Community-Based Palliative Care Models and Trends

For too long, many have talked about the need for community-based palliative care programs as both a precursor to hospice care and even as a stand-alone service. Sure, some have given it a go, but for many others, without adequate reimbursement models, it has been pie in the sky. Much like high-speed rail, everyone seems to agree that palliative care is a great idea, but just like those trains, we tend to study and talk about models instead of forging ahead and laying track. Things are starting to change, however. More programs are mapping a route and driving stakes, experimenting with different models of palliative care. Moreover, with the Medicare Advantage Value-Based Insurance Design (“VBID”) demonstration model for hospice, we are seeing an increased focus on palliative care and its analog, “transitional concurrent care.” This article explores various models for community-based palliative care programs and some of the legal issues associated with each, as well as palliative care efforts under VBID.

Palliative care has evolved from an almost exclusive focus on end-of-life, late-stage patients in inpatient settings to a more interdisciplinary specialty that addresses the needs of seriously ill persons in their homes. The population with serious illness is substantially larger than those who are hospitalized and those who qualify for hospice. Hospice requires that patients have a life expectancy of six months or less, as well as a requirement to forego curative treatments. These factors delay referrals and create gaps in palliative care access for patients who are not terminal. Thus, while all hospice care is palliative care, all palliative care is not hospice care. Palliative care helps patients dealing with life-threatening or life-limiting illnesses, including chronic diseases, and thus may be provided to patients receiving curative or life-extending therapies. Palliative care services include symptom management, customized plans of care, social services, and advance care planning. The services are provided by specialized teams of caregivers that often include specialty trained palliative care physicians, nurse practitioners, nurses, and social workers. This suite of coordinated care across delivery settings yields better outcomes, with lower costs, and higher patient satisfaction — the elusive triple aim of healthcare.

But how are these community-based palliative care programs actually structured?

Hospice Licensure Expansion

Let’s face it; the most experienced providers of palliative care services are naturally hospices. So, it is only natural that many hospices will seek to expand the timeline of their services to treat not only those patients who are terminally ill, but also those who are suffering from chronic diseases who desperately need the many palliative services hospices can capably provide. Of course, with the hospice benefit so clearly defined, this can raise challenges for providers who seek to treat both terminal and chronic patients under one umbrella.

In response, many states have addressed this issue by expanding the hospice licensure category to allow the provision of palliative care services to certain non-terminal patients with advanced and progressive diseases. Often, advanced and progressive diseases are defined as life-threatening medical conditions that are both irreversible and will continue indefinitely, where there is no reasonable hope of recovery. And some states may add a life expectancy prognosis requirement that is longer than the hospice six-month horizon but still defined, such as, for example, up to two years. (As if making a six-month prognosis wasn’t hard enough.) For those organizations offering palliative care under the hospice license, the entity must meet all the hospice requirements, i.e., they would typically not be able to offer only palliative care. On the flip side, palliative care provided under the hospice license may be less regulated. For example, some states do not restrict palliative care providers to the same documentation, plan of care, or service area requirements as hospice patients.

Group Practice Model

Another common approach is a group practice model that does not involve obtaining or expanding a hospice license. A “group practice” generally refers to a model where the palliative care provider is not another licensed healthcare facility/provider (i.e., the hospice entity). Instead, physicians and nurses provide the palliative care as part of a group medical practice. Thus, unlike palliative care being offered under, or as an adjunct to, an existing hospice license, the group practice model rests upon the theory that, in most states, there is no requirement to obtain a general clinic license solely for the provision of palliative care. By going outside the hospice regulations and operating through an entity other than a licensed hospice provider, the provision of palliative care services is not subject to the hospice care regulations. For example, in many states, nurses can provide palliative care services in line with their scope of practice, so long as they are only providing palliative care and do not go so far as to trigger being classified as either a hospice or home health agency.

