Palliative care lacks a standardized definition within current value-based reimbursement systems, making it difficult to determine the full scope of services for seriously ill patients.
Palliative care services are intended to address physical, psychosocial, social and spiritual needs of seriously ill individuals. However, the full breadth of interdisciplinary services involved in palliative care has yet to find a sufficient reimbursement path, according to some industry stakeholders and providers.
Hospices represent a large portion of palliative care providers nationwide. The U.S. Centers for Medicare & Medicaid Services (CMS) introduced palliative care payment avenues for hospices in its value-based insurance design (VBID) demonstration model. Commonly called the hospice carve-in, VBID allowed hospice providers to step into value-based payment for the first time and included palliative care among the supplemental services.
One main issue is that, much like other payment models, the VBID demonstration leaves much to interpretation around the different approaches to palliative care delivery, according to Theresa Forster, vice president for hospice policy at the National Association for Home Care & Hospice (NAHC).
A “great deal of criticism” and concern exists around lacking standardized definitions of palliative services under VBID, as well as other specific patient eligibility criteria for this care, Forster indicated.
“A pretty widespread concern is that CMS still fails to define the actual benefits that they want to provide as part of this package, and there’s no specific standard rate for providers who are delivering these palliative care services,” Forster said during NAHC’s Financial Management Conference in New Orleans. “After the first year of the [VBID] model, CMS did issue some guidance that encourages Medicare Advantage organizations to offer a series of services as part of their palliative care model. It’s important to mention that while CMS encourages all of this, the services are not mandated as part of their palliative care coverage.”
This creates some challenges for the evaluation of the impact of these services, Forster said.
For now, palliative care is open to any value-based Medicare Advantage enrollees with serious illnesses that are experiencing a decline, especially those patients who are either not yet eligible for hospice, she explained. This leaves wide variances in outcomes, experiences and quality of palliative care, Forster added.
The VBID model allows regulators to gauge how palliative services fit into the care continuum for seriously ill patients, according to NAHC President Bill Dombi.
Through the VBID model’s data outcomes, regulators are able to gain a better understanding of palliative care’s value proposition of these services for payers and providers alike amid rising demand for services and professionals to provide it, he indicated.
“Hospice and home health payment benefits are ripe for including palliative care,” Dombi told Hospice News. “To take a piece of that universe of palliative care needs that are out there is crucial. To do so without having it be a significant cost can be a challenge if legislators aren’t looking at it as a priority. We have to help break down the log-jam in health care, and our job is to bring margin points on palliative care to the forefront to mandate it as part of a public benefit program.”
Data can help illustrate how these services help to fill large areas of untapped patient needs, according to Frontpoint Health CEO Brent Korte.
Seriously ill patients tend to utilize high-cost emergency health care services to a larger degree than others, often in a cyclical fashion that can place a strain on providers and payers, Korte said.
“When patients that are sick get on and off the medical train and their clinicians are not talking to them about palliative care, that leaves a huge gap of an enormous, forgotten population of people on the table,” Korte told Hospice News. “If you’re just getting poked and prodded the last 24 months of life then you’re miserable and Medicare needs to figure that out. Economically, there has to be an incentive for competition and for providers to grow their services.”
The cost-savings around palliative care are particularly important to engaging Medicare Advantage payers in VBID, according to Jordan Holland, vice president of value-based contracting at Compassus.
The ability to demonstrate how palliative services can reduce hospitalizations and lower health care costs in the last year of life is a strategic key to navigating risk in value-based reimbursement, he stated at the NAHC FMC conference.
For instance, one hospitalization may cost roughly $15,000, and showing how palliative and hospice services can curb emergency care utilization like this is invaluable to payers, he explained. Palliative and hospice care provided during the last year of life can save the health care system about a third of that amount, or around $5,000 per patient, Holland indicated.
The potential savings is a strategic lever that palliative providers can pull when coming to the negotiating table with payers in Medicare Advantage and VBID in particular, he said.
“There’s certainly a significant delta in the overall cost of care in VBID and what that translates into is actual cost that can be lowered,” Holland said at the NAHC conference. “Done right and done collaboratively between a hospice provider and a palliative provider ideally, the list of costs can go all the way through the thick of care. The opportunity in the VBID environment is that those Medicare Advantage organizations are collecting almost all of that hospice premium being paid out. That drops the average cost of care significantly in the last year, as much as 3%, and that is very powerful, very impactful for organizations.”