A legislative provision that would “carve” hospice into Medicare Advantage is being met with opposition from the nation’s three largest industry organizations.

The National Alliance for Care at Home, LeadingAge and the National Partnership for Healthcare and Hospice Innovation (NPHI) have written a joint letter to Rep. David Schweikert (R-Ariz.), who recently introduced the Medicare Advantage Reform Act. If enacted, the bill, numbered H.R. 3467 would make widespread changes to the Medicare Advantage (MA), including the hospice carve-in.

Bringing hospice under Medicare Advantage would undermine patient choice, adversely impact timely access to care and leave providers with lower reimbursement rates, according to NPHI, LeadingAge and the Alliance.

“Putting aside your overall intent, requiring MA plans to administer the [Medicare Hospice Benefit (MHB)] would likely undermine the integrity, accessibility and quality of hospice care for America’s most vulnerable seniors,” the organizations wrote in the letter. “We urge you to remove this harmful provision from future iterations of this legislation and any other efforts to reform MA. Hospice is unlike other Medicare services because it already functions as a form of managed care.”

In addition to the clauses related to hospice, the bill would require all payments from MA plans to be capitated as of Jan. 1, 2028. The proposed legislation indicated two exceptions: special needs plans and MA plans that were made available in a particular region during the previous plan year.

The bill would also reduce blended benchmarks for MA plans. Benchmarks are the maximum amount the government will pay a health plan for covering services for beneficiaries. The “blended benchmark” refers to a specific methodology for calculating those amounts. Moreover, it would make changes to risk adjustment requirements.

Further, it would allow the U.S. Department of Health and Human Services to establish stop-loss payment for Medicare Advantage plans that experience significantly higher than expected expenditures, as well as eliminate benchmark increases associated with quality.

The legislation would permit the automatic enrollment of beneficiaries entitled to benefits under Medicare Part A, and who are enrolled in Part B, into the MA plan with the lowest available premium. Enrollees would have an opportunity to opt out of this enrollment.

One additional concern from the three hospice and senior care groups include the potential for utilization management by Medicare Advantage plans.

“A persistent issue in the MA space is the use of utilization management and the impact on beneficiaries — one example of many is a recent report that highlights how MA plans limit access to post-acute care services such as skilled nursing and home health via prior authorization. In contrast, MA enrollees who elect hospice currently retain the freedom to choose any Medicare-certified hospice provider, free from network limitations or prior authorization requirements …,” the organizations wrote. “Timely access to this critical benefit would be jeopardized by inserting additional administrative layers and processes on top of a benefit that is already a form of managed care.”

This is not the government’s first attempt to work hospice into Medicare Advantage. The highest profile example was the hospice component of the Value-Based Insurance Design model (VBID), which ended Dec. 31, 2024.

The U.S. Centers for Medicare & Medicaid Services (CMS) cited operational challenges related to the hospice component that limited and decreased participation among Medicare Advantage Organizations (MAOs) and impacted “a thorough evaluation” of the demo.

“The proposed carve-in seeks to solve a problem that does not exist, upending hospice as we know it, and subjecting dying patients to new administrative hurdles, reduced choice, and the risk of diminished care,” the organizations said in the letter. “The bottom line is that patients and well-meaning providers will suffer the consequences of this short-sighted proposal.”