The Center for Medicare and Medicaid Innovation (CMMI) continues to develop new concepts and test new ideas to improve the way care is delivered in this country. We think it’s great. They are paying attention to changes in the healthcare landscape – like the incredible growth in Medicare Advantage (MA) plans – and they are responding.

The latest? A pilot to test hospice as a benefit under MA plans. Many people predicted hospice would inevitably end up on the doorstep of MA, and now it’s happening. Beginning in 2021, MA plans will be able to test a hospice benefit model. The goal is to increase access to hospice and improve coordination between providers, according to federal officials.

There’s some opportunity knocking here.

For one, MA plans have experience in comprehensive care and ultimately could manage the benefit as well as or better than FFS Medicare. That’s good because members seem to like their MA plans and no doubt will want to stay with them for hospice services, too.

Additionally, the program has enough scale to render results – enrollment has nearly doubled in the last decade to include 34% of all beneficiaries. That’s also good.

But the model doesn’t come without concerns.

Challenges for MA plans

The hospice demo is part of the larger Value-Based Insurance Design (VBID) model for 2020. So make no mistake: CMS is expecting reduced costs first and foremost.

MA plans will be on the hook immediately to demonstrate measurable value around hospice care. That leaves operators with two basic challenges: discovering best practices and contracting with high-quality providers.

In terms of best practices, MA plans will need to work on determining the most appropriate transition times for patients. Hospice is often underused, as individuals often don’t make the transition until very late in their end-of-life care cycle. Yet, the optimal time to move a patient to hospice isn’t always clear.

FFS Medicare offers the hospice benefit to those in end-of-life stages for up to six months. Yet, the typical length of time in hospice is only about three weeks. Additionally, about one-third of patients don’t enter hospice until the last week of life (Journal of the American Geriatrics Society, September 12, 2017).

By transitioning patients to hospice earlier, MA plans could reduce emergency department utilization and alleviate some of the most difficult care burdens for loved ones. Hospice is often delivered by home-care clinicians, which can translate to lower costs as well.

Designing the new benefit will call for new relationships in the MA portfolio. Plans will move methodically in contracting with quality provider organizations and might opt for larger and more tech-enabled organizations, at least at first. A collaborative approach will be required, especially when it comes to helping some of the community-based hospice providers navigate MA relationships.

Cautious optimism

The National Association for Home Care & Hospice (NAHC) is already sounding the alarm on potential trouble spots. NAHC warns that MA doesn’t always offer the same benefit as FFS Medicare. Choice and access might be compromised by tight networks, and at the same time, utilization management could gridlock patients waiting for prior authorizations.

Based on previous MA interactions in the home health space, hospice organizations are also concerned that their plan partners will put downward pressure on reimbursement and will balk at determinations of need made by care teams. Clinical recommendations and coverage designs could be at odds.

These are valid concerns that MA plans will need to address. Overall, though, hospice providers are cautiously optimistic.

Keys to success

Other keys to success for MA plans will be the reassurance that patients won’t appear to be pressured into hospice as a cost-savings tactic. End-of-life is clearly healthcare’s most sensitive issue, and MA plans must tread carefully.

At the very least, keeping the beneficiary under the same plan for all of his or her medical needs will result in better care coordination and accountability. The current situation involving handoffs between MA and FFS Medicare for non-hospice and hospice care, respectively, has been notoriously confusing and a gigantic waste of administrative resources.

What’s also a good sign is that CMMI is starting this initiative as a demonstration. There will be opportunity to refine the model before any type of national rollout. About 21 million Americans have signed on with MA plans for 2019, and their satisfaction scores remain high (J.D. Power 2018 Medicare Advantage Study). Opening up the hospice benefit makes sense, and the challenges for payers and providers can be approached with strategic alignment of goals and incentives.