As value-based reimbursement expands, palliative care will become increasingly important when it comes to improving outcomes and reducing costs.
Primarily, Medicare reimburses for palliative care through fee-for-service payment programs that cover physician and licensed independent practitioner services. However, this model is not designed to fully support an interdisciplinary approach involving physicians, nurses, social workers, chaplains and other professionals, making sustainability a challenge.
However, the profile of palliative care will likely rise in coming years as the health care system evolves towards outcomes-based payment with an emphasis on cost savings. Already, a growing range of health care providers are investing in those services, including hospices, home health agencies, health systems, primary care and other providers.
“Providers in the past seven years have built more palliative care programs than I can count, and they’re really looking at where and how we engage, even [in] home health,” Chris Morrisette, CEO of CareAlly, said at the Hospice News Elevate Conference. “All of those are factors that are top of mind and a part of the future landscape of how we engage what we’ll call our post-acute assets — home health, hospice palliative care — into this future evolution of value-based care.”
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).
Providers engaged in risk-based payment models are likely to capitalize on the cost-savings potential of palliative care, or the similar concept of concurrent hospice and curative services, according to Matt Schultz, partner at the private equity firm The Vistria Group.
“As you think about the different models within hospice and within palliative care, and how you can drive value and opportunity into the post acute environment, we tend to think concurrent care with hospice is something that’s really valuable and is going to become more and more prevalent,” Schultz said at Elevate. “So how you mix in curative care, personal care services, all the other services, there’s enough literature and research out there showing that there’s actual value-add from a cost savings perspective, as well as the quality of care for the patient. I think the real driver of those in the current market are the risk-bearing provider groups.”

One example of this concept in action is the Medicare Care Choices Model (MCCM) payment demonstration by the Center for Medicare & Medicaid Innovation (CMMI).
The concurrent-palliative care framework utilized within MCCM reduced total Medicare spending among beneficiaries served by 14%, with total savings per patient reaching $7,254, according to a CMS evaluation of the program.
Palliative care also decreased emergency department visits by 14% and inpatient admissions by 26% while boosting hospice enrollment by 29%.
Post-acute care provider Alivia Care participated in the demo for six years and was one of the three programs that admitted a majority of the participating patients, according to CEO Susan Ponder-Stansel.
“It really is true that if you can begin to bridge with some services, that we did see cancer patients who elected to hospice at a higher percentage than those who did not have Medicare Care Choices, and longer lengths of stay, great improvement in oncology, mild improvement in cardiology and pulmonology,” Ponder-Stansel said at Elevate. “Part of the thinking was that: the further upstream you can get as someone begins to encounter an illness that will eventually take their lives, but along the way, will involve a lot of interactions that may or may not improve their care and will involve a lot of mental and physical suffering. Hospice has a unique skill set, and those things are exactly what the value-based system and the health care system is looking for and trying to recreate.”