Androscoggin CEO: Modernization of the Hospice Benefit is Coming With VBID

As the hospice community takes its first steps into value-based reimbursement, stakeholders have an opportunity to re-examine elements of the Medicare Hospice Benefit that may be outdated, according to some providers.

The hospice benefit became a formal part of Medicare in 1983. Initially, the U.S. Centers for Medicare & Medicare Services (CMS) and its collaborators predominantly designed the program around the needs of cancer patients.

In the intervening years, other diagnoses have become more prevalent among hospice patients. A clear example is dementia-related illnesses, which have a much less predictable trajectory than most cancers. In 2019, more hospice patients had a principle diagnosis within the Dementia-Alzheimer’s-Parkison’s disease grouping than any other type of disease, according to the National Hospice and Palliative Care Organization (NHPCO).

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This changing tide has led questions around the continued value of the six-month terminal prognosis requirement for hospice eligibility, with some contending that value-based reimbursement can be a driver for change, according to Kenneth Albert, president and CEO of Maine-based Androscoggin Home Healthcare + Hospice at the National Association for Home Care & Hospice (NAHC) Financial Management Conference in Las Vegas.

“Modernization [and] change of the hospice benefit is coming at us right now, with the Medicare Advantage [value-based insurance design (VBID) model],” Albert said during the conference. “We’re starting to see that there will be a significant tsunami of Medicare beneficiary deaths in the hospice benefit, and I believe that payers are looking at it as now’s the time to modernize these movements. We need to be proactive in engaging in a dialogue about what hospice services should look like in the future.”

Through the value-based insurance design (VBID) demonstration, CMS is testing the efficacy of hospice reimbursement through Medicare Advantage. The model involves greater levels of financial risk than hospices are accustomed to through traditional Medicare benefit reimbursement. The program takes a somewhat different approach to tying payment to providers’ performance against certain metrics.

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Concern over the risk has led some providers in VBID markets to opt out, taking the view that the theoretical opportunities for increased utilization and access, if they come to fruition, would not be enough to offset the potential costs.

Also, as a demonstration project, VBID comes with certain inherent limitations. First, participation in the four-year demo is voluntary for payers and providers. Secondly, CMS has limited the program to certain markets.

Often called the MA hospice carve-in, this demonstration is driving many hospice providers to diversify their services to cover more upstream care.

Despite the limited timeframe and scale, the profile of value-based reimbursement is likely going to rise.

The Center for Medicare & Medicaid Innovation (CMMI), the CMS component charged with designing model demonstrations, has set an objective to ensure that every Medicare beneficiary becomes aligned with a value-based payment system.

“We definitely, in Medicare, are looking to increase our footprint in value-based care,” Dr. Meena Seshamani, director of the Center for Medicare within CMS, said at the Home Health Care News Capital+Strategy conference in Washington, D.C. “And in holistic care models where you’re really encouraging that team-based approach to care, you’re enabling providers to come together to take accountability for cost and quality.”

With this level of change in the air, hospices need to ensure that they have a seat at the table when new payment systems are designed and implemented, according to Albert.

“If the benefit is going to change, you want to be part of the solution,” Albert told Home Health Care News at the NAHC conference. “Right now, Medicare Advantage doesn’t have the infrastructure to navigate somebody through to death. Payers don’t understand that there’s a lot of risk to that from a cost perspective.”

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