Evaluating Alternate Payment Models in Hospice and Palliative Care

This article is sponsored by Netsmart. This article is based on a Hospice News discussion with Daniel Schwartz, Chief Strategy Officer at Elara Caring, Devin Woodley, VP of Managed Care Contracting and B2B Sales at VNS Health, Gavin Baumgardner, VP and National Medical Director for Complex and Palliative care at Amedisys, and Anthony Spano, Director of Client Development at Netsmart. This discussion took place on September 7, 2023 during the Hospice News ELEVATE Conference. The article below has been edited for length and clarity.

Anthony Spano: I wanted to open with a quick story. I’ve experienced this in my life and within my family, actually this week, someone getting onto hospice way too late. I’ve experienced a death in the family of a length of stay that was just under 18 days.

NHPCO reported that 50% of beneficiaries receive less than 18 days of hospice. Why are we talking about that?


Where we’re going to start this conversation is around VBID. I know there’s a lot of different controversial topics, but maybe that’s one of the answers to starting to fix that problem if we think about it a little differently. We will start there, but before we do, I wanted to give each of the panelists a moment to introduce themselves and tell us a little bit about their organization before we get started.

Devin Woodley: VNS Health is an organization that started roughly 130 years ago in New York. We’re just in the downstate market. We do have the largest hospice, largest certified home health agency, largest licensed agency in New York State, along with the behavioral health division, and a care manager organization that bridges all these different assets together.

I’ve been with the organization roughly five years. Before that, I actually came from the provider side. That’s really allowed us to leverage some of that experience in how we work with managed care plans, especially with new solutions and how we can bridge some of these programs together.


Daniel Schwartz: It’s a pleasure to be here representing Elara Caring. We are an in-home care company. We provide personal care, skilled home health, palliative care, hospice care, and behavioral health. We serve about 60,000 folks a day, 26,000 caregivers, 17 states at a couple 100 offices. I have provided home and community-based services for 35 years.

Just quickly as it relates today, we as an organization are absolutely leaning in, championing, and pushing towards value-based, outcomes-based, risk-based care that moves from the vertical thinking we’re in today to a horizontal, more longitudinal approach to providing care and services. It’s great to be able to participate in the panel.

Gavin Baumgardner: I work primarily on the Contessa side of the business. I think as many of you know, Amedisys acquired Contessa last year. Contessa has done high acuity care, relatively new to the palliative part of the business, but Amedisys has palliative that stretches over both the traditional hospice side of the business, as well as on the Contessa side. I’m an internist by training and practice for close to 25 years now in a spectrum of medicine from hospital-based care to more recently, geriatrics, hospice, and palliative care.

Spano: There’s roughly 52 Medicare Advantage plans that have a VBID offering that covers approximately 10 million American lives today. How do we create a win-win-win type of scenario within the VBID program or alternate payment models? I think Devin, starting with you and some of the work you’ve done at VNS Health, can you talk about that a little bit?

Woodley: I have the team throw together a few slides for us on VBID, just to give you a little bit of an overview of the approach we’ve taken. VNS Health actually started doing VBID three years ago. We’re actually one of the six first-round participants. Now, it’s easier for us also because what I didn’t mention earlier is we do have a health plan as well. Our health plan serves roughly 35,000 lives, that’s between Medicaid, Medicare, and dual populations. It was obviously natural for us to use this opportunity to partner our provider hospice with our health plan, and then build out the palliative care offerings in between to bring it together seamlessly.

Of course, working with Medicare Advantage, there are all kinds of issues today and, of course, most Medicare Advantages, all have Medicare Advantage plans. They currently don’t manage that end-of-life aspect. Because of that, they’re not even partnering with their commercial and their Medicaid teams who actually are doing hospice. With those silos, it’s really difficult to get through to Medicare Advantage, the benefits of end-of-life transition. It’s really left up to the referral sources to make those transitions, which again, as Anthony was saying, we’re seeing the same thing in New York State, average length of stay of roughly 17 days.

By building out these solutions, our goal was really taking one of the oldest hospices in New York with a health plan that they’re owned by, and seeing how we can seamlessly work together to make sure the members have the best experience through these transitions. We’ve built out three different steps, the first step being longitudinal care management. Currently, we’re running with members that have six-plus chronic conditions. We try to do this in a value-based space. We generally take on a cohort from a health plan. Generally take on, let’s say, 1,000 members. We try to engage as many as we possibly can.

