare & Medicaid Innovation included elements of palliative care in the program’s design.

These models, along with a few Accountable Care Organization arrangements, are the only reimbursement systems to date with the potential to support a full interdisciplinary approach for palliative care reimbursement. The CMS fee-for-service model only covers physician and licensed independent practitioner services.

The penetration of value-based palliative care payment is thus far small but growing. Last year, 134 MA plans offered home-based palliative care coverage, a rise from 61 in 2020, according to an analysis by ATI Advisory.

These payment models are relatively new, representing a small but important beginning, according to Muir. While they don’t meet the standard of the dedicated benefit for which many hospice stakeholders have called, they can be a showcase for the value that wider availability of palliative care can achieve.

Data will be key to demonstrating that value, which in turn can help make the case for a dedicated community-based palliative care benefit within Medicare, according to Fred Bentley, managing director at health care research and consulting firm ATI Advisory.

“[Medicare Advantage plans] are the ones holding the purse strings, and they really need to understand how palliative care helps manage costs and utilization more effectively,” said Bentley at the conference. “The data and the evidence are there to show that when palliative care is done effectively early on, you do avoid hospitalizations and you avoid unnecessary visits to the [emergency department (ED)]. That is music to the ears of health plan executives.”

Many MA plans are in “growth-mode,” seeking differentiation from competitors as value-based payment expands, and offering home-based palliative care could be a compelling selling point to payers, Bentley continued.

MA plans will want to work with providers that demonstrate greater financial benefits than risks. Performance data on palliative care could illustrate its potential to reduce overall health care expenditures long-term, he stated.

Expanded access to palliative care could reduce societal health care costs by roughly $103 billion during the next 20 years, according to researchers from Florida TaxWatch.

Contributing to this is the finding that palliative care could drop health care costs by more than $4,000 per patient, according to a July 2017 study in Health Affairs.

To fully implement a robust payment and delivery model, palliative care will need to come with quality measures and measurement of clinical and financial outcomes, according to Bentley.

“There’s a lot of risk and attribution in the total cost of care model in MA. In VBID in particular, the financial risk is in the plan,” said Bentley. “What they’re doing at the plan level is trying to figure out whether [palliative care] is going to not only be important to them financially, but also whether the beneficiaries are going to like it. I think as plans learn more about palliative care, they’ll be even more inclined to experiment with this. And if they start creating palliative care networks, you don’t want to be on the outside of that.”

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