Carving Up the Hospice Pie: Out, In, and In and Out

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Original story posted on: July 19, 2017

According to Patti Smith, the American laureate of punk rock, “You can't carve up the world. It's not a pie.” Perhaps you cannot carve up the world but Medicare has proposed carving up—or more accurately, carving in—the hospice pie to Medicare Advantage (MA) programs.

To appreciate the potential import of carving up hospice between the MA plans and the hospice providers, you need to know that hospice ‘carving up’ is divided into carving out and carving in. Traditionally and presently, the hospice benefit has been “carved out” of MA programs. This means that when an MA patient decides to enter hospice, all payments—those for the hospice-related disease and all other unrelated diseases—revert to traditional Medicare (i.e., the hospice care is carved out of the MA plan).

In a departure from this long-standing practice of carving out of hospice care, the Medicare Payment Advisory Commission (MedPAC) has proposed that MA plans assume both the clinical management and financial responsibility of the hospice benefit, essentially ‘carving-in’ hospice under MA. This change raises concerns for both MA plans and hospice programs. But most crucially of all is the concern of insuring the best possible end-of-life care for the terminally ill Medicare patients.

Unsurprisingly, whether or not carving in hospice into MA programs will compromise or contribute to optimal end-of-life care is contentious. A large hospice advocacy group, The National Hospice and Palliative Organization, contends, “Based on hospices’ experience with private commercial insurance and Medicaid managed care, we are gravely concerned that the proposal would negatively impact beneficiaries, hospices, and the Medicare.”1

In addition to noting that MA contracts may not cover hospice’s cost and that present carve-out system is working effectively, the group expressed several specific concerns. It would:

  • Limit beneficiary choice of hospice
  • Dilute the quality of the hospice benefit
  • Undermine the autonomy of the hospice’s medical director
  • Increase the administrative burden for hospice providers
  • Threaten the financial stability of hospice programs.

In response, the MA insurance industry has contended that by integrating financing and delivery models both patient care and value will be improved. Such models would benefit patients with advanced end-stage disease by allowing hospice and palliative care to be integrated at any point in the patients’ disease trajectory rather than being segmented from the rest of care and being prognosis dependent.

Additionally, MA plans point out that approximately 33 percent of all Medicare hospice enrollees come from their rolls. So, MA plans note that the present carve-out system represents an exception to Medicare’s developing efforts to integrate healthcare services across the disease continuum.

Last February, the Bipartisan Chronic Care Working Group of the Senate Finance Committee issued a Policy Options Document that indicates the group is considering instructing MA plans to offer the hospice benefit as part of their package of services. However, important differences in how hospice would be financed under carving in remain. Presently, hospice is a capitated Medicare benefit in which the hospice team, the patient’s doctor, and the patient coordinate a plan of care. But under a carve-in approach the MA plans would drive the hospice planning and oversee the end-of-life care.

This has raised concerns since MA plans can charge different out-of-pocket expenses and have different rules for how patients get services. This is in contrast to the per-diem hospice payment rate for all care deemed reasonable and necessary to palliate the suffering of a terminal illness. At issue is whether this proposed change might potentially lessen the role of clinicians with the most expertise in hospice care.

As the hospice carve-in moves from the present discussion to the possible decision, some vexing worries remain unaddressed. Patient advocacy groups want to see more transparency about insuring MA plan accountability to insure quality end-of-life care. The Senate Finance Committee is being pressed to specifically address how “out-of-network” hospice services will be dealt with by MA plans.

So, at this moment the carving up of the hospice pie into carving-out and carving-in pieces is both confusing and contentious but Medicare may not be done carving just yet. They are considering carving up hospice pie into a third piece: carving in and carving out!

Under this plan, MA beneficiaries who meet hospice eligibility standards may “disenroll” from their MA plans and enroll in traditional Medicare hospice if they feel their end-of-life care needs are not being satisfied. While the carving in and out choice is intended by Medicare to preserve beneficiaries’ freedom of choice for end-of life care, it may have only added to the discomfiture and concerns.

So, while carving up of Medicare hospice services has engendered some disconcerting confusion, some uncertainties remain. It is certain that the prevention of unnecessary suffering of the terminally ill is the ultimate goal of hospice care. It is certain that to meet this goal hospice care must be readily available and easily obtained. It is certain that there should be no confusion about this goal and the hospice care needed to achieve it. It is certain that those caring for the dying have as their priority the care of the dying. Medicare’s carving obligations are first and foremost to carve out the confusion and carve in these certainties for its beneficiaries in need of the final Medicare benefit: hospice care.

Death is life’s surest guarantee and just as surely it is the right of those dying to be comforted. Medicare cannot prevent death but it is obligated to ensure that dying occurs without suffering. 

Whether hospice is carved in or out, the right of the dying not to suffer unnecessarily must be unambiguously respected and preserved.

Michael A. Salvatore, MD, FACP

Dr. Michael Salvatore was a pulmonary medicine/critical care physician for 35 years. Since 2012 he has been the physician advisor and medical director of the palliative care team at Beebe Healthcare in Delaware. After earning his MD at the University of Arizona, he trained in internal medicine and PULM/CCM at Duke University. Dr. Salvatore is a member of the RACmonitor editorial board.

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