Medicare Advantage Plans Gearing up to Coordinate Palliative Care and Hospice for Members

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AUTHOR – ATI Advisory

Beginning in January 2021, the Centers for Medicare & Medicaid Services (CMS) is adding a hospice component to the Medicare Advantage Value Based Insurance Design (VBID) Model. Despite calls to delay the start of the hospice component in VBID, CMS is moving ahead, announcing that 53 plans across 13 states and Puerto Rico will include hospice benefits.


CMS and The Medicare Payment Advisory Commission (MedPAC) have long believed that the hospice “carve-out” from Medicare Advantage results in a convoluted set of coverage rules for Medicare Advantage enrollees who elect hospice and fragments accountability for care and financial responsibility across the care continuum.

Regardless of whether a Medicare beneficiary is in Medicare Advantage or not, hospice can often feel like a bridge too far. Curative care ends abruptly rather than gradually shifting to palliative and then to hospice. The benefit does not flex for individual and family preferences on making these transitions. As a result, about half of Medicare beneficiaries die without hospice care.

Through the VBID demonstration, CMS is pushing health plans to develop pathways to improve transitions across curative, palliative, and hospice care and tailor benefit packages to the needs of enrollees near the end of life. This initiative is consistent with other flexibilities CMS and Congress have added recently to the Medicare Advantage program, such as an expanded definition of “primarily health-related” that now includes benefits such as home care.

CMS is using the hospice component in VBID as a voluntary test of coordinating both payment and care responsibility for the Medicare hospice benefit for enrollees who choose Medicare Advantage and elect hospice. The goals here are to enable seamless care along the continuum, improve quality and timely access to palliative and hospice care, and foster innovation by strengthening partnerships to Medicare Advantage Organizations and hospice providers.


CMS will be measuring and monitoring quality of hospice care around documentation of goals of care, rates of hospice utilization shorter than 7 days and longer than 180 days, rates of pain control, family experience and perception of access, and days at home during last 6 months of life.

For plans participating in the hospice component of VBID, they must develop an approach for palliative care services including patient specific plans of care, advance care planning and discussions around choices and shared decision making, and transitions of care if hospice is elected.

Plans must develop these competencies while working with palliative care and hospice providers for the first time. Hospice providers who have experience contracting with Medicare Advantage plans for the home health benefit are understandably nervous. Plans pay lower rates than Medicare fee-for-service, exclude some providers from their network, and frustrate agencies with utilization management and prior authorization. On the other hand, plans experience frustration with providers that don’t fulfill service requests in a timely manner or who deliver poor quality care.

There’s reason to hope that the plan/provider relationship will be different with hospice services. First, palliative care and hospice reduce overutilization of inpatient hospital services, creating savings for plans. The interests of plans and providers should be more aligned as a result.

Hospice providers in the markets where plans are participating in the demonstration should not panic. For the first two years of the demo, CMS requires plans to pay providers at the Medicare fee-for-service rate and to keep an open network. During this window, hospice providers in these markets should go to school on Medicare Advantage and the plans in their market participating in the demonstration and should seek to develop relationships as well as palliative care programming if they haven’t already. It’s not too late. And in the meantime, sign up for the ATI newsletter and follow us on LinkedIn and Twitter to catch our updates on Medicare Advantage and hospice.

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