Carve-In or Carve-Out? The Future of Hospice Under Medicare Advantage | Part Two

In Part Two of this thought-provoking conversation, Chris Comeaux and Robin Heffernan unpack the complex realities shaping the future of hospice under Medicare Advantage. 

From the lessons learned in the VBID demonstration to the growing momentum behind “carve-in” models, this episode explores the tension between cost, quality, and patient experience—and what it will take to align all three.  At the center of the discussion is a critical question: how do we design a system that truly rewards high-quality care while eliminating inefficiencies and poor outcomes?

The conversation dives into emerging models like concurrent care “bridge pathways,” which challenge the traditional binary transition into hospice and offer a more patient-centered approach to serious illness care. 

It also tackles the impact of private equity, consolidation, and payer incentives—raising important considerations about accountability, network design, and the sustainability of mission-driven providers.  For leaders navigating an evolving healthcare landscape, this episode provides both clarity and challenge on what comes next.  

Key Takeaways

• The VBID demonstration revealed both promise and limitations—strong outcomes are possible, but only with better network control and quality alignment.  
• “Concurrent care bridges” may offer a more realistic and compassionate transition into hospice, improving patient experience and outcomes.  
• Financial incentives must shift toward total cost of care, not fragmented payment models, to truly drive better patient outcomes.  
• Consolidation is likely, but high-quality providers—regardless of size—can still thrive if value and outcomes are prioritized.  
• Payer accountability and earlier palliative care engagement are key to reducing costs while improving care quality.  

Guest:
Robin Heffernan, PhD, Co-Founder and CEO, Empassion

Host:
Chris Comeaux, President / CEO of TELEIOS and author of The Anatomy Of Leadership

Teleios Collaborative Network   /   https://www.teleioscn.org/tcntalkspodcast

Transcript

Welcome And Episode Context

Jeff Haffner 0:00

Welcome to TCN Talks, and Anatomy of Leadership. We continue our conversation with Robin Heffernan in Part Two of Carve -In or Carve- Out, the future of Hospice under Medicare Advantage. And now, here's Chris Comeaux.

What VBID Taught Plans

Chris Comeaux 0:22

Let's go into the second segment, Robin, which is maybe a little bit of how we kind of found ourselves here. So the V BID really was a limited demonstration. Can you talk a little bit about, like what's your perception of what they learned? And um, does the data give you confidence that scaling this nationally um will produce some of the good outcomes that you're predicting as opposed to maybe some unintended consequences?

Robin Heffernan 0:45

Yeah. So I think the good things about VBID were the folks who participated saw hey, if I do palliative care well and I get to a good hospice provider, that has a great impact on the patient and it saves me a lot of money. Like the happy path, everyone would agree, that was a really nice path. I would like to do more of that. Um, the challenges for Bvid, you know, there was no teeth in terms of setting up a network. And so you could call it network leakage, you can call it patients just went to bad hospice providers. They had some bad experiences, they had some bad financial outcomes, the payer felt like I have no way to control this. Um, and so when you put those two things together, the economics were kind of a wash for the program overall. There were some good experiences, there were some bad experiences. Um, but if you put the filter on it of, hey, if I fix the network problem and I was able to get more of the good, happy path, I think everyone to would tell you, great, I would like to do more of this. Um, the one other wrinkle that we heard about was you do have to solve this.

Building A Concurrent Care Bridge

Robin Heffernan 2:09

Patient is getting curative care, and then like the next day, they're supposed to not get curative care. Um, and that's unrealistic. Why do we make patients go through that? Uh, and so how do we figure out a better path where it's not like hospice from day one is zero curative care? When some people may argue like getting dialysis is not curative, it's a symptom management, right? Like I should be able to keep getting deaf. So I I think we need to figure out what's allowed during hospice in a better fashion, which probably also aligns to I should figure out how to pay hospice more appropriately.

