Hospices Welcome VBID’s Demise, But Questions Remain

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The Medicare Advantage hospice carve-in will be carved back out by the end of this year. Many operators were glad to see it go, but the questions the demo sought to answer still linger.

Citing “operational challenges,” the U.S. Centers for Medicare & Medicaid Services (CMS) announced yesterday that it would bring to a close the hospice component of the value-based insurance design (VBID) demonstration, effective Dec. 31.


Among other goals, the program was designed to test coverage of hospice care through Medicare Advantage, as well as the delivery of palliative care and transitional care.

Hospice News spoke with leaders of hospice organizations, industry groups and other stakeholders to gauge providers’ perceptions of the CMS decision. Most welcomed the news, though some recognized that problems exist in the space that require solutions.

Responses are below, edited for length and clarity.


I applaud the decision to suspend the hospice component of VBID. Certainly the underlying premise of including hospice care in [Medicare Advantage Organizatrion’s (MAO)] benefit package in order to streamline beneficiary experience has merit. However, the demonstration’s design – or perhaps lack of enough design – did not portend a strong future for hospice care.

I represented Agrace at one of the gatherings [the Center for Medicare & Medicaid Innovation (CMMI)] held during the demonstration’s design phase. A key element of its original intent did not pan out – increasing hospice utilization by encouraging MAOs to experiment with offering tangential services like palliative care, concurrent care, and supplemental benefits. A fraction of beneficiaries received any of these “extras.” However, hospices, in many instances, had to accept lower reimbursement rates and delayed payment for the care they delivered.

My sincere hope is that the lessons learned from this demonstration lead CMMI to design a more robust approach that lays out safeguards for maintaining all that is good about the existing hospice benefit, eliminates the added administrative burden, and establishes clear definitions of things like palliative care, transitional care, and supplemental benefits.

— Lynne Sexten, president and CEO, Agrace, a nonprofit provider


A valuable component of the health care continuum, hospice includes a complex care model covering not only the patient (member) but also the family for an extended period of time. This is very different from a traditional health care service covered by commercial insurance, as evidenced by the guard rails that were put in place through VBID.

We are pleased that patients and families will be able to continue receiving care under the current reimbursement model for the foreseeable future.

– St. Croix Hospice Founder and CEO Heath Bartness


We’re very encouraged by CMMI’s recent announcement regarding the hospice-specific aspect of the VBID demonstration project. Their decision to cease the demonstration, based upon the operational challenges faced by participating providers and declining participation by MAOs, reflects their continued commitment to listening to stakeholders and focusing only on demonstrations that appear to be achieving their original intentions.

We look forward to continuing to work with CMMI and other governmental stakeholders to determine alternative ways to drive further awareness of and access to hospice and palliative care across the country.

– Nick Westfall, chairman and CEO, VITAS Healthcare, a subsidiary of Chemed (NYSE: CHE)


The MA hospice carve-in lacked the infrastructure and quality measures to effectively manage hospice within the VBID construct and therefore struggled to deliver on the objectives of administering end-of-life care, improving care coordination and supporting timely access to hospice. Some participating plans had certain levels of success – and we have been proud to partner with a number of organizations that used the VBID demonstration effort to find innovative ways to support end-of-life care.

We were hopeful that the program could broaden hospice access for MA populations and accept that this will not be the outcome. Notwithstanding, the benefit is highly successful under original Medicare in delivering compassionate end-of-life care for patients and families.

– David Grams, CEO, Compassus


Once participation among the MAO’s began to decline, the opportunity for CMS to make a common-sense decision became a reality, and that should be applauded. The hospice benefit is a wonderful program and any limitation to access would be detrimental to how far the industry has come. There is still much work to be done and the decision today provides a boost to continue leaning in.

– Alex Mauricio, CEO, Bristol Hospice


This is a huge victory for patients’ access to quality care and for hospice providers who have continually identified challenges with this demonstration including concerns about VBID giving [Medicare Advantage Organizations (MAOs)] the ability to limit patient choices.

The [National Hospice and Palliative Care Organization (NHPCO)] has advocated for years to end the VBID hospice carve-in and appreciate CMS making this important change. We saw great success with concurrent care tested through the Medicare Care Choices Model (MCCM) and would encourage CMMI to consider these learnings as a potential path forward.

