The First Year of Hospice VBID Is the Hardest for Payers

Hospice News | By Jim Parker

Implementation of the Medicare Advantage hospice carve-in has been challenging for both payers and providers, though a recent analysis indicates that it may get easier over time.

The U.S Centers for Medicare & Medicaid Services (CMS) commissioned the RAND Corp. to conduct the analysis of the program, formally called the hospice component of the value-based insurance design model (VBID). CMS launched the carve-in in 2021. The RAND analysis released this week covers the calendar year 2022.

The results suggest that the first year of participation is the hardest for both payers and providers.

“Hospices and new insurers reported substantial implementation challenges, but insurers with more than one year of experience with VBID reported fewer challenges, suggesting that implementation is becoming easier over time,” CMS indicated in a fact sheet.

In 2022, 13 insurance companies offered hospice VBID benefits through a total of 109 health plans. For more than half of these plans, 2022 was their first year of participation. The payer participants tended to be large national organizations with higher average plan enrollment, according to CMS. 

Payer companies reported greater challenges in 2022 than those who participated in 2021, according to the RAND report.

Among the top roadblockss for payers was the need to build out a network of hospice providers and development of payment contracts with those agencies. Another difficulty was the retooling of some administrative processes, including claims processing.

Hospice participants likewise encountered challenges when it came to claims processes as well as plans’ adjudication of denied claims, which they found to be time consuming and resource intensive. They also indicated that their payments from MA plans were often delayed, which put constraints on their cash flow.

However, hospices also reported that things became easier in their second year of participation compared to their first, CMS indicated…

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