Under the group practice model, there are, therefore, fewer regulatory hurdles than with a hospice expansion or for example, a home health model (discussed below). This speed to market advantage is attractive for some companies. A physician, nurse practitioner, nurse, or some combination thereof provide the specialized palliative care for patients and bill the government directly on a fee-for-service basis. Care is provided in an office setting or, as is more frequently the case, the patient’s home environment, whether that is a traditional home or another residential setting, such as assisted living.

From a billing perspective, most care in the group practice is billed either through Medicare Part B or through private insurance. Thus, the group practice will need to obtain an NPI and complete a CMS-855B form to obtain a Medicare billing number. The Part B enrollment would be used to bill the E/M physician and other palliative care services rendered by non-physician practitioners (i.e. nurse practitioners, clinical nurse specialists, and physician assistants). The individual practitioners should also be enrolled with an 855I (for individuals) and can reassign their benefits (reimbursement) to the practice through an 855R. That way, the practice care provider can bill Medicare Part B on their behalf. Unlike hospices, there is no set of Medicare condition of participation regulations specific to group practices, so the practice will not need to worry about Medicare surveys. At most, after filing the 855B, the Medicare Administrative Contractor will conduct a site visit to confirm that the practice is real and operational.

Corporate Practice of Medicine Issues With the Group Practice Model

Many companies want to establish their palliative care programs as an affiliate of their hospice or other service lines. While the group practice model is attractive for companies from a licensure standpoint, in some states, it can encounter hurdles with what is known as the “corporate practice of medicine” doctrine and professional fee-splitting prohibitions. Many states prohibit a physician from engaging in the practice of medicine as an officer or employee of any corporation other than a professional corporation (a group of similarly licensed professionals). Thus, a lay-owned company cannot employ physicians to render medical services to patients or divide professional fees with non-physicians. The doctrine has the stated goal of protecting patients from perceived dangers that might come with the private ownership of medical practices by non-licensed individuals, such as the interference with a physician’s medical judgment due to outside influences. Others view the doctrine as an effort to insulate the profession from competition.

Whatever the purpose and whether laudable or not, if your state has a corporate practice of medicine prohibition, then this is an additional hurdle to navigate. Otherwise, there are potential risks to an arrangement where a corporation directly employs a physician or, in some states, even a nurse to provide palliative care. Most often, the workaround to the corporate practice issue is what is known as the “friendly physician model.”

When a non-physician owns the resources and assets that physicians will use to practice medicine or operates the physician’s practice, a common arrangement is for the non-physician to set up a “management services organization” to provide business services to the physician practice. A management service organization is a non-professional entity that will operate the non-professional side of the practice and own its unregulated assets. In these arrangements, the management services organization is often called the “manager.” Then, a professional entity will be formed that will be owned by a “friendly physician” on a turn-key basis. The professional entity will operate the clinical side of the practice. The professional entity will employ the practice’s physicians and own those assets that are required by the state law to be owned by a licensed physician.

The physician is “friendly” to the management services organization in that the non-physician feels the physician will exercise control over the professional entity in a way that is beneficial to the non-professional entity. A friendly physician model reduces the risk of somebody challenging the legitimacy of the arrangement, but the friendly physician structure is more complicated and expensive to form.

The friendly physician’s responsibilities and limitations will be specifically addressed in the agreements between the manager and the friendly physician. Generally, the friendly physician is responsible for the clinical management of the practice and any business decisions required by law to be made or carried out by a licensed physician. This typically includes activities such as hiring, managing, and terminating clinical staff, and preparing or approving clinical policies and procedures. Some of the friendly physician’s actions related to the above responsibilities will need to be exercised with the manager’s consent or approval, as allowed by state law.

Other than those business decisions that are required by law to be made or carried out by a licensed physician or those that are delegated to the friendly physician by the manager, the friendly physician will have no control over the day-to-day business operations of the professional entity, the practice’s non-professional staff, or the operations of the non-professional entity.

The friendly physician model generally requires at least three contractual agreements. First, a Professional Liaison Agreement, through which the physician agrees to implement the manager’s mission, vision, core values, and quality standards through and to the practice’s employees and agents. Second, a Membership Interest Restriction and Control Agreement, which restricts the physician from selling, disposing, or otherwise transferring his or her ownership interest in the professional entity. And third, a Membership Interest Transfer Agreement, which provides the structured process by which the physician may transfer his or her interest to another individual.

