Hospice and home health provider Mission Healthcare is making a significant push into the palliative care space in its home state of California, with eyes on interstate expansion. The company launched its program in the Ventura, Calif., region and is now mobilizing to bring palliative care to each market it serves.
Mission is a portfolio company of Chicago-based private equity firm The Vistria Group. The organization is a large regional player in Southern California, but has taken its first steps north this week with the acquisition of Alliance Home Health & Hospice in Pleasanton. Financial terms of the transaction were undisclosed.
The company’s move into palliative care was slowed last year by COVID-19 pandemic but is now gaining momentum, according to CEO Paul VerHoeve. Mission’s initial foray with palliative care in the Ventura market was precipitated by community need and growing interest in those services from local health systems and payers.
“We rolled [palliative care] out in our Ventura market as a pilot, and it was really driven by the community,” VerHoeve told Hospice News. “We had been a home health provider in that community and brought in hospice in 2019, and then we were being asked to provide some type of palliative care services. Now that we’re coming off of the pandemic, we have plans to roll that out into each and every one of the markets that we currently serve.”
About 50% of community-based palliative care providers in the United States are hospices, according to the Center to Advance Palliative Care. Hospice providers nationwide have been working to diversify their service lines to extend beyond the expected last six months of life, with palliative care as the most common new offering.
A key challenge to establishing a sustainable palliative care program is the lack of Medicare reimbursement. Currently Medicare pays for physician or licensed independent practitioner services through fee-for-service programs but has no dedicated community-based benefit. While Medicare Advantage plans have the option to pay for palliative care as a supplemental benefit, that coverage is currently only available in 11 states. California is not one of them.
Mission is supporting its palliative program through relationships the company is forging with private payers.
“There isn’t a perfect model that creates access for everyone. We felt like it was a really good step to find more creative ways to find payer sources that would ultimately pay for the care,” VerHoeve said. “Insurance companies and [Medicare Advantage] plans are becoming interested in paying for [palliative care] on a fee-for-service basis, which we think will continue to grow as time moves on.”
Mission’s care model follows the traditional interdisciplinary structure of palliative care. The program includes in-home physician visits as well as nursing care, aide services and professionals to tend to patients’ psychosocial needs.
While building its palliative care program, Mission is not slowing down on growing its other business lines. The company has several hospice and home health acquisitions in the diligence phase and recently opened a de novo location in Orange County in its home state. Historically, de novos have been an engine for the company’s growth, but Mission is picking up steam on acquisitions, as evidenced by the Alliance transaction.
“We’ve constantly wanted to find ways to be able to get into Northern California. When we came to Alliance, they were a smaller organization, a home health provider that was adding hospice into their service offering,” VerHoeve said. “We really felt like that combination was going to be a great way for us to get into northern California with both service lines.”
The company’s private-equity backer, Vistria Group, has a track record on hospice growth. In one of the larger hospice deals of 2020, the PE firm sold St. Croix Hospice to H.I.G. Capital for an undisclosed amount. Vistria also owns Agape Care in South Carolina.
Mission intends to spread throughout Northern California from the foothold it gained through the Alliance deal and has eyes on the surrounding states. Some of the company’s deals that are in process are outside California. According to VerHoeve, Mission’s expansion plans remain focused on the western United States. Entering some of those regions would also open up access to markets in which Medicare Advantage plans offer palliative care as a supplemental benefit.
“The goal is for Mission to have a large presence in four or five Western states over the next handful of years,” VerHoeve said. “We believe we understand the way that the West Coast operates, and we really feel like we’ve got a strong understanding of the culture of home health and hospice and what it takes to be successful in those states.”
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March 16, 2021 at 04:59AM
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