Sustainability and Value: State Reimbursement Strategies
State health reform efforts increasingly focus on providing comprehensive and well-coordinated care to people with serious illness to improve quality of care and drive down costs. Palliative care can be an important component of these strategies, buttressed by research that finds it improves patient satisfaction and reduces costs for people with serious illness. With the advent of the COVID-19 pandemic, states may experience a heightened need for palliative care, along with budget pressures to improve value and reduce unnecessary or unwanted utilization of services.
There are a number of strategies state health officials can use as they build sustainable access to palliative care services in their Medicaid programs.
Target populations that could benefit from palliative care services:
Use data to identify Medicaid enrollees with serious illness.
Understand utilization patterns that may indicate the need for additional supports.
Make the case for improved care and reduced costs.
How palliative care supports people with serious illness:
Matt, paralyzed in a car accident, was experiencing breathing problems, anxiety, and nerve pain. After a hospitalization, a palliative care team worked with Matt to address his physical symptoms and side effects from medications, and helped him manage his stress and anxiety.
Debbie, a grandparent with multiple myeloma, worked with a doctor with palliative care expertise and a palliative care team to address pain and stress – and is now back at work at a job she loves.
Use existing billing codes to support discrete provider billing for services.
Develop a stand-alone benefit, either through a state plan amendment or incorporated into managed care contracts.
Identify existing Medicaid initiatives that would be a good fit for palliative care services, such as:
Care coordination/care management programs;
Team-based care models;
Services and supports designed for high-utilizers and/or complex populations
State Medicaid breast and cervical cancer treatment programs; and
Home- and community-based services systems.
Engage providers and other stakeholders.
Identify state clinical champions.
Encourage or support opportunities for professional education and peer learning.
Reach out to state professional and hospital associations.
Use the state’s palliative care task force as a resource.
Identify and target populations that could benefit most from services. State budgets have been especially hard-hit by the pandemic – as tax revenue has fallen, unemployment has risen, and the need for state Medicaid resources has increased. State health officials, now more than at any time in the recent past, must be able to target scarce Medicaid resources to those who are most in need and, critically, those who will benefit from interventions.
Review and analyze state data. State policymakers can use Medicaid data to help them identify populations and individuals who can benefit most from palliative care services. States can review Medicaid claims or encounter data to gain insight into:
Current utilization of palliative care-related services;
State’s high-cost/high-need population and their related conditions; and
Palliative care-sensitive service utilization.
“Utilize a method sensitive enough to identify most of the target population, but specific enough to focus on those who can benefit from supportive interventions. It is increasingly clear that any program’s ability to improve care value is critically reliant on targeting the right patients — not too many, not too few, but the right ones.” — Diane E. Meier, FACP, FAAHPM, director of the Center to Advance Palliative Care
California is an early pioneer in its support for integrating palliative care services into its Medicaid program, called Medi-Cal. The state began implementation of palliative care legislation with an analysis of state Medicaid claims and encounter data. Health officials examined the most frequent causes of death across the Medi-Cal population, and then analyzed hospital inpatient and emergency room utilization data for individuals with those diagnoses in the 18-month period before their deaths. From this data, health officials determined that individuals with cancer, congestive heart failure, chronic obstructive pulmonary disease (COPD), and liver disease had the most opportunity to benefit from palliative care services. When the benefit rolled out in the state’s Medi-Cal managed care plans, the state provided written guidance to managed care organizations (MCOs), noting that while plans could expand categories of palliative care eligibility, services for those specific diagnoses were mandatory. According to surveying conducted by the California Health Care Foundation, a majority of the state’s Medi-Cal MCOs expanded access to palliative care services beyond state eligibility requirements in some way, such as adding eligible diagnoses or expanding access for existing diagnoses.
Identify payment methodologies. Palliative care services can be delivered in a range of settings – in hospitals, within specialty medical practices, such as oncology, and as part of primary or in-home care. While the setting may change, the core services and features of palliative care consistently include a multidisciplinary team that provides additional support and coordination to individuals with serious illness. Structuring this package of services can be challenging, state Medicaid programs generally pay for discrete services, not programs, and care coordination is typically limited to specific populations that meet certain eligibility criteria. States can approach reimbursement support for palliative care in different ways:
Through existing billing codes: States may find value in ensuring that existing billing codes within their state plan are utilized effectively to promote access to palliative care services. Through its research the National Academy for State Health Policy (NASHP) has identified a range of codes that could be used by providers to bill for key palliative care services, including:
End-of-Life Counseling HCPCS (S0257);
Advanced Care Planning CPT (99497, 99498);
Home/Community Inter-disciplinary Care Team Consult CPT (99341- 99350);
Inpatient/Outpatient Interdisciplinary Care Team Consult CPT (99366, 99368);
Individual, Family, Marriage Counseling, In-Home CPT (99510); and
Respite, In-Home HCPCS (T1005).
