Health Policy$ense

How Medicare Wants to Pay for End-Of-Life Counseling

A New Fee-For-Service Benefit in a Bundled World

[cross-posted with US News]

Medicare is going in multiple directions at once. On the one hand, it is trying hard to move away from fee-for-service payments to doctors, where each tiny service has its own code and its own payment, and instead, toward more bundled payment or even payment of a fixed amount per person per month to accountable care organizations. On the other hand, the government just proposed, in response to pressure from organized physicians, a new code and a new doctor payment in traditional Medicare for end-of-life counseling. Somewhat oddly, Medicare will currently pay for such a session, as soon as you go on Medicare, but (thankfully, perhaps) few 65-year-olds are expecting an end to their life anytime soon. And so the benefit often goes begging. The new rules would allow you to claim the benefit anytime you feel you need it.

Payment for such advice revives the debate during the passage of the Affordable Care Act about so-called "death panels," and predictably, lawyers have been weighing in with fears that counseling can turn into pressure to avoid costly care, a benefit to Medicare and the taxpayers, but not necessarily to seniors. But this debate may be the last gasp of the controversial incentives present in fee-for-service, as much of Medicare is moving (and is being encouraged to move even faster) away from that model. From the viewpoint of beneficiaries and those who pay Medicare taxes, how will incentives for and behavior of end-of-life counseling be expected to work under either payment system?

The physician argument for a new specific payment is not because they don't currently advise their patients who are becoming frail on what to expect; it is that such advice now has to be squeezed into a doctor visit, ostensibly for other purposes with a different procedure code. The hope is that a separate codes means a less hurried, more in-depth discussion. But how frequently this opportunity will be taken up remains to be seen. Many seniors and their families (mine included) try hard to avoid "the talk" or do it as part of estate planning, not in a medical setting. And primary care physicians, skilled and kindly as they are, are not especially trained in or expert on the financial and social dimensions of end-of-life care, factors that often loom larger than the purely medical question of "how long do I have to live?" Still, one expects some use of this service.

Cheerleaders for it also point to potential cost-savings in other medical care, if the patient and family are persuaded to opt for less costly palliative care, but this cost-saving (lawyers may be relieved to hear) is far from assured. Individual primary care physicians, in any case, have little direct financial stake in heroic measures, so their conflict of interest should be small (unless they are in a group practice with specialists who provide aggressive care).

But there are two non-fee-for-service settings where things will probably work out differently. There is good news and bad news about the first option: the accountable care organization, now encouraged to spread among Medicare beneficiaries. As a coordinated organizer of the person's care, it can, in principle, not only give advice but even pay for non-traditional services as part of a palliative care model. But if the entity is concerned about its bottom line, the conflict of interest now is front and center – the accountable care organization makes more money the more cheaply we shuffle off this mortal coil – and this is potentially a reason to avoid an accountable care organization close to end-of-life care.

The other option is a privately-managed Medicare Advantage plan, of the type that now covers about a third of all people on Medicare. While some of these plans are not particularly imaginative, some are – and they are free to do two things. They can choose payment schemes and care coordination protocols to deal with end-of-life care. And, uniquely, if they do save money by avoiding costly and futile care, the can turn those savings into better benefits for people who are still reasonably healthy, lower cost-sharing or even lower premiums. Right now, care at the end of one's life is not a distinguishing feature among Medicare Advantage plans, but it may well become so because of the new attention to this benefit in the competing traditional plan.

Personally, when I go on Medicare, I am going to be looking for a Medicare Advantage plan that makes end-of-life trade-offs that my family and I would want, and, while that plan choice will be difficult, I expect it to be made better in the low-pressure setting of choice of plan while I am still healthy. In contrast, with traditional Medicare, by the time I would get sick enough to see my doctor and claim that new Medicare benefit, I will have lost the opportunity of quiet reflection. I would also value the reassurance that the plan I chose has set its financial incentives and management style to calibrate to the degree of aggressiveness or palliation I desire – without later having to fight doctors excessively rewarded for costly care or plan administrators trying to save a buck.

So the new fee-for-service benefit may or may not turn out to be popular and good thing. Whatever happens, it is likely to soon be pushed aside by the forces of change seeking a better overall model for organizing and paying for care.