What Hospices Need to Know to Be Successful With the VBID Model

The value-based insurance design (VBID) demonstration, known as the Medicare Advantage (MA) hospice carve-in, got off to a small start in 2021, but is projected to double in 2022. Its influence on the hospice industry will increase as the four-year pilot program progresses. 

Through the hospice VBID model, the Centers for Medicare & Medicaid Services (CMS) is testing MA health plan innovations designed to reduce Medicare program costs, enhance the quality of care, and improve coordination and efficiency of health care service delivery for Medicare beneficiaries.

The VBID model is a significant industry shift in how hospice agencies will be paid, moving hospice more toward value-based payment models. 

To best prepare for a transition from an industry reliant on traditional Medicare to one with emerging MA plans, McBee consultant Stavros Katsifis and I hosted a webinar to share strategies on how hospices can be successful when partnering with Medicare Advantage plans.

Here are three key takeaways from the webinar: 

1. Attendees ranked ‘contracting’ as the No. 1 VBID challenge facing their hospice, followed by ‘revenue cycle’ and ‘clinical operations’

“We understand contracting is a burden, but it’s got to be done,” says Puskarich. “Continue to work with the Medicare Advantage Organizations (MAOs) – remember they don’t have a lot of providers out there, so they have to work to get providers and learn who the strongest providers are.” 

Puskarich emphasized that contracting is not just reaching out to the payer and asking, ‘what are your rates?’ – it’s really a concerted process within your organization where everyone has a full view into the contract. “Make sure it’s accessible and that your staff isn’t making assumptions about what they need to do to in order to operate within the contract.”

Center everything on value, says Puskarich. “Understand that value is much more important than costs; outcomes and quality are what drive your value. And don’t look at risk as a four letter word – risk is something we need to embrace, because if we continue to communicate ourselves as the lowest cost provider within the healthcare paradigm, we become essential for risk success moving forward.”

2. Drive using the windshield not the rearview mirror

It’s critical to pay attention to what’s coming, notes Puskarich. “As agencies look at VBID, you need to look at what you can do, what you can’t do, can you specialize, can you not,” he says. “Value is not about your costs, but it’s about an agency’s impact on the cost of others. Quality is the great separator, so you have to keep your quality up.”

Puskarich reminds that nothing is easy as we migrate forward, so it’s important to question everything: consider clinical operational changes, think about how you schedule, continue to make specialization your friend and, most importantly, maintain an aptitude to innovate.

3. Change is coming – inaction is not an option

“Start taking steps now, rather than waiting and letting it come to you,” says Katsifis. One of the central tenants to VBID is a mentality shift away from traditional Medicare and traditional hospice care to a Medicare Advantage-focused mentality.

In addition to shifting away from a traditional Medicare approach is the introduction and expansion of a new palliative care paradigm, says Katsifis.  “I believe [palliative] can serve as a huge advantage for the industry and can start to shed some of the mentality as a loss leader it is today,” says Katsifis. The key is to collaborate with payers and prove to MAOs that palliative care can help patients and their families.

Medicare Advantage plans will continue to grow as the demonstration progresses. Katsifis  reminds the audience that change is coming and that inaction is not an option.  “There will be opportunities from this … you need to be able to make changes and stretch your comfort zones,” he says.

The VBID model is opening a new era for hospices with potential for positive opportunities. It’s important now more than ever to understand how the carve-in will impact hospice and how you can proactively prepare your operations to survive and sustain new payment changes.

Be sure to watch full webinar here to dive deeper on how to position your hospice for success.