By now, we are all familiar with the concepts of value-based care and the transition away from a payment system built primarily on a fee-for-service reimbursement methodology to a patient centered model that focuses on coordinated, high quality, and lower cost care. In fact, Centers for Medicare & Medicaid Services (CMS) continues to remind us that it expects all Part A and B Medicare beneficiaries to be in a care relationship with accountability for quality and total cost of care by 2030. While a lot of attention is paid to the models focused on primary care attribution, such as the accountable care organizations involved in shared savings models, CMS is also examining value-based care models at two other points along the care continuum: home health and hospice.

Expanded Home Health Value-Based Purchasing Model

The Expanded Home Health Value-Based Purchasing Model seeks to address the fragmentation that exists in a fee-for-service payment system for Medicare beneficiaries with multiple chronic health needs who are eligible for the home health benefit. Fragmentation is generally blamed for more emergency department visits, more hospital admissions, and more care provided in skilled nursing facilities. The Calendar Year 2016 Home Health Prospective Payment System final rule implemented the original Home Health Value-Based Purchasing Model in nine states. This was an effort to incentivize higher quality, more efficient care, while studying appropriate metrics to measure such care delivery and enhance public reporting of the results. The participating home health agencies in these states were measured on value, with payment tied to quality performance via fee-for-service adjustments, positive or negative, over the course of the multiyear year program. These adjustments ranged from a maximum of three percent in 2018 to a maximum of seven percent in 2021. The average 4.6% performance score improvement prompted an expansion of the model in 2022 to all 50 states, with 2022 being a pre-implementation year to get ready for the 2023 launch. 2023 is the first performance year, and the results will impact 2025 payments.

Performance under the model looks at five OASIS-based measures (i.e., Improvement in Dyspnea; Discharged to Community; Improvement in Management of Oral Medications; Total Normalized Composite Change in Self-Care; Total Normalized Composite Change in Mobility), 2 claims measures (Acute Care Hospitalization; Emergency Department Use without Hospitalization), and 5 HHCAHPS survey results (Professional Care; Communication; Team Discussion; Overall Rating; Willingness to Recommend). An agency's performance on these measures is measured against its peers to determine the payment adjustment, which beginning in 2025, will range from a 5% increase to a 5% decrease. It is important to note that commercial payers are also looking to change their reimbursement mechanisms to align with the CMS initiative.

Hospice Value-Based Insurance Design (VBID) Model Expansion

In 2021, CMS began testing the inclusion of the Part A Hospice Benefit within the Medicare Advantage (MA) benefits package through the Hospice Benefit Component of the Value Based Insurance (VBID) Design Model. By doing so, CMS is able to evaluate whether there was any impact on the delivery of hospice and palliative care as well as the quality of that care. At present, when an enrollee in an MA plan elects hospice, traditional Medicare becomes financially responsible for most services, while the MA plan provides supplemental benefits. Under the Hospice Benefit Component of the VBID Model, the MA plans retain responsibility for all traditional Medicare services, including hospice care. In 2023, 15 Medicare Advantage organizations will participate in the Model across 25 states. Hospice providers wishing to participate will need to contract with the plans in their service area. If they do not, they will be paid as they normally would under traditional Medicare. It is important to note that the plans cannot require prior authorization, and plans may incorporate palliative care should they choose to do so. 2023 also introduces health equity into the equation. Plans that voluntarily comply with the Hospice Benefit Component must prepare health equity plans that detail how they will address, among other items, disparities in access and outcomes.


Value-based care delivery continues to impact a greater piece of the care delivery continuum and shows no signs of slowing down. Home health and hospice providers are included in the payment transformation process. They can position themselves for success by being familiar with CMS program models and requirements and by ensuring commercial contract negotiations are optimized for sustainable reimbursement over the long term.