Hospices have taken their first steps towards value-based reimbursement during the past two years, but signs point to a long journey ahead.
The U.S. Center for Medicare & Medicaid Innovation is currently testing coverage of hospice care through Medicare Advantage through the Value-Based Insurance Design (VBID) program. Often called the Medicare Advantage hospice carve-in, the program is more than halfway through its second year.
Though it remains to be seen whether the VBID model will become permanent in the long run, hospices can expect value-based payment systems to become more prevalent as time goes on.
“Promoting value based care is a passion and a mission,” CMMI Director Liz Fowler said at the National Association of Accountable Care Organizations annual conference. “And I believe it’s the right direction for our health system and the right approach to improve the health care experience for patients. I’m committed to doing everything I can to move us in this direction.”
The carve-in is designed to assess payer and provider performance related to hospice within Medicare Advantage. Participation in the demonstration is voluntary for both payers and providers.
The program also has a palliative care component. Participating providers must offer palliative care to remain in the program. Medicare Advantage plans have the option to cover palliative care as a supplemental benefit.
Participation in ACOs is another avenue for hospices to make inroads into value-based models.
Starting next year, hospices can participate in the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) program.
Introduced in late February, ACO REACH replaces the Global and Professional Direct Contracting (GPDC) models. CMS indicated that the program reflects its refreshed priorities for payment system demonstrations.
Among these priorities are improving the quality and cost of care for beneficiaries and a focus on diversity, equity and inclusion. Providers participating in the new model “are expected to use a model of care designed to serve individuals with complex needs,” according to CMS guidelines.
ACOs will be a particular focus for CMMI as they work to expand value-based payment.
“Accountable care is the cornerstone of that strategy — integration. Team-based coordinated care through advanced primary care and ACOs is really the linchpin to driving better outcomes and bending the health care cost curve,” Fowler said. “We set a bold goal of having 100% of Medicare beneficiaries and the vast majority of Medicaid beneficiaries in accountable-care relationships with providers who are responsible for cost of care and quality.”
A vast range of payment and care delivery systems can fall under the designation “value-based care.” For many hospices, the best pathways to those payment models are through additional upstream services, such as palliative care, home health, and PACE, among others.
One commonly occurring value-based principle is the concept of population-based reimbursement. In this approach, a health care provider agrees to accept responsibility for a group of patients in exchange for a predetermined amount, typically with incentives for cost savings and improved quality.
Even in today’s rancorous political climate, to date, value-based programs have received widespread — but not universal —bipartisan support. The Obama, Trump, and Biden administrations each took steps to expand those programs.
“By 2026, we’ll run out of money,” Seema Verma, who served as U.S. Centers for Medicare & Medicaid Services (CMS) administrator during the Trump administration. “The path forward is value-based care.”