– Ben Marcantonio, COO and interim CEO of NHPCO, in a statement


While we remain supportive of CMMI’s efforts to facilitate innovation, the termination of the VBID model and its varied outcomes demonstrate the potentially detrimental consequences of a carve-in that fails to fully consider the implications for non-profit, mission-driven providers, patients, and their families.

While the demonstration may be concluding, our commitment to innovation remains unwavering. We will continue our efforts to modernize the Medicare hospice benefit, empower our members with the knowledge needed to collaborate effectively with value-based payers, and foster open dialogue among like-minded organizations focused on pathways for future success.

– The National Partnership for Healthcare and Hospice Innovation (NPHI), in a statement


I applaud CMS for listening to consumers, providers and plans and ending the hospice carve-in. To providers, I would say: your sigh should be a mix of relief and disappointment. The status quo is still broken: long lengths of stay, live discharges, second-guessing by government contractors are all a part of your everyday life. I hope that what comes out of this demo is a more durable path for concurrent care and a real palliative care benefit.

— Edo Banach, partner, Manatt, Phelps & Phillips, LLP.


LeadingAge recognizes all of the effort undertaken by CMMI, participating Medicare Advantage Organizations, and hospices, including our nonprofit, mission-driven members, on the Hospice VBID program demonstration. We applaud CMMI for its clear-eyed assessment of the work to date and deciding to not continue in the face of administrative challenges and without sufficient volume to run a robust demonstration.

That said, the demonstration’s goal – to ensure a seamless experience for people at the end of life regardless of payer – continues even with the project’s end. We’re continuing robust advocacy efforts regarding improvements to Medicare Advantage and hope to see our recommendations for improving MA fully implemented before any plans to carve hospice into Medicare Advantage are further contemplated. LeadingAge’s hospice benefit reform agenda contains elements that this demonstration included: transitional concurrent care and the ability to offer home respite (done in the demo via supplemental benefits).

Mollie Gurian, VP, Home-Based and HCBS Public Policy, LeadingAge


We are grateful that CMMI listened to the provider community on our concerns about MAOs limiting patient access and squeezing programs, especially legacy community-based ones like ours.

However, innovation remains vitally important. I believe what we’ve learned from the demonstration can spur innovation in other ways such as changes in concurrent care, palliative care payments, innovations around quality and access, and spurring organizations to elongate their continuum, as Blue Ridge has done with our PACE program, for example.”

Jason Parsons, CEO, Blue Ridge Hospice


We are pleased to see that they made the decision to wind the carve-in down at the end of this year. The [National Association for Home Care & Hospice (NAHC)] has been pretty consistent in its unqualified opposition to the carve-in since it was first announced. We’ve always felt like it was a solution in search of a problem.

The overarching goals of the demo are really important to improve care continuity and increase access to high-quality hospice care. So I think, yes, absolutely. There are still important questions and areas that are in the hospice world that we all, as a community, need to address.

Decreasing the fragmentation, very short stays that really frustrate the ability to fully benefit from the care model.

Davis Baird, director for government affairs for hospice, NAHC


Regardless of whether it’s VBID or value-based reimbursement models of many types, we know the hospice benefit and related value proposition is changing in the eyes of payers, referral partners and policy makers.

Hospice industry leaders, alongside our national associations can take this VBID announcement as a time to pause and double down on the need for more conversations, communication, education, and collaboration on how best to serve the core needs of those we all serve – specifically patients and families facing serious illness and end of life.

— Jonathan Fleece, CEO, Empath Health


We have been supportive of testing the hospice carve-in prior to a final recommendation. We are cautious to place judgement on this decision without further understanding what replaces VBID to fully evaluate the ramifications of a total hospice carve-in. We believe a measured approach to determine the full impact of a total carve-in of the hospice benefit must be further studied, unless CMMI has concluded a carve-in is not in the best interest of beneficiaries.

At this point, we are not supportive of the carve-in as we have not seen improvement in access or benefits to model participants. Further, adding a middleman in the payment system creates barriers to access when length of stay is already so short for most Medicare beneficiaries. After three years of participation in the VBID hospice carve-in model, our experience does not support a carve-in of the hospice benefit.

— David Cook, CEO, Hosparus Health

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