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Currently the Bipartisan Chronic Care Working Group of the Senate Finance Committee is considering requiring the inclusion of the Hospice Benefit in Medicare Advantage Plans (“Plans”).  The idea for inclusion of hospice in these plans is generally credited to MedPAC, which recommended legislation to incorporate hospice into Plans in 2013.  This is a significant issue of immediate importance.

The National Association for Home Care & Hospice (“NAHC”) and the National Hospice & Palliative Care Organization (“NHPCO”) have both expressed their opposition to the required inclusion of the hospice benefit into the Plans.  This opposition is primarily based on the following:

  • Lack of choice of hospice providers by Medicare beneficiaries,
  • Plans may limit specific services from those currently offered by hospices in an attempt to reduce their payments to hospices,
  • A fragmented delivery of hospice care from the comprehensive care currently available through Medicare hospice providers,
  • Shifting of other services and the associated costs to hospice providers in order to be included in the Plan’s network of providers, and
  • Timing of the change due to the payment methodology changes implemented January 1, 2016.

The Health Group, LLC, which provides financial and consulting services to healthcare providers across the country, including hundreds of hospices, has historically supported patient choice for healthcare services.  Medicare beneficiaries who elect to be served by Medicare Advantage Plans (approximately 31% of current Medicare enrollees) generally lose much of that ability even though they may have an option to seek services outside of the Plan’s network of providers (generally for an additional cost).  Accordingly, the vast majority of Medicare beneficiaries cannot make that choice as they do not have the resources to pay the additional cost. Plans have generally proven that their cost, and accordingly profits, drive the services provided through the Plan and the healthcare providers that are selected to participate in the Plan.

Large Plans and Plans in certain geographic areas have significant power over healthcare providers, especially home health agencies (and potentially hospices).  They commonly reimburse providers less than fee-for-service Medicare with little or any control by the Medicare program over reimbursements that should be made to qualified providers.  Additionally, the Plans have limited access by their subscribers to quality providers, also with little, if any, Medicare program oversight.

Recently, January 11, 2016, an article in the Pittsburgh Post-Gazette, reports that Highmark, a leading Plan in the Pittsburgh area and across Pennsylvania, ended contracts with 10 nursing facilities and 8 home care agencies.  A representative stated, “This is actually an example of Highmark beginning to act differently, as really an integrated care and financing system”.  One of the home health agencies dropped from the network by Highmark indicated that the agency accepted a 21% reduction in reimbursement rates in 2015 (they had no choice), which was followed shortly thereafter by a notice that Highmark was terminating the contract.  A representative of a nursing facility dropped from the network stated, “we’ve worked hard to reach that four-star rating and then, here you go, we’re tossed out.  It is kind of mind boggling to me”.

We are not aware of the specific circumstances regarding the removal of these providers from the Highmark network and, accordingly, this information is not intended to be specifically critical of Highmark.  Rather, it is a reflection of the lack of control that a hospice provider may have in payment negotiations and inclusion in such Plans even though they continue to meet all hospice conditions of participation in the Medicare program.

The delivery of hospice care is substantially different from other healthcare services.  NHPCO has developed a short, but excellent presentation at http://hospiceactionnetwork.org/get-informed/issues/medicare-advantage-and-hospice/medicare-advantage-and-hospice-senate-proposal/.  Additionally, NAHC has developed an excellent position summary for your review, which can be secured at http://p2a.co/xg8HnxN.   We encourage all hospice providers to be informed and voice their opinions regarding this issue.