CMS To End Hospice MA Carve-In: Insights For Home-Based Care Providers

This article is a part of your HHCN+ Membership

Grand opening, grand closing.

Hospice providers began to work with Medicare Advantage (MA) via the Value-Based Insurance Design (VBID) demonstration in 2021. At the end of 2024, the “hospice carve-in” model will cease.

This will have an impact on home health providers who offer hospice services, obviously. But the failure of hospice’s fit within VBID points to larger problems that exist somewhere between home-based care providers and MA plans.


Since the Centers for Medicare & Medicaid Services (CMS) announced the end of hospice carve-in on Monday, hospice providers – many of which also provide home health care – have mostly applauded the move.

I reached out to multiple leaders throughout the week to get their takes, and one told me he was happy to see a “dysfunctional system go away.”

VBID was designed to help modernize the MA program. Along the way, hospice care and other tangential services were supposed to become a larger part of the program.


But plan and provider interest dwindled over time. Plus, providers weren’t exactly in the position to thrust themselves into a new payment system with more administrative legwork at the end of 2020 and in the beginning of 2021. There was something else going on during that period, too, I recall.

Thus, for now, home health providers will continue with the arduous task of working harmoniously with MA plans. Hospice providers, for now, are spared from that.

In this week’s exclusive, members-only HHCN+ Update, I dive into what CMS’ ditching of the hospice carve-in means for home health and hospice providers generally. I’ll also get into what it may mean for that space between home-based care providers and MA plans moving forward.

What providers think

Our sister site, Hospice News, has covered this story extensively throughout the week and gathered comments from many provider leaders and advocates. You can read most of those comments here.

I’ll highlight a couple here, too.

“This is a huge victory for patients’ access to quality care and for hospice providers who have continually identified challenges with this demonstration including concerns about VBID giving [Medicare Advantage Organizations (MAOs)] the ability to limit patient choices,” Ben Marcantonio, COO and interim CEO of the National Hospice and Palliative Care Organization, said in a statement.

Generally, providers and advocates believed doing away with the hospice carve-in was the right move. But many also wondered what may come next, recognizing the need for future innovation.

“Innovation remains vitally important,” Blue Ridge Hospice CEO Jason Parsons told Hospice News. “I believe what we’ve learned from the demonstration can spur innovation in other ways such as changes in concurrent care, palliative care payments, innovations around quality and access, and spurring organizations to elongate their continuum, as Blue Ridge has done with our PACE program, for example.”

Ultimately, the hospice carve-in was not laid out with enough thought behind it. Furthermore, it did not give providers enough time to consider how to best engage with it, particularly at a time when COVID-19 was peaking.

Many providers did adjust operations, though. Providers with the means tried to gain more scale to better account for a landscape with the hospice carve-in.

“The Medicare carve-in is something that hospices have been thinking about, planning for and talking about for years,” Nate Lamkin, president of the Fort Collins, Colorado-based Pathways Hospice, told Hospice News in 2021. “There was a rush not just in hospice and home health, but really in all sectors of health care to scale up. Our collective scale puts us on the radar of payers in a way that smaller, individual nonprofits wouldn’t be.”

It was also affecting the M&A market in other ways, VitalCaring President Luke James told me Thursday.

“It was impacting several deals we were looking at, especially smaller deals, in the $8 million to $15 million range, if the sellers were in a market with more exposure to it,” James told me. “Because the feedback we were getting from sellers was, ‘This payer is awful to work with in this market,’ or collectability is an issue, that DSOs are lengthened. … It was muddying the waters a little bit there, because we’re having to forecast what that looks like and the growth payers will have in given markets.”

That means it was affecting the leverage sellers had in certain markets, too, where VBID and the hospice carve-in may have been more prevalent, but also more of a problem.

New Day Healthcare CEO G. Scott Herman also told me the VBID system for hospice was a little bit “complex” and also “incomplete.”

The space between

In theory, the Medicare Advantage program is supposed to mirror the traditional Medicare program.

That theory doesn’t always work in practice. Home health providers will be the first ones to tell you so.

But the hospice carve-in also mirrors the supplemental benefit ups and downs that home care providers have seen with MA.

In 2024,13 Medicare Advantage Organizations (MAOs) were participating in the hospice carve-in, providing coverage through 78 health plans in 19 states, according to Hospice News. That was down from 2023, when 15 MAOs participated with 119 health plans in 23 states.

Similarly, supplemental benefit offerings in general increased steadily at first, but then began a downturn.

From 2020 to 2023, there was a 364% increase in plans offering the in-home support services (IHSS) benefit, which can be administered through the primarily health-related pathway and the Special Supplemental Benefits for the Chronically Ill (SSBCI) pathway.

In 2024, however, only 847 plans are offering IHSS as a supplemental benefit, a decrease from the 1,308 plans offering the benefit in 2023.

With VBID, MA plans struggled to create meaningful networks of providers to deliver hospice services. Providers, on the other end, were frustrated by increased administrative burden and payment issues.

Likewise, MA plans have found difficulty satisfying home care needs for their members, finding the home care industry too fragmented. Organizations like The Helper Bees have created solid networks on behalf of plans, but plans haven’t been able to do that themselves.

Some home care organizations never sought after the MA dollar, predicting trouble. Others are still invested, but their patience is wearing thin.

In the end, MA plans desperately need a wide range of home-based care providers to deliver care to their members. Adequate home health, hospice and personal care will undoubtedly keep their post-acute care costs down.

But for now, some things just don’t work in MA. That’s a bummer for forward-thinking providers who have adjusted to provide care for MA beneficiaries, but also an issue that plans need to solve.

Until they do, the bridge between MA plans and home-based care providers will remain under construction.

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