States can avoid the need to submit a state plan amendment by identifying existing codes that support various aspects of the palliative care set of services. States that use existing billing codes may want to provide guidance to providers and explain how to use these codes to better track uptake of these services and support best clinical practices. California provided an example of billing codes associated with specified palliative care services in its December 2017 guidance.
Per member/per month (PMPM) payment: States may elect to support palliative care services through a PMPM payment – similar to how states support other population-based practice transformation initiatives that include care coordination and team-based care. Under these models, while practitioners typically continue to bill for underlying services (for palliative care, using the HCPCS or CPT codes noted above), PMPM payments could be targeted to support care coordination, team consultation, and other services that are not directly billable. Use of PMPM payments also allow states to build in eligibility and clinical requirements, ensuring that services are targeted to high-need groups that will benefit, and that care aligns with state and/or national palliative care standards.
Case rate or bundled billing: State Medicaid officials interested in supporting a comprehensive palliative care benefit could develop a case or bundled methodology. This strategy can help raise awareness of the service, enable states to develop standards and track how the service is delivered, and may allow for analysis of its effectiveness over time. Blue Shield of California, an MCO that contracts with California’s Medicaid program, has built a range of palliative care services and case rates are the most prevalent methodology used for reimbursement. A single monthly payment pays for a defined set of services, and may also include 24/7 availability. This model does not necessarily require providers to take on risk, but does encourage stratification to ensure patients are receiving the right level of care. Blue Shield offers a range of palliative care services, including:
Value-based purchasing: Over the past decade, state Medicaid agencies have designed and implemented a range of initiatives focused on value, using payment to incentivize provider behaviors that can reduce unnecessary care and improve outcomes. States may want to consider how palliative care can support these efforts:
Accountable care organizations (ACOs): Eleven states currently support Medicaid ACO models that require provider-led organizations to meet quality and cost benchmarks to share in savings. States can incorporate palliative care measures into ACO quality benchmarks in order to incentivize uptake and prioritization of these services. States can also assess the impact of palliative care on other benchmarks and adjust those accordingly. For example, individuals receiving palliative care may decide not to receive certain diagnostic or curative interventions that have a negative impact on quality of life.
Pay for performance: Pay—for-performance incentives change provider behavior by tracking and rewarding outcomes on key metrics. As an example, New York included palliative care as one of several practice improvement projects in its DSRIP 1115 waiver. Providers received bonus payments for achieving process measures indicating that certain facets of palliative care (e.g., advance care screening) were performed. While New York tied its performance improvement strategy to process measures, states could also use pay-for-performance strategies to promote structural changes within a practice (e.g., access to a palliative care team) or for outcome measures, such as improved patient satisfaction or reduced cost.
Managed care contracts: States increasingly embed value-based payment requirements with their state Medicaid managed care contracts. Currently, 31 states focus these payment incentives on performance measures related to chronic disease management – representing another opportunity for states to examine how palliative care can be sustained through common state payment and health care improvement strategies.
Aligning Palliative Care Services within Existing Medicaid Initiatives
States have a range of initiatives that focus on better managing and addressing the complex health care needs of people with serious illness. States can review these programs to determine if there are opportunities to take advantage of existing, flexible Medicaid reimbursement strategies in these initiatives to support the delivery of comprehensive, team-based palliative care.
Health homes: Currently, 27 states offer health homes as a state plan option, providing access to multidisciplinary, team-based care, health promotion, patient and family supports, and other services for individuals with two or more chronic conditions. Given their structure and uptake across states, health homes offer opportunities for states to explore how targeted palliative care services could support Medicaid populations with serious and complex conditions. California’s Medi-Cal Health Homes Program Guide has incorporated palliative care into the state’s requirements for comprehensive care management, coordination, and patient assessment.
