The varied routes of palliative care payment trends taking shape in today’s reimbursement landscape could have significant effects on the future outlook of sustainability and access to these services.
Palliative care providers need a strong understanding around the insights gained from the current mix of payment models evolving in their space, according to Brynn Bowman, CEO of the Center to Advance Palliative Care (CAPC).
“It’s important to help palliative care teams understand how to leverage payments that didn’t exist before for the work that they’re doing and just haven’t been reimbursed for historically,” Bowman told Palliative Care News. “Knowing the requirements [helps] so they’re not leaving money on the table for doing what’s really important for patients and being able to navigate the health system with that added layer of support.”
Gaining ground in value-based payment
Palliative care components have gained ground across the value-based reimbursement arena in recent years, Bowman indicated. Palliative services that address patients’ social needs, manage their pain and symptoms and provide caregiver support have increasingly become “critical aspects” of value-based payment demonstrations coming out of the Center for Medicare and Medicaid Innovation (CMMI), she said.
Among the recent CMMI demonstrations with palliative payment potential is the Kidney Care Choices (KCC) Model, which began January 1, 2022 and is set to sunset December 31, 2026. The KCC model includes waivers that allow patients to receive kidney dialysis treatments and transplant services concurrently with palliative care.
Th KCC demonstration period thus far has found increased utilization of dialysis in the home and has fostered greater clinician training in addressing related conditions, reported the U.S. Centers for Medicare & Medicaid Services (CMS).
Also playing a role in palliative care is the Medicare Shared Savings Program (MSSP), established through the Affordable Care Act. Through the MSSP model, palliative care providers can form collaborative partnerships with participating Accountable Care Organizations (ACOs) and receive a portion of the cost savings generated from these collaborations.
The MSSP has recently yielded historic results in reduced health care spending more than a decade after its launch, leading to a total net savings of $2.1 million in 2023, CMS reported.
The results unveiled from these and other value-based reimbursement models have increasingly pointed to the quality and cost savings associated with palliative care delivery, signaling that more demonstrations may be on the horizon that include these services, Bowman stated.
“We have a plethora of data that palliative care drives high-value care for the patients whose needs are most complex, and that means that palliative care teams have a role to play in new value-based models coming out of CMMI,” Bowman said. “We’ve seen significant signals from CMS that they’re focused on care needs for higher-complexity or sicker Medicare beneficiaries, and focused on the comprehensive care needs of patients with serious illness. We can hope that trend continues in the coming years.”
Payment issues in Medicare FFS
Fee-for-service Medicare continues to pay for the bulk of palliative care delivered to seniors in the United States, using the rates established in the physician fee schedule. But the reimbursement does not sufficiently cover the full scope of interdisciplinary palliative care.
The needle moved forward with the 2023 physician fee schedule rule, which included new coding and payment for family caregiver training and allowed for reimbursement for services that address social determinants, among other topics. The 2025 final rule stipulated that caregiving education can be done via telehealth or in person.
The rule also permanently added several items to Medicare’s Telehealth Services List, which governs the types of care that can be delivered virtually. These include caregiver training services, PrEP counseling for HIV prevention and safety planning interventions, as well as allowing audio-only communications for physician telehealth visits if a patient is not capable of or does not consent to using video technology.
CMS also finalized a nearly 2.9% cut for 2025 in physician payment rates used to reimburse palliative care care practitioners, among other professionals.
Navigating changes to the physician fee schedule can be a challenging feat for palliative care providers, according to Tiffany Hughes, CMO and nurse practitioner at PalliCare Inc.
“One challenge is that most of what we do is tied to the physician fee schedule, and it has changed significantly every year,” Hughes told Palliative Care News. “We spend a lot of time building out operations and workflows, [then] everything changes and that’s challenging to keep up with. There’s always little nuggets of surprises, deleted codes and all of these other things going on.”
While palliative care programs continue to struggle under the margin pressures of Medicare Advantage, for patients on traditional Medicare these new codes were “a major step in the right direction,” Bowman said. Adoption of the new coding has been slow over the last two years, with providers needing to “lean in” to utilization more heavily in order to provide data that illustrates the impacts of their services, she stated.
