The impending demise of the hospice component of U.S. Centers for Medicare & Medicaid Services’ value-based insurance design (VBID) model has largely been met with a sense of relief by providers as they plan new initiatives for palliative care in 2025.

Launched in 2017 by the Center for Medicare and Medicaid Innovation (CMMI), the VBID demonstration tested new approaches to reimbursement across a variety of health care settings. This included the addition of the hospice component in 2021, which was designed to test coverage of those services through Medicare Advantage.

CMMI extended the program through 2030, but recently announced that the hospice portion will end on December 31, 2024. A statement by CMS said increasing operational challenges, and limited and decreasing participation among Medicare Advantage Organizations (MAOs) led to the decision.

The program, which initially contained promising components designed to give patients better access to palliative care, instead became an increasing source of frustration for organizations.

“Providers expected to see a significant uptick in patients referred to their organization, however that did not manifest,” said Rory Farrand, vice president of palliative and advanced medicine at the National Hospice and Palliative Care Organization (NHPCO).

VBID breakdown

Many providers believed the inclusion of palliative care under VBID would allow for a serious illness population health management program within Medicare Advantage. 

The expectation was that care providers would have “the ability to manage total cost of care while delivering high-quality results in a risk-based arrangement,” Farrand told Palliative Care News. “The inclusion of palliative care was also thought to ease the transition to hospice by reducing burdensome transitions (such as preventing acute hospitalizations) and leading to early and increased enrollment in hospice as appropriate.”

Unfortunately, the lack of definition for the palliative care component led to a consistency issue across the demonstration, according to Mollie Gurian, vice president of Home-Based and HCBS Policy at LeadingAge. That problem was mirrored in the environment outside of the program. 

“Some plans offered telephonic-based palliative care and others offered a full interdisciplinary team with in-person visits,” Gurian told Palliative Care News. “The reimbursement was completely based on negotiations between plans and providers – so it varied from plan to plan.”

With the eligibility, scope, care delivery structure and reimbursement determined by each payer or participating plan, palliative care under VBID became a real challenge. 

“A lack of standardized requirements from CMS led to considerable differences between participating MAOs,” Farrand said. “To include palliative care, CMS required a separate payment for the delivery of these services, but providers reported difficulty contracting to be included in the payer’s network. The process of negotiating reimbursement was often unfavorable to providers, with rates lower than fee-for-service Medicare at times.”

Data drop

Farrand added that the algorithms used by plans were too opaque and said many patients were called without receiving context for why they were being contacted. This resulted in poor conversion numbers for patients.

Issues persisted related to the validity of lists of referred patients, which were often outdated, included deceased members and required significant clean up, Farrand said. Providers also reported significant administrative burdens — manual data entry, manual letter processes, prolonged outreach processes with low conversions, many mandatory reports requiring delivery at various intervals, demanding data analytics and significant data upkeep in patient charts.

Ultimately, both Farrand and Gurian said that organizations provided palliative care to a very low number of patients through the hospice benefit component of VBID. The latest evaluation report on the program, using 2022 data, showed 2,596 beneficiaries had received palliative care through the hospice benefit component of VBID, which was lower than expected.

Along with the small number, Farrand said the data collected does not clarify the types of services delivered by providers, the length of time care was delivered, or what specific diagnoses or conditions were managed.

“The plans indicated they had trouble tracking and reporting palliative care, which means that there may have been underreporting,” Guran said. “There was no uniform definition of palliative care, so comparing what each of these 2,500 beneficiaries received for the purposes of evaluation has been incredibly challenging.”

Transitional effects

With the end date for the hospice component of the VBID model approaching, many palliative care providers are left with concern for their patients and questions about the coming transition, as they shift focus to what happens next.

“Our members do want to be sure that those that are in the demonstration for CY2024 have smooth transitions, and we will work with CMMI on policies to ensure that happens,” Gurian said.

Farrand said she expects additional guidance from CMS on the sunsetting of VBID to help ensure continuity of services and to mitigate negative impacts for patients currently receiving palliative care.

Both Farrand and Gurian said providers will look for alternative avenues of reimbursement, such supplemental benefit dollars, contracts to offer advanced illness care in value-based arrangements and other CMS models to continue palliative care services next year and beyond.

“While most palliative care providers are not directly receiving beneficiary attribution, by pursuing partnerships with primary care or geriatric providers to supplement the care they will be delivering, they may be able to reach additional patients who need services as well as participate in shared savings based on achieving quality outcomes,” Farrand said.

Gurian said LeadingAge members have found some of the hospice specific supplemental benefits worthwhile, like in-home respite care and access to meals for patients and families, so the organization is advocating for the inclusion of in-home respite in traditional Medicare.

“Transitional concurrent care also had really low utilization in this [VBID] model, but concurrent care in the Medicare Care Choices Model was found to have promising results,” Gurian said. “So, this is another area we are looking to expand in the traditional Medicare program.”

Gurian is also optimistic that plans can still pay for palliative care services through other avenues.

“There is a lot of interest in expanding the offering of palliative care in state Medicaid programs,” she stated. “Which is the most advantageous depends on the hospice’s market and the payers available to them – and what the mix of services a hospice is offering. There still needs to be some standardization of services that constitute palliative care. But hospices probably need to pursue a mix of all of these payment streams.”