Chris Comeaux 2:53

Boy, this you and I could do like three podcasts together. Um so again, I've kind of grown up. I was I was raised by nurses, I'm a CPA by trade. So it came from the business side, and I would go out on visits with hospice nurses, and there's so many things now I look back on that they were teaching me these interesting pieces of wisdom. But the election statement, like that, you know, that human desire desire to live. My father-in-law is 91 years old. He's amazing. I pray he's with us 10 more years. Um, and want him to be here as a family. And I'm a guy who grew up in hospice in power care. And so that election statement, it's it's puts that creative tension on this is the pathway where you're going. And, you know, some of those most beautiful hospice mission moments we talk about, they're people don't have tough conversations in their lives until they know that they're finite. And there's these beautiful outcomes that occur. And if you erase that line, and I'm not saying you you're saying totally erase, it's almost like I'm hearing you say, kind of create maybe a bridge of some sorts where you could have some concurrent care for a season, but that may be one of those unintended consequences that maybe we just have to be a little bit wiser of going, hey, there'll be this overlap space, but then there's still going to be this very clear space. I don't know if you want to respond to that.

Robin Heffernan 4:09

100% right. I mean, I think tactically, so VBit allowed a plan to test concurrent care bridges. Um, and some of these plans did that, and they saw this is a really great outcome, right? I can I can let folks have a certain number of days or a certain number of treatments, or you know, there was a lot of experimentation that went on. Um can I just go back to well imagine like there is no hospice fee for service, but I'd tell you, okay, you have this patient through expiration. You would design what care they're getting very differently, right? Then, oh, they're allowed to get curative treatment until this day, then they gotta put that away uh and do these other services. And so I think plans would inherently do some more experimentation, have these bridge pass, because they know that helps a patient effectively transition over this course of time. It meaningfully reduces their hospitalizations. They have much better experiences, their patient satisfaction scores are way higher. Right. And so, even like the financially oriented metrics that the plans care about are better. When we stop thinking about this as, okay, I I like effectively have total cost of care, responsibility for this patient until this day, and then it's a daily payment. And now I'm focused on how much am I paying you each day, and I'm not focused on the value that you're generating.

Chris Comeaux 5:51

I love the words you use, the bridge path. Because I do think sometimes we think about it very black and white that, well, then it's just all going to be concurrent care to the end. But maybe there is this like in-between stage between what we call powdered care today and what we call hospice today. There is this interesting, maybe potentially bridge path. Um good. Well, let's let's go

Mission Providers And Consolidation Risk

Chris Comeaux 6:11

to another one. So a lot of independent hospices, especially the nonprofits, um, that's one I'm a little partial to. They operate on really thin margins. I think now it's negative 1.6% based upon MedPack report, and I forget what the average for-profit, maybe there's was 10%, and then the average is um somewhere in between like 5%. Um, and so how do we prioritize mission over scale? Maybe I shouldn't say it overscale, but does a carbon accelerate consolidation and are we comfortable with that potential trade-off?

Robin Heffernan 6:43

I sort of look at services that have come up on this similar path. Primary care has come up on this similar path, home health has come up. Um I think quality providers, regardless of their size, get rewarded. I also believe it is true that a lot of smaller quality providers, they don't have ambitions, right, to be in every county. And some large private equity firm comes along and offers them a really good deal, and then they take the deal because it's good for their family or it's, you know, it's sort of good for whatever is happening for them. And and I think that will happen in hospice, inevitably. But I think if you focus on total cost of care and you focus on these are the quality metrics that are that define good, then even if you get some consolidation, that big player still has to be good. Otherwise, you know, they're not going to generate quality outcomes.

