Medicare Part B 101 Manual

Medicare Part B 101 Manual

Hospice

Table of Contents

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General Requirements

Hospice care is a benefit under the hospital insurance program. To be eligible to elect hospice care under Medicare, an individual must be entitled to Part A of Medicare and be certified as being terminally ill. An individual is considered to be terminally ill if the medical prognosis is that the individual’s life expectancy is six months or less if the illness runs its normal course.

Section 1814(a)(7) of the SSA specifies that certification of terminal illness for hospice benefits shall be based on the clinical judgment of the hospice physician and the individual’s attending physician if he/she has one or the medical director regarding the normal course of the individual’s illness. No one other than a medical doctor or doctor of osteopathy can certify or recertify a terminal illness. Predicting of life expectancy is not always exact. The fact that a beneficiary lives longer than expected in itself is not cause to terminate benefits.

An individual (or the authorized representative) must elect hospice care to receive it. The first election is for a 90-day period. An individual may elect to receive Medicare coverage for an unlimited number of election periods of hospice care. The periods consist of two 90-day periods, and an unlimited number of 60-day periods. If the individual (or authorized representative) elects to receive hospice care, they must file an election statement with a particular hospice. Hospices obtain elections from the individual and forward them to the intermediary, which transmits them to the Common Working File (CWF) in electronic format. Once the initial election is processed, CWF maintains the beneficiary in hospice status until death or until an election termination is received.

An individual must waive all rights to Medicare payments for the duration of the election/revocation of hospice care for the following services:

  • Hospice care provided by a hospice other than the hospice designated by the individual (unless provided under arrangements made by the designated hospice) and
  • Any Medicare services that are related to the treatment of the terminal condition for which hospice care was elected or a related condition or services that are equivalent to hospice care, except for services provided by:
    1. the designated hospice (either directly or under arrangement);
    2. another hospice under arrangements made by the designated hospice; or
    3. the individual’s attending physician, who may be a nurse practitioner if that physician or nurse practitioner is not an employee of the designated hospice or receiving compensation from the hospice or those services.
  • Medicare services for a condition completely unrelated to the terminal condition for which hospice was elected remain available to the patient if he or she is eligible for such care.

The hospice also sends a copy of the election to the MAC with jurisdiction for the hospice’s geographic area. The MAC maintains the election statement in its files to use when processing physician claims.

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Coinsurance

Hospices may charge individuals for the applicable coinsurance amounts. An individual who has elected hospice care is liable for the following coinsurance payments.

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Coinsurance on Outpatient Drugs and Biologicals

The hospice may charge the beneficiary a coinsurance amount equal to five percent of the reasonable cost of the drug or biological to the hospice, but not more than $5, for each prescription furnished on an outpatient basis. The hospice is not required to make this charge but may do so in accordance with the following.

  • The hospice must establish a drug copayment schedule that specifies each drug and the copayment to be charged. The copayment charges included on the schedule must approximate five percent of the cost of the drugs or biologicals to the hospice, up to a $5 maximum. Additionally, the cost of the drug or biological may not exceed what a prudent buyer would pay in similar circumstances. The hospice must submit this schedule to the fiscal intermediary in advance for approval.

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Respite Care Coinsurance

The amount of coinsurance for each respite care day is equal to five percent of the payment made by the CMS for a respite care day. The amount of the individual’s coinsurance liability for respite care during a hospice coinsurance period may not exceed the inpatient hospital deductible applicable for the year in which the hospice coinsurance period began.

The individual hospice coinsurance period begins on the first day an election is in effect for the beneficiary and ends with the close of the first period of 14 consecutive days on each of which an election is not in effect for the beneficiary.

Thus, if a beneficiary elects to use all three election periods consecutively (without a two-week break), they are subject to a maximum coinsurance for respite care equal to the hospital inpatient deductible. Similarly, if a break between election periods exceeds 14 days, the maximum coinsurance for respite care doubles, triples, or quadruples (depending on the number of election periods used and the timing of subsequent elections).

Example: Mr. Brown elected an initial 90-day period of hospice care. Five days after the initial period of hospice care ended, he began another period of hospice care under a subsequent election. Immediately after the period ended, he began a third period of hospice care. Mr. Brown received inpatient respite care during all three periods of hospice care. Since these election periods were not separated by 14 consecutive days, they constitute a single hospice coinsurance period. Therefore, a maximum coinsurance for respite care during all three periods of hospice care may not exceed the amount of the inpatient hospital deductible for the year in which the first period began.

