Government
Paying for Palliative Care
“Palliative care is supported by a robust body of research. For purposes of Medicaid guidance,…
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“Palliative care is supported by a robust body of research. For purposes of Medicaid guidance, the state developed a Medi-Cal palliative care policy with specific definitions of eligible conditions, services, and providers. A number of health plans, hospitals and health systems, and other providers had already incorporated broader palliative care principles and strategies into their models of care. The state encourages those broader strategies to improve patient satisfaction and outcomes at all stages of life and illness.”
– Anastasia Dodson, Deputy Director, Office of Medicare Innovation and Integration, California Department of Health Care Services
Reimbursement is often cited as a barrier to availability of palliative care. Not all payers will pay for palliative care services. In addition, palliative care is delivered by an interdisciplinary team. While some members, such as physicians, of a palliative care team can usually bill payers for their services, others, such as chaplains, often cannot. Further, some palliative care services, such as care coordination, are often provided outside of a face-to-face visit. States have begun to address these payment barriers by covering palliative care services in their Medicaid programs or establishing a state-funded program to pay for the service. These states have covered palliative care in Medicaid as a state plan benefit, under a home and community-based services (HCBS) waiver, and through Medicaid managed care. Some are also testing alternative payment models designed for team-based care.
Palliative Care: A State Resource Guide
California: Medicaid Managed Care
California’s Medicaid program (Medi-Cal) began covering palliative care services for children in 2008 under a now-terminated HCBS waiver. One purpose of the waiver was to serve as a pilot to enable the state to evaluate whether palliative care services should be offered by Medi-Cal more broadly. Building on this experience, California enacted Senate bill (SB) 1004 in 2014. This law required the state’s Department of Health Care Services (DHCS), which administers Medi-Cal, to “establish standards and provide technical assistance for Medi-Cal managed care plans to ensure delivery of palliative care services.” Further, DHCS was instructed to design the coverage to ensure the new services would be cost-neutral on an ongoing basis. Limiting the SB 1004 services to managed care enabled Medi-Cal to implement the new services without obtaining a waiver or amending its Medicaid state plan. California also covers palliative care for children as an EPSDT (Early and Periodic Screening, Diagnostic and Treatment) service. As discussed later in this section, Washington offers another example of that approach.
To ensure it met the cost neutrality requirement, DHCS developed criteria that managed care enrollees would need to meet to qualify for SB 1004 palliative care based on an analysis of cause of death data and hospital inpatient and emergency room utilization. Based on this analysis, Medi-Cal required MCOs to deliver palliative care only to certain individuals with advanced cancer, congestive heart failure, chronic obstructive pulmonary disease (COPD), and advanced liver disease. Enrollees with these diagnoses must also meet additional criteria. There is both general criteria that all seeking the benefit must meet (e.g., death within a year would not be unexpected based on clinical status) and specific criteria for each condition (e.g., those with COPD must have a 24-hour oxygen requirement of greater than or equal to three liters per minute). MCOs must cover palliative care for all their enrollees who meet these criteria but may opt to also offer the services to others. According to a survey conducted by the California Health Care Foundation (CHCF), most of the state’s MCOs chose to expand access.
Medi-Cal has identified specific billing codes that palliative care providers serving fee-for-service beneficiaries can use to receive payment from the Medi-Cal program. Payments vary by code and are maintained in Medi-Cal’s fee schedule. Medi-Cal does not require MCOs to use a specific payment model. Rather, it requires them to meet performance standards and report information that Medi-Cal can use to monitor provision of palliative care. Per a survey conducted by CHCF and the Compassionate Care Coalition of California, MCOs and providers most often agreed to a uniform per member per month (PMPM) payment. Some added incentives, such as a reporting or patient engagement incentive, to their PMPM payment.
California: Medicare Dual Eligible Special Needs Plans
California’s 2024 guidance to Medicare Advantage Plans that wish to serve individuals eligible for both Medicare and Medicaid (referred to as dual eligible special needs plans or D-SNPs) binds these plans to the same requirements as MCOs for coverage of palliative care services. The guidance specifies how a plan’s interdisciplinary team and individualized care plan should integrate the palliative care team and palliative care services. (Under federal rules all D-SNPs must have a contract with a state’s Medicaid agency.)