Chris Comeaux 7:48

Which, you know, we went into that a little bit in the measures that matter. Um, you and Mindy were just so articulate that you may have a great provider today and then a leader changes over and then quality goes down. And you were lamenting, you know, it's not like you found the perfect organization and they're great forever. There's a lot of waxing and waning, even where there's good stuff. And I don't feel like you totally said this, but I've done enough consulting in this world that some of the big chains, that's exactly the case. They may have brand Chris Como hospice, but one branch over another is not consistent amongst that brand. It's still a very service level field. And you know, so where you and I kind of hit it off a little bit of like, because I grew up in manufacturing too. I think we're gonna have an interesting potential renaissance. I don't want it to be all about the process, but man, when you marry credible mission with incredible process, systems that support it, you get great. And this to me is where our future is, which is where I get really excited because this is the type of stuff that we're working on as a network. And so um I totally hear you that the trade-off's gonna be there selfishly. It was I had such mixed emotions about doing this podcast with you because I really want to talk it through, and you're doing a great job helping me see the other side, but I've been pretty against the carve in. But yet, selfishly for TCN, we're positioned incredibly because this is exactly why we created our network, is to do this actual work. And our network is interesting because they could stay independent, but be part of something bigger. And you just affirmed, I just took a flyer, and just because I grew up in the business world, I said we use the quadruple aim and said, I don't know how this is gonna play out. But if we focus on great service, great quality, great cost, and a great work environment for employees, it's gotta work out good for us because people are gonna be looking for that. And that's legitimately kind of how we create our clinically and great network. We use the quadruple aim. Now we're using the quintuple aim, is that rallying cry, and we still have a ton of work to do. Um, but I feel like that's kind of what I feel like you're very much affirming that, you know, just because you're maybe an independent nonprofit somewhere, or maybe an independent for-profit, if you're working on those things, there's a future for you. Yeah. Um, and you're not doomed that you're gonna have to consolidate with someone. Now, navigating it may be really sophisticated, which is again, that's why we created our network to go. You may go, I'm not even sure how to talk to the payer. That's where we created our network. You have a high-performing network as well, where you can help people kind of navigate that. But did you want to respond to any of that?

Robin Heffernan 10:18

100%, right? I I've if you're a provider doing great work, you will get rewarded. Um, and and I think probably those providers wake up every day and are like, if we could get the bad actors out of this industry, that that's good for everyone, right? Um, but we don't have a framework right now to really do that. Even I would say, you know, it's it's nice that sort of the broader public is now recognizing hospice fraud, but they're still mostly trying to go collect on a bunch of wasted spend that they that they did historically, right? And there isn't a lot around how are we going to prevent this from continuing to happen? How are we going to assure and reward these smaller providers who are struggling with margin, right? So that they don't get subsumed by these larger bad actors. And I I guess I'm I'm I'm more uh of the belief that unless you put the payers' feet to the fire and you make them financially responsible for bad outcomes, like burdensome transitions, this is a really slow uphill slog.

Chris Comeaux 11:38

Gotcha. That's a that's a such a key point in what you just said.

Fraud And Payer Accountability

Chris Comeaux 11:41

Um let's talk pre-authorizations then. What are your thoughts on prior-authorizations in post-acute care? Does medically necessary mean the same thing for acute and post-acute settings?

Robin Heffernan 11:52

So medically necessary in terms of like home health or in terms of yeah. Yeah.

Chris Comeaux 11:58

And it really goes to the broader question about prior authorizations and just that concern of, again, you know, every system's perfectly designed to produce the result it produces. If the payer just wants to reduce costs, are they going to make it really difficult via the authorization process even to get people in the care?

Robin Heffernan 12:15

Yeah. Um so I guess I would sort of reiterate if a payer has done a deal where they have a guaranteed margin and it is your responsibility to take care of the patient, there'll be some medical necessity that they'll want done, you know, just for good hygiene. But they're out. They're not gonna try to limit the benefit, they're not gonna try to push the benefit, they've gotten their guaranteed margin. And then it really becomes well, now I need this patient to go to high quality hospice at the right point in time, otherwise I'll lose money.

Speaker 3 12:59

Okay, right.

Robin Heffernan 13:00

And and so I think I think putting focus on do we have all the protections in the medical authorization is the wrong focus point, right? Because if you put the focus on total cost of care, the payer says, I know how to do these deals, I keep some margin for myself. I mean, this is what they do with CMS, right? Like I keep 15% for myself, I I then have 85% to spend on medical costs. They do these deals all day long. And and then it becomes an MSO or a high quality network or the hospices themselves that say, okay, it's now my responsibility to take good care of this patient. And it is not about, do I have all the right rules in place around medical authorization? It's about caring for the patient.

