Hospice Carve-In for Medicare Advantage is ‘Inevitable’

While much of the health care system is moving more Medicare beneficiaries into managed care, hospice continues to live on its own island. That’s because hospice is not allowed as a benefit in Medicare Advantage plans.

“What the MA structure creates is a bifurcation,” Julia Driessen, assistant professor of health policy and management at the University of Pittsburgh, said while speaking at the National Hospice and Palliative Care Organization (NHPCO) management leadership conference in Washington D.C. this week.

However, hospice providers may not be isolated for too much longer, Driessen and others suggested.


Medicare Advantage aims

With Medicare Advantage providers on side of the benefit wall and hospice on the other, the bifurcation isn’t helping improve one major problem with hospice care: late utilization.

Currently, about half of hospice patients are admitted within the last two weeks of life, while the benefit can provide end-of-life care services for six months. Hospice providers have aimed to improve these transition times for better care and to also reduce the overall cost of end-of-life care by preventing some patients from ping-ponging in and out of the emergency room.


Still, hospice stands alone, while its usage continues to grow and spending rises.

However, with the Medicare Payment Advisory Commission (MedPAC) having recommended that hospice become a Medicare Advantage benefit in March 2014, many think the addition is “inevitable,” according to Turner West, director of education and communications, director of The Palliative Care Leadership Center at Bluegrass Care Navigators, an education and care services provider.

Within accountable care organizations (ACOs) there is increased integration between plans and hospice providers, according to Driessen, who sees these structures as the “beginning of disassembling that wall” between hospice and MA.

MA plans are already seeing increased flexibility when it comes to their supplemental benefits; CMS recently announced that non-skilled in-home care could be added to plans in 2019. However, hospice was not included as a supplemental benefit for 2019.

Still, it appears that home-based care providers and managed care payors believe that hospice is a key part of the care continuum.

Several large providers, including Encompass Health (NYSE: EHC) and Addus HomeCare (Nasdaq: ADUS), are seeking to beef up their hospice offerings, pointing to how it can help manage costs and outcomes for patient populations and saying it should help entice managed care partnerships.

Meanwhile, just this week, major Medicare Advantage insurer Humana (NYSE: HUM), along with two private equity firms, acquired hospice provider Curo for $1.4 billion. Humana and its private equity partners are also in the midst of acquiring Kindred at Home, the home health arm of Kindred Healthcare (NYSE: KND), and plan to ultimately create the nation’s largest hospice provider by merging Kindred’s hospice operations with Curo’s.

Plan concerns

Because of the nature of hospice being separate, Medicare Advantage plans are not as familiar with the benefit and its overall costs. This limited knowledge has been some cause for concern among plans when considering a carve-in benefit for MA, according to Driessen.

“There is a fair amount of uniformity in the concerns around a carve-in…the fact this has been regulated to be off their radar, they don’t have data on [hospice],” she said. “[There’s] no incentive for them to understand the hospice landscape.”

While hospice may be too new for MA plans to even form networks, providers in the space shouldn’t get discouraged. Instead, they can focus on developing quality measures that will make sense to managed care organizations and MA plans.

“It’s the general lack of knowledge that makes this issue particularly thorny,” Driessen said.

Written by Amy Baxter

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