Washington: EPSDT benefit
Washington Medicaid pays for pediatric palliative care (PPC) services provided by hospice providers. Washington has federal authority to cover the service as an early periodic screening diagnosis and treatment (EPSDT) service in its Medicaid state plan (see page 16). (EPSDT services are only available to Medicaid beneficiaries under age 21.) Washington defines the coverage in regulation and details it in a billing guide. Providers wishing to offer PPC must be licensed as a hospice provider and receive approval to provide the palliative care service from the Medicaid agency. To qualify for the service, children must “have a life-limiting medical condition with a complex set of needs requiring case management and coordination of medical services.” Further, the case management/care coordination must be needed for specific reasons, including a medical condition with which the family is unable to cope.
Children may receive up to six PPC contacts each month. These contacts are defined as up to two hours of care coordination/case management or one home visit by a registered nurse, social worker, or therapist. The Medicaid agency may authorize more than six contacts in some circumstances. The Medicaid fee-for-service system pays for these services under a single revenue code (0659). The amount paid for that revenue code varies by the location of the child’s home and, effective October 2022, ranges from $77.91 to $88.95. Washington Medicaid contracts with MCOs to deliver most services (including PPC) to most beneficiaries. Children enrolled in an MCO must obtain PPC services from their MCO.
Hawaii: Medicaid State Plan Benefit
In 2022, Hawaii Medicaid sought approval of an amendment to its state plan that would enable the Medicaid agency to pay for palliative care services delivered in the community. Upon approval of the state plan amendment (SPA) the services would be available to Medicaid beneficiaries with a serious illness who meet criteria established by the state. The new palliative care services include, but are not limited to, four distinct services:
- Care plan development and implementation
- Clinical services provided through an interdisciplinary team
- Comprehensive management
- Care coordination and communication
Qualified palliative care providers will be paid a bundled payment. Providers will also receive payment for some additional services, such as an initial assessment. Before submitting the SPA, Hawaii Medicaid convened a virtual summit to gather feedback on the services’ proposed beneficiary eligibility criteria, provider qualifications, and payment structure.
Massachusetts: State Funded Program
The Massachusetts Department of Public Health (DPH) operates the Pediatric Palliative Care Network, which was authorized via legislation in 2006. Under this program, which is defined in regulation, DPH contracts with community-based organizations located within licensed hospice organizations to deliver palliative care to children. To qualify for the services, a child must live in Massachusetts, be younger than 19, and have a physician’s certification that the child has been diagnosed with a condition that would limit the child’s normal life expectancy. Children who meet these criteria and who do not belong to a health plan that pays for palliative care receive palliative care at no cost to the family. In state fiscal year 2023, Massachusetts allotted $8.7 million for the program.
Resources for Paying for Palliative Care
How States Can Embed Palliative Care in Health Care Reform Initiatives (Brief, NASHP, March 2023)
Q&A: Actuarial Analysis of a Medicaid Palliative Care Benefit (Blog Post, NASHP, February 2023)
Palliative Care in Medicaid — Costing Out the Benefit: Actuarial Analysis of Medicaid Experience (Report, NASHP, December 2022)
Emerging State Innovations in Developing a Medicaid Community-Based Palliative Care Benefit (Blog Post, NASHP, August 2022)
Seven Steps for Building a Community-Based Palliative Care Benefit Within Medicaid (Report, NASHP, March 2022)
“Serious Illness Strategies” for health plans and accountable care organizations (Brief, Center to Advance Palliative Care, 2022)
Supporting the Continuum of Care for Serious Illness in Medicaid Managed Care (Report, NASHP, October 2021)
State Palliative Care Recommendations and Resources (Toolkit, NASHP, September 2020)
Sustainability and Value: State Reimbursement Strategies for Palliative Care (Report, NASHP, September 2020)
Palliative Care State Policy: Building a Medicaid Benefit (Toolkit subsection, Center to Advance Palliative Care, 2020; includes resources on defining beneficiary eligibility, establishing palliative care program qualifications, and selecting quality measures.)
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