Palliative care providers face several obstacles in the current Medicare reimbursement realm, said PalliCare COO Shayla Rowley. Among the issues are requirements that some payer sources such as Health Maintenance Organization (HMO) plans, require prior authorizations for palliative care services, which can pose barriers for patients in these networks, Rowley stated.
“There is a need for palliative care, but we’re getting a little kickback from payer sources, mainly in the commercial [insurance] area. That’s a big picture issue,” Rowley said. “We have unknown telehealth territory that we’re stepping into this year, and also changes to chronic care management service bundles that we’re watching. We always have a barrier waiting to see whether a patient goes to an MA plan or with a different payer source.”
Palliative care’s momentum in Medicaid programs
Some states have made changes to their Medicaid programs in 2024 when it comes to palliative care services.
CMS in June approved a State Plan Amendment (SPA) for Hawaii that paved the way for palliative care coverage through Medicaid. Hawaii became the first state to request SPA approval, which defines palliative care as a preventive service, establishes a payment methodology and sets quality reporting standards.
Palliative care coverage has also been growing in other states, such as in California’s Medicaid program Medi-Cal. The program in 2010 covered four patient diagnoses for palliative care plans: cancer, congestive heart failure, chronic obstructive pulmonary disease and end-stage liver disease. Medi-Cal has since expanded to cover 10 diagnostic categories in response to swelling patient demand and provider concerns. The growth has sparked some palliative providers in the state to pilot new programs dedicated to enhancing patient outcomes and reducing costs.
Programs such as those developed in California and Hawaii help to create a template for other states as they work through the process of determining parameters for their own palliative care benefits, according to Stacie Sinclair, associate director of policy and care transformation at CAPC.
More states may “follow suit” in coming years as the results of these new programs unfold, Sinclair stated. The new reimbursement pathways allow for an opportunity to examine the impact of palliative care services and collect data on Medicaid beneficiary outcomes.
Policymakers are able to dig into the “lessons learned” from the elements integrated into other state palliative payment mechanisms to establish programs that best support their patient population’s needs, Sinclair said.
An estimated 13 states have established some type legislation requiring payment for palliative care, according to CAPC’s Serious Illness Scorecard. These reimbursement avenues have included the development of Medicaid benefits for interdisciplinary, community-based palliative care, as well as establishing mandates for Medicaid managed care organizations and requirements for commercial insurers.
State-level reimbursement streams have the potential to make measurable differences in outcomes, according to Sinclair.
Recognition is growing around the potential for palliative care services to improve quality among seriously ill populations, Sinclair stated. However, progress could be slow, as much consideration goes into designing reimbursement structures, she added.
“States have taken notice that palliative care can meaningfully improve quality of life for Medicaid beneficiaries living with serious illness while simultaneously delivering value,” Sinclair told Palliative Care News in an email. “We have seen several other states — many of which have spent years developing their own infrastructure to support palliative care delivery — taking steps to create payment mechanisms that can better support interdisciplinary care across settings and patient populations.”
CMS has made other moves this year to widen coverage of certain pediatric palliative care services and tribal health care options.
The agency in October released new guidelines intended to better support state-based pediatric reimbursement systems and improve equitable access. The guidance includes best practices for state Medicaid programs and the Children’s Health Insurance Program (CHIP) to implement and comply with early and periodic screening, diagnostic and treatment (EPSDT) coverage requirements. The guidelines have the potential to clarify payment policies and expand awareness of and access to pediatric palliative care.
In November, CMS expanded tribal health care reimbursement options in state-based and pediatric programs. The agency approved coverage amendments allow CHIP programs and Medicaid programs in Arizona, California, New Mexico and Oregon to cover traditional health care practices by tribal and Indian Health Service facilities and urban Indian organizations.
These evolutions in the Medicaid payment landscape have significant meaning for palliative providers’ ability to reach a growing patient population with diverse unmet needs, Hughes said.
“These are perfect fits for palliative care, because the Medicaid population is usually underserved with high needs, and that’s what palliative care does,” Hughes told Palliative Care Needs. “The problem is there’s lots of great ideas, but then there’s a lot of red tape, and it’s typically low reimbursement. The hugest needs are with that Medicaid population, and we have not had good success in the Texas market as of yet.”
