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Five Ways to Pay: Palliative Care Payment Options for Plans and Providers

Nancy Wise and Dave Briere

While palliative care is poised for growth, determining an appropriate method of payment is a stumbling block. This issue brief describes five examples of payment models and how they impact health plans and providers.

A close-up of a vintage cash register's circular keys.

High-quality palliative care can be delivered in a variety of settings and can be transi­tioned throughout the continuum of care as needed. To enable such services, payers and provid­ers must have a structure and process for expanding the payment beyond the traditional definition often tied to hospice care. This issue brief describes five examples of payment models and their effect on health plans and providers. The models include:

  • Fee for service, in which specific codes and fee schedules must be developed to submit claims for palliative services, and which become part of the contract with the purchaser — an employer or individual
  • Outcomes-based reimbursement, also known as pay for performance, which rewards doctors, hospitals, and other providers for attaining targeted service goals such as quality or efficiency standards
  • Prepaid or capitated reimbursement, in which the payer offers the provider a fixed, or capitated, fee that is intended to cover all or a specific portion of care provided to a member
  • Bundled payment, in which payment is made for patient care related to the diagnosis or condition as part of the fee schedule negotiation
  • Shared savings model, in which a percentage of the pre­mium for a covered population is earmarked for the contracted provider organizations if certain metrics are met that can be tied back to the extension of palliative services

Each of the payment models has advantages and disadvantages from the perspectives of the health plans and providers.

The complete issue brief is available as a Document Download.

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