Palliative Care Reimbursement, Innovation and Reform

Health Highlights

Editor’s Note: The article summarized below is brought to you by the American Health Law Association’s (AHLA) Post-Acute and Long-Term Services Practice Group. Click here to download a PDF of the full article.

Copyright 2024, American Health Law Association, Washington, D.C. Reprint permission granted.

Palliative Care Defined

The term “palliative care” is often used by doctors and other health care professionals during a serious illness or toward the end of life. Federal regulations define palliative care as:

patient and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and to facilitate patient autonomy, access to information, and choice.1

Unlike hospice, palliative care is not limited to those with a prognosis of less than six months to live who have foregone curative care. While Medicare only pays for palliative care in limited circumstances, the concept of palliative care can and should extend to patient and family-centered care that is delivered at any stage of illness.

Palliative Care in Action

Medicare only pays for palliative care in limited contexts:

  • Through Medicare Part A:
    • if delivered in the hospital2;
    • or through Hospice3 when delivered by an interdisciplinary team for a patient who has a prognosis of less than six months to live.
  • Through Medicare Part B, if delivered by a physician, nurse practitioner or physician’s assistant, medically necessary, and billed via an appropriate code.4

Palliative Care Innovation and Reform

Palliative care is defined broadly and includes medical and non-medical supports. Other than in the hospice context—and a few demonstrations and flexibilities—Medicare pays for palliative medicine, not the full range of palliative care.

Existing Flexibilities

  • Palliative Care as a Medicare Advantage Supplemental Benefit: Medicare Managed Care Plans—Part C or Medicare Advantage Plans—have the flexibility to provide supplemental benefits that are not covered by traditional Medicare. Since palliative care is not a traditional Medicare benefit, plans have wide latitude in how they pay for this benefit.

Innovation Models 5

  • Medicare Care Choices Model6: Beginning in 2015, the Centers for Medicare and Medicaid Services (CMS)—through its Center for Medicare and Medicaid Innovation (CMMI)—began to test a demonstration that allowed hospices to provide a hospice-like benefit to individuals who had not yet decided to forgo curative care. Unfortunately, CMS has ended this demonstration and Congress has not made any corresponding changes to the Medicare Hospice benefit, nor created a palliative care benefit.
  • Hospice carve-in: Individuals enrolled in Medicare Advantage get their hospice services from a hospice that is directly paid by Medicare. CMS recently began to assess the impact of allowing Medicare Advantage Plans to pay and oversee hospice care as part of the Value-Based Insurance Design (VBID) demonstrations.
  • GUIDE Model: Most recently, CMS announced a demonstration that provides payment and support for people and caregivers living with mild and severe dementia. (Click to view Manatt’s recent free webinar Guiding an Improved Dementia Experience: A Deep Dive into CMS’s New GUIDE Model)

The Future of Palliative Care

Palliative care stands at the confluence of three trends that will enhance access to and delivery of care in the community:

  • The shift toward care in the home7
  • The shift to value over volume in fee-for-service
  • The increase in Medicare Advantage enrollment

As the nation ages and people live longer with complex and chronic medical conditions, Medicare will need to evolve to meet beneficiary and caregiver needs.

1 42 C.F.R. § 481.3

2 Under ordinary hospital reimbursement for care, room, and board.

3 See Types of Care: What is Hospice Care? - CaringInfo.

4 This is paid for via various codes in the physician fee schedule. See Palliative Care Billing Updates Every Provider Should Know | Center to Advance Palliative Care (

5 CMS recently synthesized its various efforts to allow for palliative care payment and delivery, with mixed results See Palliative Care Projects: Synthesis of Evaluation Results 2012-2021 (

6 Medicare Care Choices Model | CMS

7 Even then, hospital at home provides promising opportunities for care in the home.



pursuant to New York DR 2-101(f)

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