‘Long-Term Business Viability’ a Top Driver of Hospice VBID Participation

Providers see sustainability and expanded service growth as main draws to participating in the Medicare Advantage hospice carve-in. However, these opportunities come alongside administrative and billing challenges, among others.

Hospice participation in the value-based insurance design (VBID) model has been slowly increasing over the past two years, a trend anticipated to continue as more providers see growth potential and service diversification opportunities within the value-based payment landscape, Julia Driessen, economist at the Center for Medicare and Medicaid Innovation (CMMI) said in a U.S. Centers for Medicare & Medicaid Services (CMS) recent webinar.

A main factor piquing providers’ interest in VBID is the ability to diversify services to reach patients upstream amid rising demand, Driessen said during a recent CMS webinar.


“The main takeaway at this point we’re seeing is that participation grows overall, but also seeing that the utilization of the components services remains somewhat low as it was in 2021,” Driessen said. “On the hospice side, we conducted interviews of both in- and out-of-network hospices in VBID. The primary reason hospice chose to join networks was related to long-term business viability, as well as interest in increasing the care options they provide at the end of life, particularly through offering services like transitional concurrent care.”

Hospice utilization in VBID

CMS launched the carve-in at the beginning of 2021, and last month issued results of the RAND Corp.’s analysis of the VBID demonstration’s first two years. The company analyzed results of the program that spanned patient data through the calendar year of 2022.

Overall, hospice utilization in the VBID model has been lower than expected, Driessen indicated. A little more than half of the hospices participating in the VBID model were new to the program in 2022, she stated. Roughly 1,168 hospices provided care to at least one VBID beneficiary that year, with 908 providers out-of-network and 206 that were in-network, Driessen said.


“With the combination of that early sign of a learning curve on both the plan and hospice side of the house, I think that remains something we’re continuing to keep an eye on to see how that translates moving forward, as well as that initial indication of an association with an improvement in [Consumer Assessment of Healthcare Providers and Systems (CAHPS)] experiences,” Driessen said.

Hospices participating in VBID were more likely to be part of a larger organization or network of providers, Driessen added.

A growing number of nonprofit hospices are forming partnerships or entering affiliations to better position themselves for payer negotiations within Medicare Advantage. Nonprofit hospice affiliations surged in 2022 and 2023. This is in addition to the creation of several regional collaborative networks and the formation of new Accountable Care Organizations (ACOs).

Common hospice challenges in VBID

A common challenge voiced by providers thus far in the VBID realm has centered around a lack of clarity around patient eligibility criteria for palliative and transitional concurrent care (TCC), according to Driessen.

The RAND Corp. report indicated that hospices reported significant hurdles around administrative and billing processes, she added

Hospice participants have encountered challenges related to payers’ denial of billing claims, indicating that responding to these denials can be time consuming and resource intensive. Providers have also found that payments from Medicare Advantage plans were often delayed, leading to financial pressures.

“In many cases, the challenges of new and returning hospices to the model were similar to last year, such as administrative processes, claims submissions and identifying for TCC and hospice supplemental benefits,” Driessen said. “But we saw that challenges were different or diminished for hospices that were in the second year of providing care under the model.”

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