Ind. IHCP Hospice Services Provider Reference Module, Section 6, Admission to a Nursing Facility for Treatment of Nonterminal Conditions

There are situations when a member receiving hospice care at home must be admitted to a hospital for

treatment of a nonterminal condition and then discharged to a nursing facility for further treatment of that

nonterminal condition. There are also situations when a hospice member is admitted directly into a nursing

facility (without first being hospitalized) for care related to a nonterminal condition. In each of these

situations, the nursing facility and hospice provider must advise the hospice member of their options with

nursing facility care and hospice care, the services offered under each option, and the cons equences of

selecting either option from a patient-care, insurance-coverage and billing perspective.

Both state and federal law require that a person applying for admission to a nursing facility must be shown

to have a need for nursing facility care prior to the onset of any Medicaid reimbursement for nursing facility

care. There are no exceptions to this requirement; therefore, the existing Indiana and federal Preadmission

Screening and Resident Review (PASRR) requirements for nursing facility admissions apply to individuals

under hospice care who are being admitted to a nursing facility. The nursing fac ility, hospital and Area

Agency on Aging (AAA) must follow the current process for completing LOC and PASRR screening

through the state’s web-based PASRR system, as described in the Long-Term Care module. Medicaid

reimbursement is not available for nursing facility care until the nursing facility has received the appropriate

authorizations via the PASRR system.

IHCP payment for services provided to a hospice member in a nursing facility for conditions unrelated to

the terminal illness varies depending on the following scenarios:

8. The Medicaid-only hospice member is discharged to a nursing facility following an inpatient

hospitalization (or is admitted directly to a nursing facility, without first being hospitalized) for

rehabilitation and recovery from the nonterminal condition.

9. The dually eligible (Medicare and Medicaid) hospice member is discharged to a nursing facility

after a three-day Medicare-qualifying hospital stay for ongoing treatment of the nonterminal

condition.

Scenario 1 – Medicaid-Only Hospice Member Admitted to a Nursing Facility

for Treatment of a Nonterminal Condition

If a Medicaid-only hospice member receives nursing facility care for treatment of a nonterminal condition,

payment to the nursing facility must be made in compliance with the parameters outlined in 405 IAC 1-16-4.

These payment parameters apply even though the nursing facility stay is for treatment of the nonterminal

condition.

This payment provision applies in the following situations:

• The hospice member resides at home and is admitted to the nursing facility for rehabilitation and

recovery, either directly from home or after release from a hospital.

• The nursing facility resident is under hospice care and is admitted to the hospital for an inpatient

hospital stay and then is readmitted to the nursing facility for rehabilitation and recovery after

release from the hospital.

The nursing facility and hospice provider have the following notification and billing responsibilities under

this scenario:

• The hospice provider must submit a completed Change in Status of Medicaid Hospice Patient form

to the PA-UM contractor to notify the IHCP that the hospice member has been admitted to the

hospital (if applicable).

• The hospice provider must continue to bill the IHCP for hospice services using revenue code 651

(routine home hospice care delivered at home) or revenue code 652 (continuous home hospice care

delivered at home) while the hospice member is in the hospital (if applicable).

• When the hospice member is admitted to the nursing facility (after being discharged from the

hospital, if applicable), the hospice provider must submit a completed Change in Status of Medicaid

Hospice Patient form to the PA-UM contractor.

• Federal law mandates that a person applying for admission to a nursing facility must complete the

PASRR process. This program is designed to identify individuals with mental illness (MI),

intellectual disabilities (ID) or related conditions (RCs). Proper application of this program ensures

that individuals with these conditions receive the appropriate placement and services necessary to

meet their needs. When a person with one or more of these conditions is approved for nursing

facility placement, the nursing facility providers must address both the medical and behavioral

needs of the resident.

• Indiana requires that residents seeking admission to an Indiana Medicaid-certified nursing facility

complete the existing LOC and PASRR screenings for nursing facility admissions through the

state’s web-based PASRR system as indicated.

• Hospice and nursing facility providers are reminded that the IHCP cannot reimburse hospice claims

for nursing facility room-and-board services until the nursing facility has obtained the appropriate

authorization via the PASRR process.

• Unlike Medicare, the IHCP does not permit a nursing facility to bill directly for treatment of the

nonterminal condition. As outlined in 405 IAC 1-16-4, the hospice provider must bill the IHCP for

care provided in a nursing facility. The IHCP will pay the hospice provider 95% of the nursing

facility case-mix rate and the hospice must reimburse the nursing facility per their contract. If the

nursing facility fails to comply with 405 IAC 1-16-4 and bills the FSSA directly, the nursing facility

will be subject to recoupment by the IHCP of any Medicaid overpayments.

• When a hospice member is discharged to home from the nursing facility, the hospice provider must

submit a completed Change in Hospice Patient Status Form to the PA-UM contractor.

• When the hospice member has resumed residence in their home, the hospice provider must bill the

IHCP using revenue code 651 (routine home hospice care delivered a t home) or revenue code 652

(continuous home hospice care delivered at home) for those dates of service following the discharge

from the nursing facility.