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Physicians’ Services

A physician must perform physicians’ services (as defined in 42 Code of Federal Regulations 410.20[b][1][1]), except that the services of the hospice medical director or the physician member of the interdisciplinary group must be performed by a doctor of medicine or osteopathy. Nurse practitioners may not serve as a medical director or as the physician member of the interdisciplinary group.

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Attending Physician Services

When hospice coverage is elected, the beneficiary waives all rights to Medicare Part B payments for professional services that are related to the treatment and management of the terminal illness during any period the hospice benefit election is in force, except for professional services of an attending physician, who is not an employee of the designated hospice nor receives compensation from the hospice for those services. For purposes of administering the hospice benefit provisions, an attending physician means an individual who:

  • is a doctor of medicine or osteopathy; or
  • a nurse practitioner (for professional services related to the terminal illness that are furnished on or after 12/8/2003); and
  • is identified by the individual, at the time hospice coverage is elected, as having the most significant role in the determination and delivery of their medical care.

Even though a beneficiary elects hospice coverage, he/she may designate and use an attending physician, who is not employed by nor receives compensation from the hospice for professional services furnished, in addition to the services of hospice-employed physicians. The professional services of an attending physician, who may be a nurse practitioner, that are reasonable and necessary for the treatment and management of a hospice patient’s terminal illness are not considered hospice services.

The physician or other provider must look to the hospice for payment when the service is considered a hospice service (i.e., a service related to the hospice patient’s terminal illness that was furnished by someone other than the designated attending physician [or a physician substituting for the attending physician]).

Professional services related to the hospice patient’s terminal condition that were furnished by the attending physician, who may be a nurse practitioner, are billed to the MAC contractor. When the attending physician furnishes a terminal illness-related service that includes both a professional and technical component (e.g., X-rays), the professional component is billed to the carrier and looks to the hospice for payment for the technical component. Likewise, the attending physician, who may be a nurse practitioner, would look to the hospice for payment for terminal illness- related services furnished that have no professional component (e.g., clinical lab tests).

When a Medicare beneficiary elects hospice coverage he/she may designate an attending physician, who may be a nurse practitioner, not employed by the hospice, in addition to receiving care from hospice-employed physicians. The professional services of a nonhospice affiliated attending physician for the treatment and management of a hospice patient’s terminal illness are not considered “hospice services.” These attending physician services are billed to the MAC, provided they were not furnished under a payment arrangement with the hospice. The attending physician codes services with modifier GV (Attending physician not employed or paid under agreement by the patient’s hospice provider) when billing professional services furnished for the treatment and management of a hospice patient’s terminal condition. MACs make payment to the attending physician or beneficiary, as appropriate, based on the payment and deductible rules applicable to each covered service.

Payments for the services of attending physician are not counted in determining whether the hospice cap amount has been exceeded because services provided by an independent attending physician are not part of the hospice’s care.

Services provided by an independent attending physician who may be a nurse practitioner must be coordinated with any direct care services provided by hospice physicians. Only the direct professional services of an independent attending physician, who may be a nurse practitioner, to a patient may be billed; the costs for services such as lab or X-rays are not to be included in the bill. If another physician covers for a hospice patient’s designated attending physician, the services of the substituting physician are billed by the designated attending physician under the reciprocal or fee-for-time compensation arrangement billing instructions. In such instances, the attending physician bills using modifier GV in conjunction with either modifiers Q5 or Q6.

When services related to a hospice patient’s terminal condition are furnished under a payment arrangement with the hospice by the designated attending physician who may be a nurse practitioner, the physician must look to the hospice for payment. In this situation the physicians’ services are hospice services and are billed by the hospice to its fiscal intermediary.

MACs must process and pay for covered, medically necessary Part B services that physicians furnish to patients after their hospice benefits are revoked even if the patient remains under the care of the hospice. Such services are billed without modifiers GV or GW. Make payment based on applicable Medicare payment and deductible rules for each covered service even if the beneficiary continues to be treated by the hospice after hospice benefits are revoked.

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Care Plan Oversight

CPO exists where there is physician supervision of patients under care of hospices that require complex and multidisciplinary care modalities involving regular physician development and/or revision of care plans. Implicit in the concept of CPO is the expectation that the physician has coordinated an aspect of the patient’s care with the hospice during the month for which CPO services were billed.

For a physician or nurse practitioner employed by or under arrangement with a hospice agency, CPO functions are incorporated and are part of the hospice per diem payment and as such may not be separately billed. For information on separately billable CPO services by the attending physician or nurse practitioner, refer to the CMS Internet-Only Manual (IOM) Publication 100-04, Medicare Claims Processing Manual, Chapter 12, Section 180.

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Revised 10/2/2023