Patient-centered medical homes (PCMH): Similarly, states have made significant investments in PCMHs, a model that features multidisciplinary teams and comprehensive, coordinated care. State initiatives often require participating primary care practices to achieve National Committee for Quality Assurance PCMH recognition to access an enhanced (often PMPM) payment. States also frequently include additional requirements, such as specific staffing configurations, a focus on integrated care, and other clinical capacity. Palliative care could also be considered in these settings. As mentioned, New York leveraged its PCMH capacity to promote palliative care through the state’s DSRIP initiative.
Care coordination/care management: Given research findings that care management can improve care and reduce cost for individuals with complex needs, many states have focused on developing robust care coordination programs to improve health system outcomes. Vermont’s Blueprint for Health, a statewide delivery system reform initiative, supports local Health Services Agencies (HSAs) to prioritize and address community health care needs through care coordination and other supports. One HSA prioritized improved access to palliative care as a driver in reducing all-cause readmissions. The HSA implemented process changes, such as increasing appropriate referral to palliative care services.
Programs for dual eligibles: Individuals eligible for both Medicare and Medicaid are some of the most high-cost and high-need individuals enrolled in state Medicaid programs. States such as Michigan and South Carolina have included palliative care services in their financial alignment demonstration program contracts for dual-eligible beneficiaries. South Carolina’s capitated financial alignment demonstration included eligibility for dual-eligible participants to receive a palliative care benefit. Dual-eligible special needs plans (D-SNPs) and Programs of All-Inclusive Care for the Elderly (PACE) also offer options to target palliative care services to dually-eligible individuals with particularly complex health needs.
State Medicaid Breast and Cervical Cancer Treatment programs: In 2000, Congress passed the Breast and Cervical Cancer Prevention and Treatment Act, which allowed states to offer treatment through Medicaid to women who are diagnosed with cancer. States may provide a limited set of benefits, or full Medicaid eligibility to women who are identified, commonly through the Centers for Disease Control and Prevention’s National Breast and Cervical Cancer Early Detection Program. The program’s focus on providing cancer treatment and supports indicates another opportunity for states to explore how palliative care can improve outcomes and reduce costs for individuals with serious illness accessing Medicaid services through this eligibility category.
Across these varied payment approaches, state officials may want to build in strategies to measure outcomes, utilization, cost, and related indicators. States can also leverage existing quality measurement initiatives and infrastructure, for example through their state’s managed care quality measurement framework, state value-based purchasing initiatives, or specific initiatives that focus on individuals with serious conditions. Additional information and resources are discussed in the Infrastructure and Promoting Quality section.
“As part of the Demonstration, Enrollees will be eligible to receive a Palliative Care benefit with a focus of pain management and comfort care. The Demonstration affords an opportunity to test whether this new benefit can optimize quality of life of Enrollees living with a serious, chronic or life-limiting illness who may not meet the hospice criteria … The benefit will provide care earlier in the continuum of illness or disease process and can be provided in conjunction with curative therapies. Treatment options may continually be explored while also honoring the enrollee’s values and preferences. (T)he benefit will be made available in all care settings including the community, nursing facilities, and assisted living facilities.”
Engage Providers and Other Stakeholders
While payment for palliative care services is critical, payment alone may not be sufficient to build capacity, ensure quality, or to create a culture shift that moves away from an exclusive focus on treatment to one that is patient-centered and concerned with quality of life. As state health officials begin the process of building (or enhancing) palliative care services within state Medicaid programs, they may also want to undertake a parallel process that engages key stakeholders by:
Identifying state clinical champions who can engage their peers in the field;
Encouraging or supporting learning opportunities and peer supports for clinicians;
Building partnerships with state professional and hospital associations; and
Using state palliative care task forces, where they exist, as partners in capacity building and public messaging.
Colorado participated in a 2020 NASHP webinar, sharing information about research the state officials had completed around building a palliative care benefit. View Colorado’s slides.
The Center to Advance Palliative Care’s payer guide contains two checklists payers can use in developing a palliative care benefit.
The Centers for Medicare & Medicaid Services Direct Contracting Model is a set of three voluntary payment model options designed to reduce expenditures and preserve or enhance quality of care for beneficiaries in Medicare fee-for-service (FFS) programs.
A recent Health Affairs article reviewed opportunities to incorporate a palliative care benefit into ACOs. Massachusetts’ ACO certification requirements stipulate ACOs must have formal referral partnerships with qualified providers to deliver palliative and hospice care.
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