Scenario 2 – Dually Eligible Hospice Member Admitted to a Nursing Facility

for Treatment of a Nonterminal Condition

The following issues arise when a dually eligible (Medicare and Medicaid) hospice member is admitted to

the hospital with a three-day qualifying stay and must be discharged to a nursing facility for continuation of

the care provided in a hospital. The common example raised by hospice providers involve a dually eligible

hospice member residing at home who falls and breaks a hip and is then admitted to the nursing facility for

rehabilitation and recovery after release from a hospital.

The hospital and the hospice provider have the following notification and billing responsibilities when a

dually eligible hospice member is admitted under a three-day Medicare qualifying hospital stay:

• The hospice provider must notify both Medicare and Medicaid that the dually eligible hospice

member has been hospitalized, because the hospitalization constitutes a change in hospice member

status. The IHCP requires the hospice provider to submit a Change in Status of Medicaid Hospice

Patient form to the PA-UM contractor. This form must also be completed when a dually eligible

hospice member is discharged from the hospital and transferred to a nursing facility for treatment of

the nonterminal condition.

• The hospice provider must bill Medicare Part A for hospice services for the dates of service that the

hospice member is hospitalized.

• The hospital must bill Medicare for treatment of the nonterminal condition using condition code 07.

The hospice and nursing facility have the following notification and billing responsibilities when a hospice

member must be transferred to a nursing facility for treatment of a nonterminal condition after a three-day

Medicare qualifying hospital stay:

• The hospice provider must notify the Medicare and Medicaid programs that this individual has been

transferred from a hospital to a nursing facility. The IHCP requires the hospice provider to send a

Change in Status of Medicaid Hospice Patient form to the PA-UM contractor.

• The hospice provider continues to bill Medicare Part A for the hospice services. The nursing facility

is responsible for billing Medicare for treatment of the nonterminal condition using condition code

07.

• While the dually eligible hospice member is receiving treatment for the nonterminal condition, the

hospice provider must not bill the IHCP for nursing facility room and board using revenue code

659, because Medicare is paying the nursing facility directly for treatment of the hospice member’s

nonterminal condition.

• After a nursing facility has completed treatment for the hospice member’s nonterminal condition,

the hospice member is discharged home. The hospice provider must notify the IHCP by submitting

a Change in Status of Medicaid Hospice Patient form to the PA-UM contractor. The hospice

provider must notify Medicare according to Medicare program guidelines.

• There may be rare occasions when a nursing facility may request durable medical equipment (DME)

for a hospice member, such as a customized wheelchair. On those rare occasions, the IHCP requires

the nursing facility to submit a request for prior authorization to the PA-UM contractor. This request

for prior authorization must include a copy of Medicare’s denial for this durable medical equipment.

Use of Condition Code 07 by Nonhospice Providers Billing Medicare for Nonterminal

Conditions for a Medicare Hospice Beneficiary

The Medicare program specifies that nonhospice providers may bill Medicare directly by using condition

code 07 when the nonhospice provider delivers Medicare-covered services to treat the nonterminal

condition of a Medicare hospice beneficiary. This policy applies to dually eligible (Medicare and Medicaid)

hospice members, because Medicaid is the payer of last resort.

The nonhospice provider must bill Medicare by using condition code 07. The Medicare progra m stipulates

that nonhospice providers are subject to recovery of overpayments and possible referral for fraud and abuse

investigation if a pattern of incorrect use of condition code 07 is determined.

Hospice or nursing facility providers with questions about proper use of condition code 07 or a case-specific question involving a Medicare hospice beneficiary – whether the hospice member is Medicare-only

or a dually eligible for Medicare and Medicaid – may contact the Medicare Part A Intermediary for Indiana

at 800-633-4227. Because the IHCP is the payer of last resort, hospice providers and nursing facilities

serving dually eligible hospice members must bill Medicare first for nonhospice services, accord ing to the

parameters established by Medicare.

Procedures When a Dually Eligible Member Must Remain in the Nursing

Facility after the Nonterminal Condition Has Been Treated

This section addresses procedures that the hospice and nursing facility provider must follow when a dually

eligible (Medicare and Medicaid) hospice member must remain in a nursing facility because the hospice

member has experienced a general worsening of their overall condition. At this point, the hospice

member’s nonterminal condition has been treated and paid for by Medicare.

If nursing facility care becomes appropriate for a hospice member after a nonterminal condition has

been treated, it is important that nursing facility providers ensure that the appropriate paperwork has been

initiated to ensure ongoing approval for Medicaid nursing facility level of care. If the nursing facility does

not have appropriate authorization via the state’s web-based PASRR system, the nursing facility needs to

complete the PASRR process. See the Long-Term Care module and the PASRR page at in.gov/fssa for

more information.

After Medicare days for nursing facility days have been exhausted, the IHCP cannot reimburse hospice

claims for nursing facility room-and-board services until the nursing facility has the appropriate

authorization via the state’s web-based PASRR system

After a hospice member has been approved to reside in the nursing facility, the hospice provider may start

billing the IHCP for nursing facility room-and-board services using hospice revenue code 659.

Note: Reminder to nonhospice providers: Medicaid is the payer of last resort for dually

eligible (Medicare and Medicaid) hospice members.