From Tom's Desk

Beware the carve-in. It could cost you significant money and damage an excellent tool for your Medicare Advantage success--hospice.

Right now, once your Medicare Advantage patient is on hospice, all the costs associated with their terminal illness are borne by the hospice provider, not by your risk pool.

Instead you pay a small capitation, usually less than $50 per month, for those services. It’s an incredible tool to control costs at the end of life.

Well, this tactic may be about to expire-- -and then you’ll have to use hospice much more judiciously.

In 2014, CMS recommended hospice services be allowed as a Medicare Advantage benefit.

No action has yet been taken, put private equity has been buying up both hospice providers and their market share in anticipation of the day the hospice benefit is approved.

Here’s the problem. When hospice services are allowed to be a “carve-in,” (i.e. an allowed benefit to be paid out your monthly capitation like any other health expense) the full cost of hospice services, sometimes as much as $500/day, will come out of your pocket, not Medicare’s.

Those venture capital firms aren’t angling for the government’s money, they’re angling for yours.

When you signed up for Medicare Advantage as a provider through a risk-share, you signed up to accept the financial risk of your patient’s care.

And if CMS decides that care includes hospices services, you’re going to have to pay for them.
They will pull every B-school trick in the book to dip their beak in your risk pool.

They will use the data you enter into the electronic health record to recruit these patients into hospice-- -not to save you money, but to keep a bigger piece of your risk pool for themselves.

And don’t look for CMS to increase your capitation to offset these costs either. They won’t.

Last month, CMS allowed home care services to be a Medicare Advantage benefit beginning in 2019, and the private equity gold rush has already begun.

Home care companies are already being courted by venture capital firms hoping for a payday out of your risk pool.

How much did CMS increase capitation to compensate for these increased costs?

Not one dime.

Your tactic for success?

Continue, for now, to use hospice as a risk reduction tool. It’s one of your 12 key tactics for Medicare Advantage Mastery.

And begin educating your patients regarding the new home care benefits coming their way in 2019.

Emphasize their limited availability and the restrictions on their use.

Remind them of the downsides of having a stranger in their home.

You have to do this now because home-care services are going to be aggressively marketed at your patients come open enrollment time.

And once hospice is an allowed benefit, your seriously ill patients are going to have those services marketed at them as well-- heavily, day-in and day-out without any ethical consideration about their medical conditions or circumstances.

When they enroll in hospice and begin to incur its extravagant expense, you can kiss your hard earned revenue from their capitation good-bye.

Use this new home care benefit as a laboratory to see which counter-marketing tactics work in your patient population and which don’t.

File them away against the day you might have to use them for hospice.

Home care expenses are real but not huge. They won’t break your pool.

Without preparation on your part, a hospice carve-in will.

You Should Know

Transportation was among the definitions of supplemental benefits that were broadened in the 2019 Call Letter released by CMS last month.

That unlocks a lot more potential opportunities for you to innovate.

Medicare Advantage has offered a transportation benefit for two decades.

Executed through contracted vendors, patients usually find them unreliable, unpleasant and, occasionally, unsafe.

Are you ready to excel? Grab a copy of my book!

Buy Now
Copyright © 2018 Tom Davis Consulting, All rights reserved.

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