CMS is expanding a national pilot program (the Value-Based Insurance Design Model, or VBID) that will allow Medicare Advantage (MA) plans for the first time to include hospice (end of life) coverage in plan designs. Since the inception of Medicare Part C, MA plans have “carved out” hospice care, leaving plan enrollees to receive end-of-life care under traditional Medicare Part A. Demonstrating the administration’s willingness to test innovative, value-based models to reduce cost, CMS is moving forward with a pilot that will allow eligible MA plans in all 50 states and territories that apply to the pilot to participate in various VBID programs—a significant expansion of the initial seven state VBID models that tested certain other VBID interventions (adding an additional three states in 2018).

Many hospice providers thought that additional study and data analysis would better inform the eventual inclusion of a Medicare hospice carve-in with a resulting delay for at least another few years. But with an increasing number of beneficiaries opting out of traditional Medicare and enrolling in MA plans, and with the growth in Medicare hospice expenditures, it appears that a hospice carve-in will arrive sooner than many had anticipated, at least in the testing phase. Beginning January 1, 2021, the VBID model will be expanded to test the inclusion of the Medicare hospice benefit in MA. CMS plans to release additional information and guidance on the hospice carve-in pilot through its VBID model website and through open-door forum events.

Participation by the hospice industry and the health plans in these open-door meetings will be critical for the broad airing of concerns on both sides. The hospice organizations, many of which have little contracting experience with MA plans, in-network provider contracting, or MA plan prior approvals and other coverage limitations, will certainly have many concerns to discuss. On the other side, MA plans have little actuarial experience with end-of-life care for the terminally ill outside of a curative, acute care model. The Medicare hospice benefit, similar to PACE, is a rather holistic benefit to provide comfort care for both the physical and psycho-social benefit of patients and their families that also includes mandatory use of volunteers and other benefits (including bereavement care). Embracing such palliative care in a manner that works for MA plan enrollees may require some outside-the-box thinking.