Home Health

In some states, the barriers to home health entry are not as exhaustive as other provider types, with no certificate of need requirements and with straightforward licensure. In those states, palliative care programs could seek licensure as home health agencies, but that would generally come with strict requirements on the levels of care, survey oversight, and home health billing requirements. So, even if barriers for entry into the home health market are low, this service modality requires careful consideration before being used solely for palliative care services.

In other states, palliative care programs offering too broad an array of interdisciplinary services could run the risk of inadvertently becoming classified as home health agencies, thus triggering allegations of licensure, certificate of need, and even billing violations. Generally, home health agencies must provide part-time or intermittent skilled nursing care and at least one of the following additional services: physical, occupational, or speech therapy; medical social services; or home health aide services. Thus, even providing nursing and telehealth social worker services could arguably be considered to take place in the resident’s home and thus trigger home health licensure.  A home health license usually is not required for persons who provide professional services for which they are licensed. For example, a nurse practitioner providing certain in-home nursing services would not require a home health license. But if skilled nursing care is provided in addition to a second service, such as social worker services, the combination could run the risk of falling within some states’ definitions of home health services.

For those providers that do affirmatively elect to use their home health platform as the modality for palliative care, this is sometimes referred to as the “Embedded Palliative Clinician Model.” From a federal reimbursement perspective, the home health agency receives no additional payment outside the normal Medicare home health payment. Palliative care must be provided in accordance with each patient’s comprehensive plan of care. There is no contraindication for providing palliative care while also providing home health. Some EMRs offer a palliative care screening tool as an adjunct to the home health EHR. For patients who trigger under the formal EHR screening tool or an informal model, providers should implement specific palliative care goals, which gives the ability to track progress toward those goals. And telehealth is often an important component of helping meet those palliative care goals.

If the home health agency has an affiliated hospice arm, providers should use data to track the conversion rate from home health to hospice. Providers report that for transitional patients who receive palliative home health and then convert to hospice, the average length of stay is longer than for the general population or patients who transfer from home health programs that do not offer palliative care. And, if desired, the nurse practitioner can transition with their patient from palliative to hospice if appropriate billing modifiers are in place and other licensure requirements are met. But note that the move from palliative home health to hospice must be justified and well documented. It cannot just be the same level of service at each. Hospice care must be more, meaning that the patient must receive more services after the transition to hospice. Adhering to the rule that the care must always be patient based, rather than payment based, will help ensure timely and appropriate transitions.

As for evaluating the transition to hospice, the hospice team does not have to start at zero. They should show deference to the palliative care team and review the palliative care notes. Likewise, the palliative care and hospice physicians should meet and confer about what is best for the patient. Timely and appropriate access to hospice care is the ultimate goal. Thus, a stat admission from the palliative team to hospice should almost never occur. The palliative team usually should know well in advance when a patient will need to transition onto hospice. In addition, patient freedom of choice should be well documented. If patients are frequently passing away while still only receiving palliative care, this may indicate a breakdown in the transition process.

Pain Management Clinic

In some states, a palliative care program could fall within the pain management clinic licensure category. Pain management clinics generally treat patients with chronic pain for nonterminal conditions (conditions that are reversible, where there is a reasonable hope of recovery, and where the patient’s medical prognosis is a life expectancy of two years or more), often utilizing Schedule II or III controlled substances. Thus, if a palliative care program seeks to treat not only terminal (even if up to two years) but also nonterminal patients, they could, whether by design or accident, fall within a state’s definition of a “pain management clinic.”  Often, clinics that are owned, in whole or in part, or operated by a hospice or home health agency are exempt from licensure as pain management clinics. But as discussed above, the group practice model of palliative care, by design, places that care outside of a hospice or home health agency. Similarly, individual practitioners acting within their scope of practice are often exempt from pain management clinic licensure. However, an unlicensed group practice could trigger licensure if it meets the state’s definition of a pain management clinic. This is one more consideration for the group practice model or, potentially, an additional opportunity for structuring a palliative care program.