Chris Comeaux 13:52

What about um patient engagement? Feels like the holy grail, as I sit here and process and think about what you're talking about, even based upon some of the experience of the organizations that we kind of debrief with that were part of the Medicare uh carbon demonstration, that that patient engagement is so difficult. You know, if you get a if you get a list of here's the name, the number, and then that's the handoff. Um, do you feel like has anyone solved that? Or is that like this whole new frontier that we're gonna work on together if there is a carbon world? Um, so what are your thoughts on that? And maybe patient engagement. I've heard it framed as patient engagement, and you may have a better term.

Robin Heffernan 14:33

Um, I mean, that you're talking about like when am I gonna get a referral?

Chris Comeaux 14:39

Yeah. And uh what that looks like. And how do you actually get them to uptake the palliative care and the hospice services? That was not done well in the demo. I don't know if you picked up on some of that, um, but it it was not done well in in at least at least one payer for sure. That was one of the biggest complaints.

Robin Heffernan 14:56

Yes. Um again, I think this has a lot to do with no hospice network and I'm still paying daily weight on hospice. Right. But but if you if you asked any of the MA plans that we work with, do you believe earlier palliative care is better? They would say, yes, but we can't pay that much for it. Right? Um and and the reason they say that is because the current financial economics are just I'm gonna pay for a certain number of months, and then I'm gonna accrue savings when the patient goes to Hospice. Like there isn't sort of a whole value equation for them. Uh, we operated also in the high needs ACREACH programs, right? And in that you had a true PMPM for the patient for every month of service. It wasn't paid PMPM and then the patient goes to hospice, and now you get a hospice daily weight. It's still a PMPM. In all of those cases, it was better to do palliative care earlier. Every single one, right? And so I think it would become pretty apparent to the payers quickly, I gotta do palliative care. I gotta figure out how to make these good handoffs. They have case management teams. You know, you and I were talking earlier. We know the same group at Aetna, like they have case management teams who focus on chronically ill patients. There's some overlap with seriously ill patients. That's a nice mechanism to get referrals. They train PCPs all the time on different, you know, referral pathways. They've figured out how do I educate members about my meal benefit and my transportation benefit. I think IBX is the

Prior Authorization And Incentives

Robin Heffernan 16:54

only plan, and we work with them who has an actual defined palliative care benefit. But it is something that an MA plan can put in their C SNP benefit and market it to patients. Um, so I I think there's a lot of venues for them to do a better handoff. But they're just not, I don't think they're gonna care about it until they they have the full spend uh of where this impacts the dollars. And then it's like a no-brainer.

Chris Comeaux 17:24

Gotcha. Well, here's the last couple of questions as we come into a close. These will be fun for you. What are some of the biggest challenges you face when building a network of dispating preferred providers?

Robin Heffernan 17:36

Yeah, these are probably very similar to you. Um challenges are that this it's in flux every day. Right. And so you identify great providers and they're doing really well, and then something happens and they're not doing that well. You're constantly trying to build new capacity. Folks are, you know, going in and out of business. This is a tough business, right? To sustain. And so I think the hardest part is just this is not the set it and forget it. This is you. You wake up each day and keep doing what you were doing the previous day, trying to make some improvements.

Chris Comeaux 18:16

It's job security, right? There's no end of work to be done.

Robin Heffernan 18:20

Yes, 100%.

Chris Comeaux 18:22

So maybe a profile of your best partner, tech platform, network, association, health system. I don't know if you got kind of like your profile.

Robin Heffernan 18:32

Yeah. Um, we've got a number of great providers. I would say, you know, similar attributes. They all have a multidisciplinary team. They rely heavily on social workers and community health aids, particularly to do some care coordination in between visits that might get done by an NP or an RN. Uh tech platforms, they actually all operate on different tech platforms. We have yet to see a good palliative care tech platform.

Chris Comeaux 19:02

So if you're we're working on that one.

Robin Heffernan 19:04

Yeah. If someone hears this and they they want to build a new business, there's there's a hole for that. Um and then uh it's groups, I think, who have figured out palliative can be more than a loss leader for hospice that sort of have the mindset that works really well in these programs, right? Where they say, great, like I'm happy to get introduced and see this patient eight months, 10 months before hospice, because that's going to pay dividends, you know, versus some of the palliative groups affiliated with hospice go like, I thought palliative care was, you know, one consult telling the person about hospice.