We get paid a PMPM on the engaged members. Let’s say we engage 80%, so 800 of the 1000, we’ll get our PMPM on those 800, but we actually take on risk for the full 1,000. Those 200 unmanaged members, we’re still at risk for their total cost of care, so it highly incentivizes us to engage as many of the members as we possibly can. From there, members transition to palliative care. When the longitudinal team feels that and when the data is showing them that they’re possibly within 12 months before end-of-life, that’s when we transition to the palliative care team.

Longitudinal is managed by RNs. Palliative care is actually managed by a team of NPs, and they have a lot more NPs that do in-home assessments to trigger it, but also for ongoing visits as well. Then of course, the team of NPs, they’re the ones who are then looking and working with algorithms to determine what is the appropriate time to transition to hospice. The goal of this is the triple win. For health plans, they’re actually losing a significant amount of money in that last 12 months of life when there are a bunch of hospitalizations occurring. In New York States, the average hospitalization cost is $25,000.

You can see there’s a lot of money in the VBP opportunity when you can convince the health plan that you can have this significant impact on the total cost of care within the last 12 months of life. Then, of course, there’s the member. For me, if it was my last 12 months of life, I absolutely wouldn’t want to be bouncing in and out of a hospital. I want to be comfortable and stable in my home with my family, and still having much better member experience as well. Then for providers, there’s actually three revenue opportunities that we see. One is the longitudinal space, where we have much higher margins than we do when we’re doing, let’s say, home health.

Then there’s palliative care, which is a new offering for us. It was, again, a new revenue opportunity, but it’s also for the hospice. For us, it’s the U of reimbursement. At the very start, first week of life, that’s when your costs are very high when you’re getting all set up. Your last week of life is also very expensive due to how much services we’re offering, but it’s only in the middle where you’re actually able to generate a margin. The more you can widen that U, that’s where it’s going to help the hospice as well. This is making appropriate transitions that, again, it’s going to benefit all three parties that are involved.

Now for outcomes, here’s a few of the outcomes. This is from the longitudinal program. These are the numbers that we show the health plan because when they’re seeing these massive reductions in hospitalizations, that means massive savings for them. That’s how we get them on the hook and get them interested when we’re working on the sale. As you can see here, this is really what we’re doing. First of all, it’s having these analytical models that inform us when it’s the right time to transition from one to the next.

It’s having a very skilled outreach team, and we all do have those teams, it’s those nurses. We generally have nurses that have over 10 years of palliative or hospice experience that when they’re seeing the files, they just know as soon as they look at it, if this is someone that’s appropriate to have the conversation with or not. It’s having a hospice-friendly approach. By that, what we mean is our network of hospices are participating in VBID. They’re all getting 100% of the CMS rate. In addition, there’s actually upside in value-based for quality and outcomes as well.

They actually could potentially have higher reimbursements than what they’re getting in the current Medicare space. How all these come together for us, it really is based on all the analytics tools. It’s the technology platforms that allow us to gather data and utilize it in ways that health plans aren’t able to do themselves. For the hospice and palliative care industry, having that coupled with the ability to be in home, those are the two things that a health plan doesn’t have, and those are the two things that you can really leverage to prove your value to the health plans.

Spano: Gavin, I know we talked about the business model but I’d love to hear your perspective as a clinician. Talk about the clinical model and what VBID means for the palliative and hospice patients that we serve and their families.

Baumgardner: For me, as somebody who still sees patients very part-time, but still provides direct patient care, that’s pretty heartwarming to see. The traditional palliative model that we’re mostly familiar with is the Part B fee-for-service, and that’s where we’ve been part of that. That model can really get to the essence of palliative care and what our goals are, so improving quality of life, relieving symptom burden, having good goals of care, and advanced care planning discussions.

I think what I’m finding with the new model that we’ve introduced at Amedisys and Contessa, which is a direct-to-payer risk-based model, it allows us to provide, as you mentioned, more of the longitudinal of care to our patients, which is, I like how you put that, the widening of the U. That’s really where I think we can drive and effect some very significant change, not only for the payers, but really for the patients as well, and for their families and caregivers.

