Editor’s NoteThis post is the fifth in a periodic Health Affairs Blog series on palliative care, health policy, and health reform. The series features essays adapted from and drawing on an upcoming volume, Meeting the Needs of Older Adults with Serious Illness: Challenges and Opportunities in the Age of Health Care Reform, in which clinicians, researchers and policy leaders address 16 key areas where real-world policy options to improve access to quality palliative care could have a substantial role in improving value.

Alongside the challenge of improving insurance coverage for palliative care, caregivers and practitioners face a continuing challenge in mobilizing long-term services and supports (LTSS), that is, personal assistance to those unable to perform basic tasks of daily living.  These services are an essential part of palliative care.  Whatever a patient’s wishes, unless LTSS are available to support patients and caregivers at home, the emergency department and the hospital become the only option when a symptom or caregiver exhaustion crisis occurs.

But identifying, accessing and coordinating long-term care services are not easy.  Further, financing to support these services is beyond the scope of standard insurance. Few people have private long-term care insurance, and Medicare’s coverage of nursing homes and home health is contingent on the need for skilled nursing or therapy care. MedPac reports that in 2011, Medicare-covered nursing home stays averaged only about 27 days and home health aide (personal care) visits averaged only about five per home health user.  Although a recent legal settlement has required CMS to clarify that coverage is not contingent on evidence of patient improvement, the skilled care requirement remains intact.

Medicaid Variation And The Repeal Of CLASS

Medicaid does cover long-term care services; indeed, about a third of Medicaid spending goes to finance long-term care. But Medicaid’s protections—especially access to home care—vary considerably across states and are only available to people who are impoverished or who become impoverished as a result of medical or long-term care spending.

The repeal of  CLASS—the provision in the Affordable Care Act creating  a national, voluntary insurance program for purchasing community living services and supports—leaves the nation without a strategy for improved financing for long-term care. Even so, payment and delivery reform initiated by the Affordable Care Act can facilitate integration of long-term care services along with palliative care for Medicare beneficiaries.

Unfortunately, CMS initiatives to achieve this goal rely more on prodding state action than on directly promoting the extension of Medicare coordination initiatives to include long-term and palliative care services.  CMS efforts to integrate health and long-term care have focused primarily on negotiating demonstration agreements between states and the federal government to consolidate Medicare and Medicaid payment streams for beneficiaries eligible for both programs (dual eligibles).

Risks In Demonstration Programs For Dual Eligibles

Although CMS offers states fee-for-service as well as capitation payment options, almost all of the nine states that have signed memoranda of understanding (MOUs) with CMS are moving forward with capitated programs.  Only one state, Massachusetts, with a capitated program has begun to enroll beneficiaries in its demonstration.  Although others are scheduled to begin enrollment in the near future, they have not yet begun negotiating contracts with managed care plans—a task that has proved challenging, given the effort both to reduce spending and assure access to care.

Consolidating Medicare and Medicaid payment streams into a single, capitated payment has the potential to decrease current perverse incentives to shift costs between programs, as well as to provide greater flexibility to clinicians to do what is in the patient’s best interest rather than do what conforms to payment specifications.

But capitation’s powerful incentives to spend less can also reduce access to quality care.  Concern about care adequacy is heightened by the inexperience of health plans in general, and of Medicaid managed care plans in particular, in caring for the complex social and medical needs of the dual eligible population and by the demonstration program conditions that savings be taken up front. The risk is that plans may seek to reduce expenses by limiting both provider payments and access to care, rather than by promoting efficiency and care improvement.

Medicare Delivery Reform And LTSS

Delivery reform aimed only at the dual eligible population excludes roughly half the Medicare beneficiaries with impairments, who also would benefit from better coordination across acute and long-term care services.  Moreover, it shifts accountability and responsibility from the federal government to the states for better coordination of Medicare-financed care for patients at high risk of hospitalization—an effort that is at the heart of the ACA’s Medicare payment and delivery reforms.

Unfortunately, current CMS Medicare delivery reform initiatives to some extent ignore the population whose chronic conditions generate a need for long-term care as well as complex medical care.  This approach is myopic, given that the 15 percent of Medicare beneficiaries with chronic conditions and long-term care needs account for about a third of Medicare spending. Among Medicare’s top five percent of spenders, three out of five Medicare beneficiaries are chronically ill people who need long-term care. It is only logical to integrate long-term care along with palliative care principles and practices inside the Medicare program for all its beneficiaries.

Some existing programs point the way to reducing hospital use, nursing home admissions and costs for this patient population while improving quality of care.  CMS can build on these delivery reform initiatives to create a Medicare platform that encourages innovative delivery arrangements for beneficiaries with functional limitations and coordinating services across the continuum for both their long-term care and their medical needs.  Key elements of care models include:

  • A core of comprehensive, patient- and family-centered primary medical care;
  • Assessment of patients’ long-term service and support needs, plus caregiver capabilities and support needs;
  • Coordination of long-term care as well as medical care (same person or team involved in coordinating both);
  • Ongoing collaboration and relationship among care coordinators, physicians, patients and families, with attention to supporting patients during transitions between care settings;
  • Monthly per-person payments to cover coordination costs Medicare does not now cover.

The Medicare pilot test we propose would assess the need for long-term services and supports – taking into account the situation and preferences of patients and caregivers – and would coordinate these services and supports with acute care services for these complex patients. Past experience demonstrates that in the absence of targeting beneficiaries at high risk of inappropriate and high-cost hospital use, care coordination is unlikely to produce significant savings. Targeting innovations to people with chronic conditions and long-term care needs — and coordinating the full range of their service needs — can support both palliative care and ongoing chronic care management, offering a path to the better care at lower costs that policymakers aim to achieve.

Note: The authors appreciate the comments of Harriet Komisar (coauthor of the paper on which they build) and research support from Anna Spencer and take full responsibility for the content.