The Hospice Medicare Carve-In, A good thing or bad thing?

What the heck is a Carve-in?

It is the opposite of what Hospice providers have enjoyed for the past many years - the Carve-out!  Currently, Medicare beneficiaries who have Medicare Advantage (MA) Plans revert to traditional Medicare when they elect the Medicare Hospice benefit - thus, they are “carved-out” of MA plans, and hospices are reimbursed like traditional Medicare Fee for Service. 

Let’s review the current way Hospice is reimbursed by Medicare.

The Medicare Advantage Carve-in Demonstration Project began in 2021 and the long-awaited expectation for Hospice to be  “Carved-In” and become part of Medicare Advantage plans has begun. This is part of CMS’ expansion of the MA Value-Based Insurance Design (VBID) model.

How does this affect me, a hospice leader or team member?

There will be bedside challenges to overcome and processes to put into place to deal with this new reimbursement system and the increased oversight by insurance providers.  These changes will impact at least HALF of all Medicare beneficiaries.

(Recent projections indicate that between 50% - 60% of Medicare beneficiaries will soon be enrolled in a Medicare Advantage plan.  Examples of MA Plan providers include:  Humana, United, Cigna, Aetna, Kaiser, BCBS, etc.)

Here's what becomes important when the Medicare Hospice Care-In happens

• Take notice of insurance coverage requirements – all Medicare patients will not be treated like traditional Medicare hospice beneficiaries anymore
• Be in frequent communication with the MA Plan’s hospice case manager
• Have a system and people in place to get needed insurance authorizations timely
• Be sure documentation supports the need
• Understand that the MA Plan is a very important customer

To answer the question posed at the beginning – The Medicare Advantage Carve-in is a new hospice Reimbursement model that will require some major rethinking of our processes, our communication, and our expectations.

Be at the negotiation table with MA Plan administrators NOW & as soon as possible during this demonstration phase to ensure we have a place in their networks.  This is one of the very reasons that Teleios Collaborative Network exists – to bring negotiating power and influence to these conversations and inclusion in MA Plan contracts.

In addition, we must consider the risk of a reduction in our reimbursement rates as the MA Plans contract with hospice providers.  VBID contracts will require high quality outcomes, increased effectiveness, and will pay based on service utilization and quality outcomes.  

The looming Medicare Hospice Carve-In:   “Who knows what is good and what is bad.”  But one thing is almost certain, it will change how we approach the important mission & business of hospice.

Chief Clinical Operations Officer & Coach

Medicare Advantage, a fast-growing alternative to original Medicare, is run primarily by major insurance companies. The health plans have enrolled nearly 27 million members, or about 45% of people eligible for Medicare, according to AHIP, an industry trade group formerly known as America’s Health Insurance Plans.

Phillips foresees the 26 million current beneficiaries of Medicare Advantage eclipsing the 30 million mark this year as indicated by recent industry research. "That puts MA on the cusp of representing 50% of all Medicare coverage options -- a milestone our industry wasn't predicting until 2025," he said.  PITTSBURGH, Jan. 11, 2022 /PRNewswire/ -- Medicare Advantage (MA) may soon represent the majority of all Medicare membership according to Patrick Phillips, CEO of Cavulus, a leading provider of technology serving the Medicare Advantage industry. 

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