Hospices Get Creative to Succeed in VBID

Hospices will need to leverage creativity to thrive in a Medicare Advantage reimbursement environment.

Often called the Medicare Advantage carve-in, the hospice component of the value-based insurance design (VBID) model is now in its third year. Recently, the U.S. Centers for Medicare & Medicaid Services (CMS) extended the demo through 2030.

Though its ultimate outcome remains uncertain, many stakeholders believe that, in the long term, hospices can expect more interaction with Medicare Advantage plans. And to be successful in developing those relationships, providers must be ready to bring payers innovative solutions to meet beneficiaries’ needs, backed by hard data, according to Jordan Holland, vice president of value-based contracting for Compassus.


“MA plans are very used to these types of newer collaborative models on the provider side, just not yet in our space as much. So I think [VBID] really gives us the opportunity to come to them with solutions,” Holland said at the Home Care 100 Conference in Orlando. “First, listen to them, what’s important to your MA plan partner, and then help them develop the right solution, and then contract for that creatively.”

Hospices and MA plans can come together around some common goals, Holland said. Examples include improving hospice access and increasing lengths of stay, which ultimately contributes to a lower cost of care — a high priority among payers.

Hospices have new evidence at their disposal to make this case.


Recent research has shown that hospice care reduces Medicare’s costs by nearly $3.5 billion annually, with stays of six months or longer yielding the largest amount of savings, around 11%.

The National Hospice & Palliative Care Organization (NHPCO), the National Association for Home Care and Hospice (NAHC), and NORC at the University of Chicago published the joint research last week.

While operating within Medicare Advantage can lead to challenges for hospices, it also gives them an opportunity to develop innovative approaches to care delivery. This could perhaps include models that come without a six-month terminal prognosis or strict delineation between hospice and other health care services, according to Carla Davis of LHC Group.

But to achieve this, providers need to learn to speak the language of payers.

“We’ve had to manage our resources with the dollars that we’ve been given [through the traditional hospice benefit] for 40 years,” Davis said at Home Care 100. “Now what we have to do is demonstrate that value and learn how to listen and articulate that value proposition to payers.”

LHC Group may have a leg up on these processes since UnitedHealth Group’s (NYSE: UNH) subsidiary Optum Health acquired the company earlier this year for $5.4 billion, Davis indicated.

However, she added, payers and providers must take care to ensure that their program designs are evidence-based and carefully implemented to ensure they deliver quality care that meets patients’ needs. 

“Quite frankly, that’s one of the things that I’m really excited about joining together to become a part of the Optum family. We really are in a position to create what the model needs to look like. And maybe the word ‘hospice’ goes away,” Davis said. “Maybe we come up with some kind of stratification and reimbursement model that is based on the patient’s needs and not these artificial, six-months-or-less demarcation lines that don’t really exist in real life. To figure out how to wrap care around our frail elderly is exciting.”

Companies featured in this article:

, , , , , , ,