A Large-Scale Advanced Illness Intervention Informs Medicare’s New Serious Illness Payment Model

Patients with advanced illness receive fragmented, hospital-based care that is unaligned with their preferences near the end of life. We describe a team-based intervention that provides home-based, coordinated care to more than 2,000 seriously ill patients daily in nineteen urban, suburban, or rural counties in California. In the last month of life, compared to matched Medicare beneficiaries in similar counties, this program reduced hospital days by 1,361 per 1,000 beneficiaries, hospital deaths by 8.2 percent, inpatient payments by $6,127, and the total cost of care by $5,657 per beneficiary. The Centers for Medicare and Medicaid Services (CMS) has announced a new Medicare payment model for serious illness care, based in part on this program. To inform model development and implementation, we describe lessons learned about changing the focus of care for advanced illness from hospital to home, broadening care coordination to achieve system integration, and developing methods for payment and quality accountability that transform care delivery.

Beneficiaries with advanced illness (also called “serious illness”) account for 4 percent of the Medicare population but 25 percent of its costs. Advanced illness refers to late-stage chronic illness, when one or more conditions become serious enough that general health and function decline and treatments begin to lose their impact—a state that progresses to the end of life.¹ Patients with advanced illness often undergo unwanted, avoidable, and costly hospitalizations near the end of life.

Neither current Medicare reimbursement nor the present portfolio of the alternative payment models of the Centers for Medicare and Medicaid Services (CMS) adequately finances home-based care to remedy this, and available services are underused and overstressed. Medicare pays for home hospice care, but many enrollees don’t benefit from its services because they are not admitted until days before death, often following intensive hospitalizations.² Lacking a major expansion initiative, palliative care fellowship training programs will not meet the burgeoning demand as the US population ages.³

New clinical and payment models are needed, particularly for the two-thirds of beneficiaries enrolled in fee-for-service Medicare, to integrate fragmented delivery systems and incentivize providers to create team-based care at home for patients and their families and caregivers. The Coalition to Transform Advanced Care (C-TAC), a not-for-profit organization representing over 150 US health systems, health plans, hospices, community-based organizations, and leading consumer and patient advocacy organizations,⁴ has proposed such a delivery and payment model for patients with advanced illness⁵ to the Center for Medicare and Medicaid Innovation (CMMI). The model, called Advanced Illness Management (AIM), was developed at Sutter Health, a large integrated health system in California. CMMI has announced a new serious illness payment model based on C-TAC’s proposal and another from the American Academy of Hospice and Palliative Medicine.⁶

In this article we describe the piloting, scaling, and testing that formed the backbone of C-TAC’s model. Based on that experience, we share lessons learned that could inform CMMI’s efforts to improve care for Medicare beneficiaries with advanced illness.

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