Palliative Care Payment Models

As the use of palliative and hospice care increases, the need for services continues to grow. Traditional service portfolios have evolved and alternate payment models have emerged. Here is a review of some of the models.

Prepaid or Capitated Reimbursement

When using a capitated payment model, the payer gives the provider a fixed sum to cover all or a designated part of the service. Once paid, the provider then takes over the responsibility to pay for the services provided.

The simple fee-for-service model offers no outcome-based metrics or retrospective determinations. Specific fees and codes are developed for services and these become part of the contract. Pre-authorization requirements for care may be part of the arrangements between the palliative care provider and the payer.

Bundled Payment Model

This model provides payments based on condition or diagnosis. A negotiated fee is determined and providers are paid based on the fee. The cost is determined by a negotiated fee schedule for conditions or diagnosis. Provider organizations have the flexibility to offer extended palliative and hospice care services.

Shared Savings Model

Part of the premium paid by a covered group or population is set aside into a pool to be used only if certain metrics are met. These metrics are tied back to the extension of palliative care services.

A shared savings model is sometimes a transitional approach to a capitated model. It helps both the providers and the payer to isolate the extension of the care and its impact.

Pay For Performance (P4P) or Outcome-Based Model

The P4P Model is similar to the shared savings model. Part of the care premium is placed in a separate fund. Upon meeting certain metrics, additional payments can go to the providers on a retrospective basis. This rewards hospitals, doctors and other care providers for meeting efficiency or quality goals during hospice care.

Most of these payment models allow providers to share in savings if conditions are met, but do carry a future risk of loss if the quality of care goes down.

Concordance Healthcare Solutions understands hospice and palliative care, and recognizes that, regardless of the payment model, supply costs are always an important factor. Contact us here to see how we can help control your medical supply costs.

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