Many believe that the fee-for-service model does not sufficiently support a robust palliative care program, meaning that providers must turn to value-based systems for sustainable reimbursement.

But primarily, Medicare still reimburses for palliative care through fee-for-service payment programs that cover physician and licensed independent practitioner services. That model does not sufficiently cover the full range of interdisciplinary care, Dr. Julia Frydman, palliative care medical director at Thyme Care, said at the Home Health Care News Cap+Strat Conference.

“There’s tremendous value to patients and also tremendous economic value in palliative care. The question is how do you align incentives properly. In traditional fee-for-service systems, palliative care is not being reimbursed at a rate where often you can deliver the services that you need to meet patient and caregiver needs,” Frydman said. “In fee-for-service, the palliative care program itself from the fees it’s charging is not supporting itself sustainably. There is really significant promise for palliative care integration in value-based care models.”

Currently, palliative care providers have a few avenues into value-based care.

The U.S. Centers for Medicare & Medicaid Services (CMS) also allows Medicare Advantage plans to cover palliative care as a supplemental benefit. In addition, the agency has integrated palliative care components into the hospice component of the Value-Based Insurance Design Model (VBID), often called the Medicare Advantage hospice carve-in. However, that program is slated to end on Dec. 31.

Some Accountable Care Organizations (ACOs) also offer reimbursement models that better support the full spectrum of interdisciplinary palliative care than traditional fee-for-service programs. ACOs and providers are able to create customized payment arrangements based on outcomes, often with shared savings components.

A contingent of providers for example are providing palliative care services for ACOs in the high-needs track of the ACO Realizing Equity, Access and Community Health demonstration (ACO REACH).

A number of other emerging models clearly incorporate palliative care principles without actually using the term, such as the Guiding an Improved Dementia Experience (GUIDE) program and the Kidney Care Choices demonstration. Palliative care providers have opportunities to partner with participating organizations to help improve patients’ quality of life and generate cost savings.

“The economic value of palliative care is tremendous. We have far too much evidence right now showing that hospitalizations are reduced 40% to 50%, that emergency visits are practically decimated,” Allison Silvers, chief health care transformation officer at the Center to Advance Palliative Care (CAPC), said at Cap+Strat. “Even for hospices, length of stay is increased dramatically when there’s a palliative care referral. The appropriateness of hospice is made apparent to patients and families.”

A range of factors is driving these changes. One is the movement of more health care into the home setting, a trend that was accelerated by the pandemic. That, coupled with an overarching need to control costs by reducing avoidable hospitalizations, has spurred more stakeholders to take a closer look at palliative care.

Case in point, the palliative care framework utilized within the Center for Medicare & Medicaid Innovation’s (CMMI) Medicare Care Choices Model (MCCM) reduced total Medicare spending among beneficiaries served by 14%, with total savings per patient reaching $7,254, according to a recent evaluation of the program. Palliative care also decreased ED visits by 14% and inpatient admissions by 26% while boosting hospice enrollment by 29%.

But business trends are also driving change. As the value of palliative care becomes more apparent, investment in the space is rising. This influx of capital is driving more providers to expand their palliative care programs.

“In a value-based care model where you have a risk-bearing entity that is investing upfront in a robust palliative care program and following that patient to the end of their disease trajectory, they’re going to see the cost savings as well, and the improvement in the patient and caregiver experience,” Frydman said. “It is more viable to implement robust palliative care programs. From an investment perspective — if you are assessing a prospective entity and they have a serious illness population with palliative care needs, and they do not have a plan for a palliative care — program that should raise significant concern.”