For me, I appreciate this discussion of where VBID is doing two things. One is it’s really pushing palliative to the forefront of many of our minds now. It’s been an underutilized service, I think, as we all recognized over the years, but it’s also pushing us away from the Part B fee-for-service model, more into a risk-based, value-based model.

Schwartz: Our view is we’ve been students and researchers on VBID. I’m going to use President Carter’s example earlier this morning. The absolute way we would want to think about the last one to two years of life, fabulous experience, really thoughtful quality of life, quality of care, family involvement, all of that. Sadly, President Carter’s an anomaly. I would argue that in most hospice agencies today, it would spark an internal audit from the medical director about the length of stay. In a very practical way, I think where we’re headed is absolutely the case. There’s a couple of things in the short term as you’re thinking about the VBID program.

What happens here, one, the lack of concurrent care in a traditional hospice benefit creates a little bit of a cliff in a discussion that doesn’t allow that process to start. I think that being engaged in it, recognizing it’s a fee-for-service model short-term, but that transitional concurrent element is a game changer for the end goal of being able to create a longitudinal process one or two years of life. Then I think the other is this idea of care planning and shifting it.

We went through this with my wife’s grandmother. She wasn’t interested in a care plan, she was interested in a life plan. What was it going to look like? What was the day-to-day going to look like? I think while we’re working through all the longitudinal pieces and the risk pieces for a provider out there today, get started in the process, see the value of the elements, and the hardest thing is starting.

Spano: Great perspectives around really when we talk about palliative care, and you hear all the time, it’s different if you’re in it. Palliative care isn’t palliative care in palliative care, and having the lack of a definition by CMS. We see that real-time in these conversations and those other pieces as well. I want to touch on the palliative care piece and the alternate payment models there. When you’re entering those models, and Devin we’ll start with you, one of the things that I hear is, “How do we get the payers to listen?”

Woodley: For us, of course, having our own health plan, it’s almost like we’re cheating. We always have our first customer lined up, and that just gives the opportunity to incubate these programs and hear directly from the payer exactly what they’re looking to get out of it. What we do is we generally run that for roughly a two-year period. Then we can capture the data and the outcomes from that, that proves the program’s value. Also, gives us some time to make some course corrections as well before we end up taking these offerings out to the other payers in the market.

Then once we hit the market, the first thing we do is we generally start with the local plans and the plans that are also provider-owned. Ones that may be owned by physician groups or owned by hospital systems, it tends to resonate with them better that we’re really looking for outcomes. Then, of course, we go to some of the big nationals and see how much interest they have.

Schwartz: Our experience is the same in every one of the risk-based, value-based discussions that we’re having. The payers absolutely care about palliative care. A few things are interesting. Palliative care, we were at a session last week in Futures. One of the speakers said, “Hey, I was really stressed last week and I had a drink after work. I think that meets the definition of palliative care.” [laughter] I think there are a few things. One, payers are not monolithic. There are regional payers, there are risk-bearing entities, whether that’s high REACH ACOs, physician practices, and others. Then there’s the large payers.

The large payers are the least curious because they’ve created their own models. We’re finding tremendous amounts of interest, to your point, in regional payers and risk-bearing entities. The second thing they’re saying is, “What does that mean? Help me understand what palliative care is going to mean, how you’re going to measure it.” It’s hard to be very practical about this. Then third, once those two things happen, we’re working through pilots now as an organization. It’s a relatively easy hurdle to clear who you’re talking to, exactly what it’s going to be, how you’re going to measure it. Our experience is to keep it relatively simple and the opportunity is there.

Baumgardner: I do think that Amedisys, because of its size and scope, had a little bit of an easier pathway to a large payer, direct-to-payer contract. I would say that, to your point, Daniel, they do care. They care about palliative. I think it is a bit of a challenge to understand that palliative can be a vehicle to taking full upside, downside risk, but my experience has been the payers get it, they understand that those last couple of years of life as people have articulated already. Today, that’s where the real avoidable expense comes. It’s something that we feel we’re very well positioned to try to modify, alleviate some of that burden and the avoidable risk.

Spano: For a lot of the audience, when you think about, from the business side, how do hospices win, whether it’d be through alliance, through mergers and acquisitions. I wanted to ask the panelists if you guys have any insight on if you’re a group that’s looking to get into these and you’re looking for scale, how have you seen other organizations start to tackle that? Actually, do you want to take this one Daniel?