Chris Comeaux 19:50

Yeah. Yeah, we actually, and then we just we just did a great podcast of the GeriPal guys and um Eric uh Madeira Madeira said that uh someone called sending them a squeeze ball about a care program. Oh my god, oh my gosh. Um so you you kind of alluded to this and the measures that matter podcast, but I don't remember how you answered it. How often are you having to remove to review the performance metrics to hold your partners accountable to? Like how frequently are you guys having to look at that?

Robin Heffernan 20:19

So we look embedded every day, but we evaluate the providers every week. Um, and every week volume allocation may change based on how they did in the last week and their last month's performance.

Speaker 3 20:34

That's incredible.

Robin Heffernan 20:35

That's really short cycles. I'm sure you see the same. Yeah.

Chris Comeaux 20:39

Yeah. Um, and then just kind of maybe the last question. Do you it, you know, most of what I

Patient Engagement And Referrals

Chris Comeaux 20:44

read is people don't think the carve in is going to happen anytime soon. What's Robin's opinion? Do you think that is there a window of opportunity coming back where maybe we it may actually be feasible?

Robin Heffernan 20:56

Um I think it may be feasible faster than that, particularly because what we have heard from some of this investigation that's happening on the CMS hospice fraud front today is maybe we will be able to claw back some of the money we lost, but this system will just keep losing us money. Um, and and we're, you know, we're talking about large sums of money. So it's sort of sad on one hand that that the financial loss is maybe the largest motivating factor here, but I think it is motivating CMS, CMMI leaders to say, hey, if we don't fix this, like we're just gonna keep chasing the dollars.

Chris Comeaux 21:41

Wow. Um well, final thoughts, Robin, give you the final word.

Robin Heffernan 21:46

Wow. Well, I know you started off, maybe still are anti-carbon, but I do really believe and and would love you know for the hospice providers out there to to lean in. To this, I I think it can, and your network and your listeners, they're the high quality ones, right? So for these organizations, you're doing great work. I think you can make more money, not less, in a carbon. Um and we can help more patients have a great experience.

Chris Comeaux 22:18

Well, well said. Did you fully convince me I am a hell of a lot more educated? Now do I do and I I do know where the issues have been and I've got some ideas now just listening to you of maybe how we ameliorate some of those concerns that um have been concerns or and have not made the the V bid demo kind of work out so well. Again, I'm selfishly, I I probably should want it to happen because uh originally that's what birthed TCN. But to be honest with you, like what we've now created, we didn't that wasn't on the blueprint. It was just like, holy crap, if you get this carbon, you know, what are we gonna do? They're not gonna come in contract with all these individual hospices and we just start solving problems. And now looking through the rearview mirror is like, wow, we kind of create something pretty cool if that does come to fruition. But I would not be a person of integrity if I wouldn't ask those kind of questions because at the end of the day, we want people to get great care. And unfortunately, you know, every system's perfectly designed to produce the results it produces. Generally, health insurance companies are first and foremost about saving dollars, healthcare dollars. And so it comes from that scarcity mentality, and you apply that to end of life care, and it would seem like a whole bunch of bad potential unintended consequences. But you you were very articulate. So I really appreciate you taking the time and um and also you had the heads up. I'm like, I told you I am kind of skeptical about this, but I'd love to bring you on the podcast and talk about it. So thank you, and thank you for the work that you and your team are doing. I appreciate it. Thank you, Chris. Well, and to our listeners, we want to thank you. Nean, if at the end of each episode, we always share a quote, a visual. The idea is to create a brain bookmark, a thought, a thought prodder about or a podcast subject to further your learning and growth and thereby your leadership. Going for like a Brain Tattoo, we want it to stick. Please subscribe to our channel. We don't want you to miss an episode. This is one definitely want to pay forward, maybe even to your board of directors, as well as your leadership team, and even some staff. You know, it's easier for us to rail against the world and be frustrated by things. Let's be the change that we wish to see in the world. So thanks for listening to today's podcast. And here's our Brain Bookmark to close today's show.

Jeff Haffner 24:25

"Every system is perfectly designed to get the results it gets." by W. Edwards Deming.