Seeking the Formula for Sustainable Palliative Care

The United States lacks a robust reimbursement system for palliative care.

While stakeholders work toward change, providers are developing innovative ways to work with what they have to bring this care to patients in need.

Historically, the U.S. Centers for Medicare & Medicaid Services (CMS) has reimbursed palliative care through a fee-for-service model that only covers physician and licensed independent practitioner services, rather than the full range of interdisciplinary care.

In recent years, the agency has allowed for some value-based reimbursement through Medicare Advantage supplemental benefits and some Accountable Care Organization arrangements. The Center for Medicare & Medicaid Innovation has also included palliative care elements within the value-based insurance design model demonstration.

While these programs have opened some pathways, they are often inconsistent in design and are not available nationwide. For example, while Medicare Advantage plans have the option of offering palliative care as a supplemental benefit, to date, relatively few have chosen to do so. 

With these limitations, many providers still support their palliative care programs through philanthropic donations.

“The bottom line is, what we have right now is insufficient,” Edo Banach, president and CEO of the National Hospice and Palliative Care Organization (NHPCO), told the audience at the Hospice News Palliative Care Conference in Chicago. “That doesn’t mean that there aren’t people who have figured out how to provide some of it, but it’s a patchwork that isn’t quite able to meet the needs of the population right now.”

NHPCO, other industry groups and many providers have called for the establishment of a dedicated community-based palliative care benefit within Medicare. While that possibility remains on the table, providers in the interim are getting creative to support their programs.

Just last year, the Texas-based startup PalliCare launched in Texas, founded by CEO Jonathon Fluhart and Chief Operations Officer Tiffany Hughes. Initially focused on local markets near its Texas headquarters, in the space of a year the company has since expanded to several other states.

PalliCare has a two-fold approach within its care and business models. The company directly employs nurse practitioners and licensed clinical social workers who provide direct care, most often in nursing homes. In addition, PalliCare also serves as an incubator that supports nurse practitioners in setting up their own practices.

The company manages the electronic medical records system, human resources functions, insurance considerations and licensing and credentialing, among other business services. Without having to attend to these back-office considerations, the nurse practitioners are able to devote their time and resources to focus on clinical practice.

Developing the model took a great deal of research, networking with other providers and some degree of trial and error, Hughes told Hospice News at the conference.

“I am a huge advocate for a dedicated palliative care payment model, but in the meantime I’m very happy to be doing what we do with our company, which is a lot of innovation,” Hughes said. “We’ve brainstormed, tried things out that didn’t work and then tried something else. We’re always connecting with people, that’s the best thing. Hey, how are you doing this? We want to help each other succeed.”

Beyond the provider space, a rising number of players in the financial sector are looking more closely at palliative care, particularly venture capital and private equity firms.

The aging population represents a vast range of medical, social and other health-related needs. It also represents a substantial business opportunity for companies seeking to meet those needs, particularly those who can do this at a lower cost.

More investors are recognizing that palliative care fits that bill.

This trend has been in motion for at least the past five years, but the pace continues to pick up. A handful of large investments occurred during the first quarter of 2022 alone, including a $30 million funding round for Vynca in January.

Vynca launched as a tech-enabled advance care planning company, but ventured into the provider space last summer with the acquisition of Resolution Care. The company is now using its most recent influx of capital to build out its palliative care platform.

In February, home-based care provider ConcertoCare secured $105 million in Series B funds, which will fuel the company’s geographic expansion and support the launch of its PACE program. ConcertoCare offers a range of home-based health care services that includes palliative care.

“We’re seeing a lot of capital on the venture side, and the creative side is saying, wait a second, this is an underserved market, right? It’s a massive market, and there hasn’t been a lot of innovation for a while in this space,” Chris Booker, partner at Frist Cressey Ventures, said at the conference. “You’re starting to see more and more capital flow into these organizations that came up with different clinical models that are actually having the data and the information behind it to show the outcomes.”

Frist Cressey was an early investor in Aspire Health, which over time grew into the nation’s largest non-hospice palliative care company. The company’s footprint covers 32 states, caring for more than 200,000 patients. Anthem Inc. (NYSE: ANTM) acquired the company in 2018 for an undisclosed sum.

To date, investors are attracted to palliative care ventures that are focused on value-based payment arrangements. Those organizations have more potential for scale for the time being because those payment models are the only real reimbursement option outside of philanthropy.

While opportunities exist within those programs, they are not guaranteed cash cows. In these arrangements, providers must understand how to manage their anticipated utilization and related expenses, with efficiency and cost control essential to maximizing margins.

They also must become adept at negotiating with payers, such as Medicare Advantage plans.

Nevertheless, investment dollars represent potential, and they lend support to the clinical and moral arguments behind expanding palliative care. Firms that are pouring millions of dollars into palliative care providers are making that choice because they see the demand is there, expect those businesses to grow, and they are actively working to foster that growth.

The health care system’s approach to palliative care remains fragmented, and reimbursement lags behind practice. But learning to operate within the current systems — limited as they are — can give providers an opportunity not only to reach patients however they can, but to gather the data they need to make their case for a more robust approach, particularly when it comes to clinical and financial outcomes.

“It just makes so much sense. Catch these patients early; build a rapport; stay with them; navigate with them through all the systems and hand them over to hospice at the six-month point,” Hughes said. “I think the more that we do that, the more it will be absolutely necessary that it is paid for. I’m hoping we’ll have enough data and enough real-life experience and stories to show how important this is.”