Schwartz: I think we’re in an innovative laboratory pilot phase today. The whole concept of scale is a little bit overdone. We’re in the proof of concept phase. Our approach has been manageable pilots, demonstrate concept, work through the scalability from there. I think that addresses a piece of the question. I think the other is what do we do and where do we partner? Primary care is a key element in the delivery of palliative care. We don’t own large groups of primary care physicians. That doesn’t have to be the only way to go about doing it, there’s an opportunity to partner.

We bring thousands of passionate clinicians to the face-to-face element of the program, and that’s a piece that’s missing at the NP level typically or at the primary care level typically. Then the third piece, I would say is the technology side of it. We’re not trying to be great at everything. There are folks that are really good on the technology side. Our approach has been partnering, and then proof of concept.

Spano: I think with that in mind and when you think about what is next to come, one of the things that I wanted to highlight, what’s your perception on how behavioral health influences some of these models that we’re talking about?

Woodley: For us, I think behavioral is something that we’ve really worked on trying to integrate into all of our conventional models. It has been siloed even in our organization up until essentially now. We’re just now trying to get behavioral health onto platforms that will speak to the same platforms as the care management team so that they can be truly integrated. Then that will do the same with our offerings.

Right now, some of the programs that you saw there, we do have a full offering of care management programs. That moves along the continuum. We have the same thing for behavioral health, but right now, they’re totally different tracks. We’re all trying to figure how we can wrap these in together and wrap-around the members into a more holistic approach.

Spano: I think that’s an important part. CMS, it’s clear in the data if you have somebody with chronic disease and untreated behavioral health, it significantly increases the cost to the member.

Baumgardner: One of our joint venture partners that we share a palliative care at-home program has a very large behavioral health population. As I listen on their IDTs, as I listen on their operations meetings, it’s just a different set of support resources that that population needs than maybe our Tennessee risk-based direct-to-payer group might need that does not have as much of a burden.

It’ll be interesting to see. I think none of us know quite yet what the GUIDE model in that program is going to look like. There’s going to be a component of behavioral health embedded in that as well, just with the management of an advanced dementia population. We may be integrating some of those resources back into those types of traditional palliative programs, but it is different, no doubt about it.

Spano: That’s a good point. The GUIDE program, and we talked about this as a panel, it’s new. There’s a lot to be still, I suppose, discovered or drawn out related to it. I do want to ask if there’s perspective from the panel on do you envision that as a way to both start to change the paradigm of palliative as a Part B reimbursed for the masses? Is that a segment where we start? Why are we globally trapped in this Part B type of methodology, that’s the only way to get reimbursed for care?

Schwartz: I don’t think we’re necessarily trapped, I challenge the question a little bit. Historically, palliative has been thought of narrowly on a fee-for-service basis. I think it was relatively easy to do that. Candidly, it’s still in its infancy. 10% of the palliative providers are community-based providers. None of them have figured out an economic model necessarily to make it work. I think some of it is just where the least resistance was, so that model existed and worked with it. There’s enough experience now to know that it’s difficult to make an economic model work. Then the last thing I would say is that the whole world of risk and longitudinal care is just developing.

You tried to have this conversation three years ago, two years ago, maybe five years ago, no one knows who you’re talking about. A couple of years ago, they’re interested, but there are other things people are focused on. I think it’s just evolving as the whole construct of risk-based care evolves, the construct of longitudinal risk-based palliative care develops. I think it’s more of an evolution than this is the only model. I think if we sit here a year from now, at this same session, there’s got to be risk-based models that are going to be much more prevalent two years from now, three to two years from now, and so on.

Spano: I think that’s a great answer, and it leads us into what does that five-year future look like? That’s something that I’d love to hear some perspective from the panel on.

Woodley: What I would like it to look like is something that the providers have had a lot of influence in creating what that is. It’s not leaving up to managed care where it sits with managed care. They develop what they think they’re trying to get, what levers they’re going to pull financially to make it work for them, but for providers to really take a foot forward and have a heavy influence on what that’s going to look like, as Gavin’s saying, especially from a clinical perspective. We’re the ones that have the clinicians in the home. We’re working hands-on seeing what that experience is going to be.

