Hospice Remains Underserved by Medicare Advantage, Data Shows

While the Medicare Advantage space grows bigger, it is difficult for regulators and the medical industry to decide how best to integrate hospice into MA programs. This is a major concern because hospice care is the only segment of the healthcare sector that isn’t catered for in Medicare Advantage (MA). This is despite the fact that at least one-half of enrollees to MA programs require hospice care.

A recent announcement that an experiment to test the inclusion of hospice in MA plans is coming to an early end due to limited insurer interest and operational challenges has raised several questions.

It should be noted that when a beneficiary of an MA program makes the decision to go into hospice, the traditional Medicare program pays the bills of the care they need after being diagnosed as being in the terminal phase of their illness. Agrace Hospice’s CEO Lynne Sexten says this situation makes it extremely complex to navigate insurance in situations where those people require medical services that are unrelated to the medical condition that put them in hospice, and this impacts a lot of people.

Almost 50% of all individuals (1.7 million) on MA programs that succumbed to their terminal illnesses in 2022 were recipients of hospice services.

Experts opine that the current challenges faced by the MA program in covering hospice stem from decades ago when private provision of Medicare services was turned into a permanent feature of the healthcare system. At the time, the dearth of data on hospice care made it hard for Medicare officials to figure out the costs associated with hospice care.

In 2021, a decision was made for Medicare to enter contracts directly with entities providing hospice care. The intention was to cut hospice costs while making it possible for individuals to seamlessly make the transition from traditional MA services to end-of-life care. The health plans that opted to participate in this experiment also provided transitional and palliative care, such as chemotherapy and dialysis on a temporary basis.

Just a year after it was revealed that this experiment would continue until 2030, an abrupt decision to end the experiment in December 2024 was made. The reasons given for this change of plan was that few insurance providers warmed up to the idea. MA providers were glad the program was halted because they had always complained that there were delays in being reimbursed by insurers and that it was onerous to complete the needed paperwork prior to submitting insurance claims.

It now remains to be seen what the next steps will be to ensure that MA patients can receive the hospice care they need once they are diagnosed as being in the terminal stage of their illnesses. MA plan providers such as Astiva Health also have some thinking to do in order to avoid leaving out a significant proportion of patients who require Medicare services.

NOTE TO INVESTORS: The latest news and updates relating to Astiva Health are available in the company’s newsroom at https://ibn.fm/Astiva

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