Hospice Is Where Value-Based Medicine Begins and Ends

Hospice, as we understand it in the U.S. healthcare system, is a Medicare benefits package. Patients, who have Medicare Part A, qualify for the benefits if they have a life-limiting illness, have waived further curative care for it, and have two doctors certifying that their life expectancy is six months or less. This certification typically follows established guidelines based on clinical decline, functional and burden of illness indicators, and disease-specific criteria. All are governed by the local coverage determination (LCD).

Hospice care is rooted in value-based medicine. With its focus on improving the quality of life and wrapping services around the patient at home, hospice care can reduce the cost and utilization of resources that are wasteful and misaligned with the patient's goals and values. Typically, it is those downstream expenses in the emergency departments and hospital stays. To that end, hospice is one of the earliest CMS-capitated payment models. It was passed by Congress in 1985 with the premise of giving Americans a dignified death at home. All the risk-bearing organizations: managed care MCOs, accountable care ACOs, or physician practices in capitated payment contracts, must take notes, learn from and find ways to align with hospice services.

The hospice interdisciplinary team IDT deploys a whole-person approach to a patient with a multitude of medical, functional, social, psychological, and spiritual needs. They are focused on allowing them to live the best life they can ahead, optimizing and stabilizing their current state. They are accustomed to co-managing and collaborating with the primary care physician and the specialist. The hospice physician allows a space for the PCP to manage and preserve the pre-existing relationship with the patient. They step in and take control when there is an acute change of status or when the matter is within the purview of managing the terminal illness. The hospice care managers are clinicians who practice care coordination on a daily basis with parties across the continuum. The hospice clinicians have truly mastered the PCP wrap-around model, and any risk-bearing entity or managed care startup can learn a lot from the way they have operationalized the model.

As the medical community embraced a simultaneous model for hospice and palliative care, one in which palliative services are provided concomitantly next to curative care along the trajectory of the chronic illness, there is still so much gain for the patient to realize from expanding coverage and removing the walls around hospice benefits. Integrating palliative care and hospice with primary care or major specialties is still lacking. Third-party palliative care programs are hard to influence outcomes without a relationship with PCP and without a handle on prognosis that can often be driven by the specialist. The rigidity around qualifying for the benefits can lead to delay in enrollment and to an average length of stay on hospice measured only in days. This abrupt transition from an all-curative approach to an all-palliative one is also anxiety-provoking to a patient already struggling with losses. The transition and the loss of relationship with the existing providers can be abrupt and add more complexity to their coping abilities.

Some hospices tried to go upstream and established bridge programs. But we still need to further integrate hospice and palliative care in primary care and to start earlier on the trajectory of illness. 

We need to avoid depriving patients of the whole person care of the hospice team at a time when they need it the most and while they are still trying to answer major existential questions and navigate complex life and death-decisions. It would be really wonderful if reimbursement policies and regulations helped us position hospice and palliative care earlier on the trajectory as an added benefit to starting some of those critical conversations early on.

The other barrier to expansion from the patient's perspective is the different methods of reimbursement for the different services at the end of life. Medicare beneficiaries are increasingly receiving their Medicare benefits through a managed care organization MCO instead of straight Medicare. Hospice benefits are not delegated to the MCOs. In other words, if at some point on the trajectory, the patient became appropriate for hospice care per Medicare's definition, then the patient can opt-in for hospice benefits to cover the life-limiting illness while maintaining their MCO enrollment for all the non-life-limiting illnesses-related expenses. Medicaid pays for hospice. It also pays for additional home aid hours that Medicare may not pay for.

The general rule around physician reimbursement is that if the service is related to a life-limiting illness, then hospice will absorb it. But if it is not related, then straight Medicare with copayments or a secondary managed care MCO plan will cover it. Physicians' services coverage can be confusing since a designated community-based 'Attending physician' should offer services related to the life-limiting diagnoses and directly bill Medicare B. Or if the hospice physician is the 'attending physician,' then they would bill Medicare through hospice. Consulting physicians shall enter into a contract with hospice if they are involved in a life-limiting illness. Other consulting physicians can bill Medicare B directly or the MCO for non-terminal illness-related expenses.

And so, given all the above, it would seem cumbersome for a patient and a family to navigate this fragmentation during the stressful dying phase. We need policies to support such integration in reimbursement, a fully integrated product in which the terminal illness needs (hospice care) and every other illness needs (secondary coverage) are covered from the same pool. The interaction between illnesses and their impact on a whole does not follow our reimbursement logic.

Given the fact MCOs are now an important vehicle for delivering value-based care, there is a great synergy and alignment between them and hospices in managing quality, cost, and utilization of the shared patients. Promoting good dying and good death is good medicine and a good business strategy. Providing what matters most to the patient and the right care will inevitably end up focusing attention and investment on lower-cost sites such as someone's own home, where Americans have traditionally favored dying. Aligning with hospices is also a good business strategy for membership engagement and expanding access, eventually enabled by the right policies.