It’s also being able to leverage platforms and data to be able to provide the health plans with information that they don’t have because they haven’t been managing this benefit versus the providers who have been doing hospice all this time. You have the data that the health plans don’t have at this point. How can you leverage that to tell the story and to make sure this model’s going to be something that’s going to work for everybody?

Baumgardner: For me, I think you’re just going to see more, and I think you put it well, experimentation, pilots. It’s a bit of a laboratory right now. We are going to need some time. We’re eight months into our most recent direct-to-payer contract. I can’t tell you right now if we’re winning or losing for sure. Based on some leading metrics, I can tell you we’re winning, but the ultimate lagging metrics TBD, but it is going to take some time to fine-tune the model. What I think you’ll start to see, and I’m going to use the U analogy, widening that.

We’re thinking right now at Contessa about how to integrate the hospital-at-home model into this full upside, full downside risk-based model as well to really accelerate some of those cost savings. We firmly believe a hospital-at-home model, SNF-at-home model is effective and sustainable in many ways, but where you really accelerate that growth maybe is by integrating that into the other like a palliative care at-home model. I think you’ll see more of that integration over time. It only makes sense.

Spano: Do you think that for groups that are, I would say traditional home health, or hospice, or palliative care at a hospital, at home, do you see a world where there’s partnerships there? Can you maybe double-click on that?

Baumgardner: I do. I think to scale up some of these models is going to be a challenge. To take on that financial risk on a scalable model, both from just a financial standpoint as well as being able to serve geographies that are pretty vast, that is a unique challenge that we’re struggling with right now, and how we integrate different technologies from our high acuity side of the business into taking care of some pretty remote patients, for example, in Tennessee. I do see partnership being the way. I think it would be hard to build those programs from the ground up.

I don’t know that it makes a ton of sense, but there’s a handful of those types of programs, I think, to partner with that are going to be, I think, highly effective over time. I think from a model standpoint, I can just tell you from a Contessa standpoint, we want that growth, we want that diversity. The joint venture model we have right now is not going to be how it looks in three to five years.

Schwartz: Only piece I would add is this, I think there’s going to be two camps out there. There are large groups that are going to structure models and programs, be able to scale, take the risk, and build the infrastructure. The same challenges we have today, we’re going to have five years from now, and they’re going to only get worse, which is access. The combination of, there’s two roles to play in this movie. One is leading and structuring the model, the other is being a contributor to that model. There’s going to be an opportunity for both. I think the challenge is going to be figuring out as an organization, which role you’re taking and which one makes sense, but there’s going to be an opportunity for both.

Spano: I think we’ll land here with a final thought that I’d like to post to each of the panelists for a brief answer is if sitting in the shoes of a hospice or a palliative care provider today and you’re looking to get started or you’re in the early phases, what’s the first step? If you could give any advice and talk to yourself as you were getting started, what would you say you would give advice back to yourself as the first step if you’re trying to really dive into these pieces?

Woodley: For me, I’d say, my team, we actually do everything from selling palliative care all the way through to selling VBID to health plans. I’d say a lot of time, even when we’re having those VBID conversations, a lot of time it ends up coming all the way back to palliative care. I would say it’s starting with palliative care and looking into what could a palliative care management wrap-around, how could that look, and how can you partner potentially with other providers? We’re talking about things like behavioral health. If you don’t have these assets yourself, are there others that you can work with to try to bring some of these offerings, something more holistic to the table?

Schwartz: I guess I would say start.

Spano: Start.

Schwartz: Just start. I have a very good mentor, who just looked at me years ago and said, just start by starting. Baby steps, experimentation, get over the fear. None of us really know how this is all going to play out over time, so just start.

Baumgardner: When you first asked the question I was, and somebody had said it earlier, you just got to get started. I would say one good first step is get a good data science and analytics team and really understand your data. That is to me, a core principle before you even start exploring payer contracts and the like, is to really understand your data. To me, that’s a really good first step. Then I think we’re entering this era of collaboration.

We’re going to, hopefully, continue these conversations because, as you mentioned, nobody has the right answer right now. I think we’re going to learn a lot over the next couple of years here with data being published and as we all learn a little bit more about what’s most effective about these programs and how do you really supercharge, as somebody put earlier, the core principles that we’re all looking to build upon.

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