Recently, the CMS Center for Medicare & Medicaid Innovation (CMMI) released its 2021 Request for Applications (RFA) for its hospice Value-Based Insurance Design (VBID) model. This model will allow Medicare Advantage Organizations (MAOs) to test incorporating the Medicare hospice benefit into Medicare Advantage (MA). This model is open to all MAOs and will allow plans to gain experience managing the hospice benefit as a critical component of a comprehensive advanced illness strategy—anticipating a likely future statutory carve-in. Applications are due March 16.
While MAOs traditionally take on the responsibility to provide and manage a beneficiary’s Medicare Part A and Part B services, hospice services (which are under Part A) have been statutorily excluded from MA. As a result, when a Medicare Advantage beneficiary elects hospice, Medicare FFS takes on responsibility for paying hospices as well as unrelated Part A and Part B costs. However, since 2014, MedPAC has recommend that the hospice benefit be carved back into MA, citing such advantages as:
- Giving plans the incentive to consider the end-of-life needs of their members more broadly and to provide coordinated, efficient care to meet those needs;
- Synchronizing accountability across systems (e.g. hospice costs are part of ACO cost calculations, but excluded from MA);
- Providing more incentives to develop innovative programs for patients with advanced illnesses both at the end of life and earlier in the disease progression; and
- Simplifying some of the complex coverage issues concerning services related and unrelated to the terminal condition for MA enrollees.
For plans that may be considering participation, it is important to understand that the demonstration will require more than just contracts with a network of hospice providers—specifically, CMMI is seeking applicant’s information on (1) the MAOs palliative care program and how that will transition into hospice care; (2) the MAO’s approach for transitional concurrent care (i.e. minimizing stark changes from curative to palliative care); and (3) any hospice-specific supplemental benefits to address items such as end-of-life social determinants of health services.
Additionally, plans considering this model will want to review the forthcoming methodology for the hospice capitation rate that will be used to reimburse MAOs when a beneficiary elects hospice. Specifically, under this demonstration the hospice benefit will not be part of the standard A/B bid, but rather a separate monthly capitated payment rate that will reflect the average expected hospice costs of a beneficiary in a given month (these rates will not be risk adjusted).
Finally, recognizing that MAOs may not have robust contractual relationships with a hospice network in place, CCMI is creating a transitional approach to network adequacy in 2021 and 2022 that allows for fewer in-network hospices than would otherwise be required under traditional network adequacy rules; beneficiaries would be protected by allowing easy access to out-of-network hospices (i.e. all Medicare hospices). Nonetheless, by 2023 the demonstration will be administered though a more traditional MA program network approach.
If your organization is interested in learning more about this model from either the payer or provider perspective, ZAHealth is positioned to assist your organization with a deep understanding of both Medicare Advantage and hospice, as well as advanced analytic capabilities. Please contact us at adam@zahealth.net.