Explaining the Newly-Released Medicare Advantage “Carve-In” Model

Updated March 5, 2020 | By Torrie Fields and Allison Silvers

Medicare Advantage Plans have option of covering hospice benefits, with guardrails to smooth transition for first two years

The Center for Medicare and Medicaid Innovation (CMMI) released its Request for Applications (RFA) for the Medicare Advantage (MA) hospice benefit “carve-in” model on December 19, 2019. The model will run from January 1, 2021, to December 31, 2024.

The model will test three things, as stated in the RFA:

  • “the impact on cost and quality of care when one entity – the participating Medicare Advantage organization (MAO) – is financially responsible and accountable for managing its enrollees’ full continuum of care, including hospice”;
  • “the impact on payment and service delivery of incorporating the Medicare Part A hospice benefit with the goal of creating a seamless care continuum in the MA program for Part A and Part B services”; and
  • “how MAOs can best identify enrollees in progressive and significant decline and then make comprehensive palliative care services outside the hospice benefit…available to them.”

MA plans interested in participating in the model must submit applications to CMMI by March 16, 2020. There are no requirements for MA plans to participate and no geographic restrictions on applications. Plans are expected to publish their initial hospice provider directory in October 2020. CMMI is not expected to open up an additional application period.

Importantly, the model keeps the hospice payment model and benefits intact for the first two years, and adds requirements for additional services to be provided to people with serious illness in advance of electing to receive hospice benefits.

The model requires both plans and hospices to follow all existing Medicare hospice requirements and adhere to current payment levels, including preserving the current four levels of care (routine home care, continuous home care, general inpatient care, and respite care).

Similarly, beneficiary eligibility – including certification by two clinicians of a terminal illness with a prognosis of six months or less and the beneficiary’s right to elect and revoke the benefit – also remain as is. Beneficiaries’ need to waive benefits for disease-modifying treatment is being modified to allow one month of concurrent care (see more below).

Beneficiaries’ need to waive benefits for disease-modifying treatment is being modified to allow one month of concurrent care. The hospice carve-in model allows one month of coverage overlap, and MA plans participating in the model are permitted to define which services they will cover concurrently with hospice care.

For the model’s first two years, plans must pay current original Medicare hospice rates to both in-network and out-of-network hospices. It will be important to monitor the adequacy of beneficiary protections and quality of care after this initial two-year period.

Key Requirements

The model includes three key requirements that may significantly advance access to early palliative care for Medicare beneficiaries with serious illness:

  1. Provision of advance care planning for all enrollees with serious illness. This applies to all MA plans participating in any aspect of the broader value-based insurance design (VBID) model, not just the hospice carve-in.
  2. Provision of “access to timely and appropriate palliative care services for their enrollees.”
  3. Provision of transitional concurrent care, enabling some “curative” (disease modifying) treatment to continue once hospice benefit coverage has begun for a period of one month

Concurrent care is a significant change from current policy, under which Medicare beneficiaries who elect to receive hospice benefits must waive all rights to Medicare payment for services related to treatment of their terminal condition. The hospice carve-in model allows one month of coverage overlap, and MA plans participating in the model are permitted to define which services they will cover concurrently with hospice care.

For example, a plan may stipulate that palliative radiotherapy, but not radiotherapy with curative intent, will be covered concurrently with the hospice benefit. Because each plan defines its own covered concurrent care benefits, the implications of this change for the Medicare beneficiary population are difficult to understand at this time.

When Medicare Advantage (MA) plans — private healthcare plans that cover all Part A and Part B Medicare benefits for their enrolled beneficiaries —were created in the 1990s, two services, renal dialysis and hospice care, were “carved out” of the package of essential health benefits that the new plans were required to provide. When a member of an MA plan became eligible for one of these services, that benefit was covered by original Medicare fee-for-service program.

In 2018, renal dialysis was “carved in” to the MA program. Medicare Advantage plans are now required to cover dialysis and to maintain a network of dialysis centers and kidney specialists. This change left the Medicare hospice benefit as the last service to be carved out of the MA program.

Since 2014, the Medicare Payment Advisory Commission, a body that advises the Congress on Medicare policy, has been recommending the inclusion of hospice in the MA benefit package, advancing an integrated and coordinated benefit package.

Due to the vulnerability of the population eligible for the Medicare hospice benefit, CMMI worked closely with a wide range of stakeholders — including health plans, hospices, and legislators — before proposing the model to test the “carve-in” of hospice benefits.

Beneficiary Access to Hospice

Because hospices have to date not been part of MA networks and the relationship between these two entities is new, CMMI has created a “glide path” to ensure enrollee access to hospice care and enable network relationships to be built. Most importantly, as noted above, MA plans must cover hospice care provided at both in-network and out-of-network hospices at current Medicare hospice rates for calendar years 2021 and 2022.

MA plans participating in the model are prohibited from using prior authorization or any utilization management process that interferes with timely access to hospice services. The model also includes provisions to ensure that participating MA plans pay their hospice care providers within timeframes established for all other providers. These measures are included to ensure that the model does not delay access to or payments for hospice care.

CMMI will monitor the model across a variety of quality and access measures. These outcomes include:

  • documentation of goals of care,
  • rates of hospice utilization shorter than 7 days and longer than 180 days,
  • rates of pain control,
  • family experience of care and perception of 24/7 access, and
  • days at home during the last 6 months of life, a measure under development for use in this model as well as the Seriously Ill Population model and the Direct Contracting High Needs Population model.

Opportunity to Develop Relationships

Hospices may participate in the model only by working with local MA plans that may be participating in it. Hence, this new model offers opportunities for both hospice and palliative care providers to develop relationship with MA plan(s) in their communities. The parties are encouraged to consider innovative and alternative payment models for non-hospice (palliative care) services and for the latter two years of the model. Hospices can review CAPC’s Payment Quick Tips: Introduction to Value-based Payment, and the broader value-based payment toolkit to learn more.

The model also offers Medicare Advantage plans the flexibility and support to develop new processes and structures that can improve care for all of their beneficiaries with serious illness, whether or not they are eligible for or elect to receive hospice benefits. Plans participating in the hospice carve-in and in the Value Based insurance Design initiative (VBID) in general will need to support advance care planning, proactively identify their members with serious illness and connect them to palliative care services, and support hospice decision-making. This creates opportunities to better utilize plan-based case management and other existing services and processes; CAPC’s Serious Illness Strategies and the more detailed health plan and case management toolkits may be useful.

For more information about the VBID model and the hospice benefit component, visit the CMMI website. Additionally, the National Hospice and Palliative Care Organization’s statement about the release of the hospice care carve-in model is available here.

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