Palliative Care Drives Value in New Payment Landscape

New payment models are upon us, and palliative care providers are jumping on the opportunities to expand their reach with other health care groups. With the fee-for-service era on its way out, alternative payment models for palliative care are growing.

“Payment change is happening now,” Phil Rodgers, MD FAAHPM, said while speaking at the AAHPM & HPNA Annual Assembly in Chicago March 11. “Fee-for-service is under fire.”

Rodgers compared payment models that are currently being phased out to the business of football.


“It’s a lot like the business of football,” Rodgers explained during the forum. “[The objective is to] put as many people in seats and have them pay regardless of the game. Now, we have to start incentivizing different things. Move from volume to value.”

With more opportunities on the horizon, palliative care providers are taking different approaches to drive value and cost savings across the health system.

The ACO Answer 


Under new CMS incentives, more health care entities are working together to take on more risk with other partners.

“Whether you like it or not, you will be working in a risk-sharing role,” Rodgers said. “The government is not asking you to eat your vegetables.”

However, there is a great upside to these evolving payer models. For a lot of health providers that offer palliative care, working with an accountable care organization (ACO) is the answer to expanding and paying for these services.

ProHEALTH Care Associates, one of the largest integrated physician group practices in the New York metropolitan area, is part of a Medicare Shared Savings program than encompasses 30,000 patients. Being a part of the program enables the group to bill for house calls, advance care planning and chronic care management.

In its first year, the ACO brought in $11 million, according to Dana Lustbader, MD, chair of the department of palliative medicine with ProHealth. In the second year, the ACO brought in $8 million by targeting the top 2% to 5% of the highest acuity patients.

By targeting this top patient group and working in an ACO, ProHEALTH can serve more patients who need palliative care.

Integrated Approach 

Community-based palliative care is increasing in demand, but incentives for these services have largely kept care within clinical setting.

Aspire Health is the largest provider of home-based palliative care, operating in nine states with near-term plans to be working in 12. The provider supports palliative care patients through its integrated system of partnerships to meet needs in the community throughout the continuum of care.

With a care support team of palliative care physicians, nurse practitioners, patient care coordinators, social workers and chaplains, Aspire Health’s team partners with other physician groups to bring these services into home settings.

Other providers are also integrating with physician groups. With CMS penalizing hospitals for readmissions, palliative care providers have a big opportunity to help manage patient outcomes, says Jim Mittelberger, MD, director and chief medical officer of Optum Center for Palliative and Supportive Care.

Optum Center—formerly known as Evercare Hospice & Palliative Care—is a national hospice and palliative care provider that supports integrated palliative care programs with numerous physician-led provider organizations. The fully integrated approach can help reduce hospitalizations significantly by bringing palliative care leaders and providers on board with a larger group or organization.

This course provides some serious advantages for palliative care providers, including access to resources of a larger system, access to data and information and engagement in a larger system change, Mittelberger has found.

Twenty-five percent of Medicare costs come from patients in the last year of life, and about half of that is from just the top 5% of the highest acuity patients. Palliative care, which targets these patients, can help reduce these costs and improve patient outcomes when working with physician-led groups, according to Mittelberger.

“We palliative care providers understand the more care delivered at the right place at the right time will lead to less cost,” Mittelberger said during a session at the annual assembly. “We can save the overall system a lot of money.”

Written by Amy Baxter

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