Why SCAN Health Plan Will Enter Hospice VBID in 2023

SCAN Health Plan is among the Medicare Advantage (MA) payers entering the hospice component of the value-based insurance design (VBID) payment demonstration in 2023.

The four-year program — often called the Medicare Advantage hospice carve-in — launched Jan. 1, 2021, with 53 participating health plans. This number grew to 115 in 2022. Next year, 119 plans will participate, according to the U.S. Department of Health & Human Services (HHS). Geographically, the program will be available in 806 counties in 24 states in 2023, up from 461 this year.

Joining VBID will allow SCAN to provide greater continuity of services for its members through the end-of-life, as well as smoother transitions into hospice when the time is right, according to Payam Parvinchiha, corporate vice president of network quality & innovation, and Kevin Kappel, vice president of corporate development.


Led by Dr. Sachin Jain, California-based SCAN Health Plan is a $4.3 billion Medicare Advantage (MA) organization that covers more than 270,000 members.

“The main opportunity is to ensure continuity of care for our members from primary care to end-of-life care. The VBID hospice carve-in provides SCAN with oversight of the quality of care delivered to our members throughout the full duration of their health care journey,” Parvinchiha and Kappel told Hospice News in a joint email. “The hospice carve-in makes enrolling in hospice an expansion of a member’s care experience by enabling our members to continue engaging with their primary care team with transitional concurrent care while benefiting from the additional supportive services that hospice provides.”

The program’s potential to facilitate earlier adoption of palliative care was also a draw, the two executives said.


The hospice carve-in is one component of the VBID program, through which the Center for Medicare & Medicaid Innovation (CMMI) is testing new approaches to reimbursement across a variety of health care settings.  VBID represents the most significant step to date in moving hospice towards value-based payment models. 

The demonstration involves greater levels of financial risk than hospices are accustomed to through the traditional Medicare Hospice Benefit. The program also experiments with tying payment to providers’ performance against certain metrics.

Hospice VBID enters its third year in 2023. For California-based SCAN, a number of considerations made this the right time to enter the demonstration, Parvinchiha and Kappel told Hospice News.

“The program was impacted considerably by the uncertainty of the pandemic at its original launch,” Parvinchiha and Kappel said in the email. “As SCAN transitions to the new realities of health care delivery with its enhanced focus on vulnerable seniors, this is the ideal time to develop operations integrating high-quality hospice care with upstream palliative care to support our members during their entire care journey.”

During the program’s first year, CMMI required plans to pay rates comparable to the per diems providers receive through the traditional Medicare benefit. But with each participation year, the center allows plans to negotiate for lower rates — with the expectation that this will be offset by higher patient volume. Plans can also offer to cover other services such as palliative care and incentive payments tied to quality or cost savings.

The carve-in has been controversial since the day CMMI announced it.

Some providers have said they perceive a movement towards MA as a threat to the current hospice benefit. Others have been more optimistic about the demo, saying that the program will give them access to a larger pool of patients as rising numbers of Medicare beneficiaries gravitate towards MA. They also foresee greater opportunities to engage patients further upstream.

During 2022, 48% of the Medicare-eligible population are enrolled in MA, representing more than 28 million beneficiaries and $427 billion (55%) of total federal Medicare spending, net of premiums, according to the Kaiser Family Foundation.

For MA plans like SCAN, the demonstration presents an opportunity to see patients through to the end of life, as well as deepen partnerships with hospice and palliative care providers in ways that previously were not available.

According to Parvinchiha and Kappel, this will include lessons in: hospice and palliative care provider contracting; care coordination between the plan, primary care team, and the hospice [interdisciplinary team]; supplemental benefit design; and operationalizing key partnerships with vendors and providers to deploy a comprehensive, person- and family-centered end-of-life clinical model.

“The VBID hospice carve-in allows SCAN to develop the capabilities to oversee end-of-life care in a meaningful way for our members,” Parvinchiha and Kappel said. “We have a long history of driving quality with our contracted medical groups and ancillary service providers as evidenced by our sixth straight year achieving 4.5 stars. We hope to achieve the same success and outcomes with hospice providers.”

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