Why Home Health Care’s Experience Casts Doubt on a Hospice MA Carve-In

The Centers for Medicare & Medicaid Services (CMS) made waves in January when it unveiled plans to test a hospice carve-in under Medicare Advantage (MA), a step long viewed as “inevitable.”

Specifically, CMS officials said they would test the feasibility of a hospice carve-in starting in 2021 through the MA Value-Based Insurance Design (VBID) model. While the idea reflects the steady expansion of Medicare Advantage overall, it could leave hospice providers financially restricted and jeopardize the quality of end-of-life care in the United States, industry leaders warn.

And to better understand the downside of a hospice carve-in, one need only look at home health care’s experience with MA, they point out.

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“The experiences of home health have not been what we think they should be,” National Association for Home Care & Hospice (NAHC) President William A. Dombi said last month at the organization’s Financial Management Conference in Chicago. “We see home health as the best partner Medicare Advantage could ever have — and there are some plans that understand that value … but others that maintain an insurance-company mentality.”

The MA program has rapidly expanded in recent years, with more than one-third of all Medicare beneficiaries — or 22 million people — enrolled in Medicare Advantage plans in 2019.

As more people have opted for MA, more services have entered its scope as well, including non-medical in-home services and supports that address social determinants of health.

Historically, though, home health providers have struggled with getting the most out of their MA relationships. MA rates are largely comparable to traditional fee-for-service Medicare for hospitals and physician groups, but lag behind when it comes to home health care.

“That’s not an experience we want in home health, but it’s certainly not something we want to see operating in hospice,” Dombi said.

Accordingly, NAHC maintains an “unqualified opposition” to a hospice carve-in, listing it among its top priorities for 2019 and beyond. NAHC’s message to CMS: If the hospice benefit isn’t broken, then don’t fix it.

Others have voiced similar concerns.

“We have already seen this movie. We don’t like the plot. We don’t like the ending,” LHC Group Inc. (Nasdaq: LHCG) Chief Strategy and Innovation Officer Bruce Greenstein said during the Financial Management Conference. “Medicare Advantage has not been nirvana. It has not been enlightenment.”

Additionally, he said, it’s intellectually inconsistent to have health plans be in the business of managing end-of-life care when they’re simultaneously responsible for the promotion of health and well-belling.

If a hospice carve-in under MA does become a reality, Louisville, Kentucky-based Humana Inc. (NYSE: HUM) would likely have a significant edge over its peers.

The insurance giant has grown into a hybrid “payvidor,” thanks to its 2018 acquisitions of both Kindred Healthcare and Curo Health Services with TPG Capital and Welsh, Carson, Anderson & Stowe.

Kirk Allen, president of Humana At Home, recently told Home Health Care News that it’s currently too early to say what a hospice carve-in would definitively look like, but that Humana would strive to make sure rates were competitive.

“We are supportive of the [hospice benefit] payments that come from CMS, and we want to make sure that Medicare Advantage plans have a payment high enough to support a quality program,” Allen said, talking to HHCN at last week’s Senior Care 360 conference in Maryland. “We see hospice as an important program, so we would gravitate towards payments that will be appropriate for the provision of care that is going to take place.”

Despite what has transpired in the past, there are signs MA plans are starting to recognize the value that home health care brings to the table and compensate their home health providers more appropriately. 

“As MA plans grow and become more sophisticated, they’re realizing that — for their continued growth and future — they can’t bank on enrolling younger, healthier Medicare beneficiaries who don’t require any sort of home health or post-acute care services,” Fred Bentley, managing director of health care consulting firm Avalere Health, previously told HHCN. “They are going to have to figure out how to manage sicker, more challenging patient populations, and home health is a critical part of that.”

Additional reporting by Joyce Famakinwa and Jim Parker

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