CMS to Sunset Hospice VBID in 2024

The U.S. Centers for Medicare & Medicaid Services will end the hospice component of the value-based insurance design model (VBID) as of Dec. 31.

Often called the “hospice carve-in,” the program was designed to test coverage of hospice care through Medicare Advantage, in addition to some coverage of palliative care and transitional care. The hospice component, which launched in 2021, is part of the larger VBID demonstration, which covers a wider breadth of the health care continuum and is slated to continue until 2030.

“After carefully considering recent feedback about the increasing operational challenges of the Hospice Benefit Component and limited and decreasing participation among MAOs that may impact a thorough evaluation, CMS has decided to conclude the Hospice Benefit Component as of December 31, 2024, 11:59 PM,” the agency indicated in a statement. “CMS will not accept applications to the previously released CY 2025 Request for Applications for the Hospice Benefit Component of the VBID Model.”

For calendar year 2024, 13 Medicare Advantage Organizations (MAOs) are participating in the hospice component, providing coverage through 78 health plans in 19 states. This is down from 2023, when 15 MAOs participated with 119 health plans in 23 states.

While CMS did not give further details behind its decision to end the program, an analysis conducted last year by the RAND Corp. could shed light on some of the “operational challenges” that the agency cited.

RAND examined the program’s results for Calendar Year 2022. The analysis indicated that participating payers and providers experienced difficulties implementing the program.

Among the top roadblocks for payers was the need to build out a network of hospice providers and development of payment contracts with those agencies. Another difficulty was the retooling of some administrative processes, including claims processing.

Hospice participants likewise encountered challenges when it came to claims processes as well as plans’ adjudication of denied claims, which they found to be time consuming and resource intensive, RAND indicated. They also indicated that their payments from MA plans were often delayed, which put constraints on their cash flow.

A common conundrum during 2022 was confusion around which patients were eligible for other services included in the program, including palliative care, transitional concurrent care and hospice supplemental benefits, according to the analysis. One contributing factor was that eligibility requirements can differ from plan to plan.

Moreover, palliative care utilization was lower than insurers expected, according to RAND, and less than 1% of beneficiaries received transitional care. About 6.5% of hospice VBID patients received supplemental benefits associated with the program.

Despite ending the hospice component, CMS hopes to glean valuable information from the results to date.

“CMS will continue its evaluations of the Hospice Benefit Component to assess this separately. Despite encountering operational challenges and limited participation, this voluntary test has played a significant role in transforming the delivery of serious illness care in the MA program through meaningful partnerships between MAOs and hospice providers,” the agency indicated. “CMS has also gained valuable insights into creating a seamless care continuum in the MA program for Part A and Part B services, inclusive of the Medicare hospice benefit.”

The Medicare Advantage hospice carve-in has been a source of controversy since CMS announced its plans for the program in 2019. Many providers saw it as a threat to the traditional Medicare benefit, with some arguing that CMS should “fix what isn’t broken.”

Industry organizations also voiced opposition to the demo, including the National Association for Home Care & Hospice (NAHC) and the National Hospice and Palliative Care Organization (NHPCO), raising questions about how VBID could affect patient choice and timely access to care. NHPCO voiced concerns about the program as recently as last month.

“This is a huge victory for patients’ access to quality care and for hospice providers who have continually identified challenges with this demonstration including concerns about VBID giving [Medicare Advantage Organizations (MAOs)] the ability to limit patient choices. NHPCO has advocated for years to end the VBID hospice carve-in and appreciate CMS making this important change,” said Ben Marcantonio, COO and interim CEO of NHPCO, in a statement. “We saw great success with concurrent care tested through the Medicare Care Choices Model (MCCM) and would encourage CMMI to consider these learnings as a potential path forward.”