While community-based palliative care is important for many patients, providers may often consider it to be a financial challenge. 

Community-based palliative care programs are often reimbursed through privately managed care plans, and to date, only five states include community-based palliative care in their Medicaid programs: California, Colorado, Hawaii, Maine and Oregon. An additional seven more are considering or implementing community-based palliative care programs: Arizona, Florida, Iowa, Michigan, New York, South Carolina, Washington.

“There is always tension and debate around the value of palliative care, because if you look at it as a separate business unit, it always looks like a loss leader,” Craig Dresang, CEO of the California-based hospice provider YoloCares, told Palliative Care News.

California governor Jerry Brown in 2014 signed into law SB 1004, which requires managed care plans associated with Medi-Cal (California’s Medicare) to provide for palliative care programs.

Initially the board of YoloCares expressed concern about the financial viability of a palliative care program, and Dresang reviewed statistics for patients who had received palliative care and transferred to hospice within 18 months. He found that “the portion of patients who came from palliative care to hospice… more than paid for the palliative care program.”

While palliative-to-hospice referrals are one way to cover the cost of palliative care, other measures merit consideration. YoloCares was originally a “scrappy organization,” as Dresang describes it, with 68 patients, but they were awarded a $3 million grant through Partnership HealthPlan of California, a managed care program for Medi-Cal, to start a palliative care program.

With this support, YoloCares built up a quality program, becoming the first Joint Commission-certified community-based palliative care program in the state.

Aside from grants, managed care providers offer reimbursement; however, the model depends on the payer. They often use a per-month, per-patient rate.

The individual payers have different criteria that determine what they cover, including the type and stage of disease, frequency of visits and the kind of care providers, such as community health workers, nurses and social workers.

Some plans may reimburse enhanced care management, which addresses the social determinants of health (such as access to food and job and housing security). Managed care organizations also may incentivize positive outcomes, offering monetary rewards for reduced emergency room visits and advanced care directives.

Palliative care providers need to secure contracts with these managed care plans to capitalize on Medicaid opportunities.

“Securing those contracts is both an art and a science. One of the benefits of the $3 million grant we received is that the state paid directly for a consulting firm … to help us secure those contracts,” Dresang said.

This service was indispensable: The process of contracting with managed care providers is very labor intensive, and no one at YoloCares had that skill set.

To secure contracts, Dresang recommends setting up a palliative care program first and then seeking managed care providers. Even if it secures only one payer, this is still a beneficial endeavor. Regardless, he says, hospice organizations should be considering palliative care programs. Dresang anticipates changes to legislation that will mandate palliative care programs, so being ahead of the curve can be a benefit.

Finally, palliative care patients often transfer into the organization’s hospice program, allowing for reimbursement. Dresang relates that physicians can be uncomfortable discussing next steps with their patients, so they now can refer them to YoloCares for palliative services.

YoloCares now has 250 patients in both palliative care and hospice and plans to expand its palliative care offerings into 10 more counties. Dresang attributes this success to doing the right thing.

“If you do what’s right for the patient and family and focus on quality, financial performance will follow. Sometimes that means making financial decisions that are not good for the organization, but they’re the right decision,” Dresang said. “And that’s where we really try to focus.”