Private Home Care Licensure

Many states have licensure categories for private home care providers that offer private home care services in patients’ residences, sometimes called residential services agencies. This licensure category involves direct care to the patient and includes nursing services, personal care tasks, or companion or sitter tasks.  Private home care services often assist patients with activities of daily living like grooming, meals, transportation, and light housework, all of which are provided by a certified nursing assistant and are therefore not considered non-skilled nursing services. As with the pain management and home health licensure categories discussed above, entities considering palliative care programs should examine their state’s private home care licensure category as well, whether for opportunity or risk.

The Value-Based Insurance Design Model

Through the VBID Model, CMS is testing various Medicare Advantage health plan innovations designed to reduce Medicare program expenditures and enhance the quality of care for Medicare beneficiaries. As part of the Model, CMS is testing the impact of incorporating the traditional Medicare hospice benefit into Medicare Advantage-covered benefits in combination with offering palliative care services outside of the hospice benefit, as well as providing individualized transitional concurrent care services. By including palliative care and transitional concurrent care services, the VBID Model is designed to encourage smoother and timelier transitions to hospice, thereby promoting use of services that are aligned with beneficiary needs and preferences while also reducing the use of avoidable acute care services. Plans rely on a variety of methods to identify beneficiaries who would benefit from palliative care, transitional concurrent care, and hospice care, including provider referrals, claims-based algorithms, or a combination of the two.

Participating plans are required to offer palliative care to eligible enrollees, irrespective of the election of hospice. The palliative care services are intended for seriously ill enrollees who are not eligible for, or prefer not to receive, hospice services. Palliative care services include consults, comprehensive care assessments, 24/7 access to interdisciplinary care teams, advance care planning, and psychological and spiritual support. Although there is no formal prognosis horizon for eligibility for non-hospice palliative care under the Medicare program, several plans consider beneficiaries with an expected prognosis of 12 months or less as being eligible for palliative care.

The VBID Model is designed to promote smoother and timelier transitions to hospice, in part, by promoting availability and use of palliative care among beneficiaries who are not yet ready for hospice. Nevertheless, in 2021, plans in the Model contracted with only a handful of hospices to provide palliative care under VBID, notwithstanding hospices’ unique qualifications and capabilities in this specialized space. And many hospices would have preferred to include palliative care in their contracts with plans. Plans reported that they have flexibility regarding the types of providers that can deliver palliative care, but many in the industry question whether plans are using less qualified options as a cost cutting measure. Some argue that the lack of a clear palliative care definition in the Model allows plans to claim they are offering palliative care without, in fact, offering a true interdisciplinary palliative care service available through a hospice. Perhaps the small number of patients participating in the plans’ palliative offerings bears this out. In 2021, plans reported that only 2,596 beneficiaries received palliative care under VBID, much less than the plans themselves had projected. The average number of days in palliative care was 111.4.

Participating plans must also make transitional concurrent care available to enrollees who elect hospice through in-network hospices. Transitional concurrent care is ideal for beneficiaries who wish to receive both curative care (i.e., treatment that has the intent of curing illness) and hospice services. In this way, transitional concurrent care smooths the path to hospice for those who might benefit from it but who are reluctant to stop curative care altogether. As the name implies, it serves as a transition between curative and hospice care, allowing beneficiaries a bridge and an opportunity to experience the benefits of hospice before committing fully. And unlike the palliative care component of VBID, the transitional concurrent care benefit may only be provided by in-network hospices. But don’t take this to mean that the transitional care offering has been a boon for hospices; during 2021, just 146 beneficiaries used transitional concurrent care across all plans combined.


The opportunities for meaningful community-based palliative care programs are expanding, with more likely to follow. Those providers that lay the groundwork early should be better positioned to drive the palliative care engine, rather than hitching onto the caboose or missing the train altogether. The focus on palliative care offers meaningful advantages for patients, and hospices are best positioned to provide this essential service.