CMS Pub. 100-02, ch. 9, § 70

Hospice Services

(Rev. 1, 10-01-03)

A-02-102

The law governing the provision of Medicare hospice services is found at §1861(dd) of

the Act. This law specifies the services covered as hospice care and the conditions a

hospice program must meet in order to participate in the Medicare program. One of the

conditions a hospice program must meet is that it be “primarily engaged” in providing

hospice care and services to terminally ill individuals. The law further clarifies that

“terminally ill individuals” are individuals having a “medical prognosis that their life

expectancy is six months or less if the illness runs its normal course.” Although the law

does not explicitly define its expectations for “primarily engaged,” CMS has interpreted

it to mean exactly what it says, that a hospice provider must be primarily engaged in

providing hospice care and services (§1861(dd)(2)(A)(i)). “Primarily” does not mean

“exclusively.” This requirement does not preclude provision of non-hospice services to

terminally ill individuals who are not hospice patients or services to individuals, who are

not terminally ill, so long as the primary activity of the hospice is the provision of

hospice services to terminally ill individuals.

The CMS recognizes that there may be circumstances in which another health care entity

may wish to “purchase” some of the highly specialized staff time or services of a hospice

to better meet the needs of its specific patient population. In these cases, the services are

not “hospice” services in terms of Medicare payment but become part of the service

package of the provider under whose care the patient is. Examples of such circumstances

are provided below.

EXAMPLE 1:

A dually eligible Medicare/Medicaid beneficiary enrolled in the Program of All-Inclusive

Care for the Elderly (PACE) program for approximately 2 years has been diagnosed with

a life limiting terminal illness with a prognosis of six months or less. In the course of

routine assessments, the PACE provider recognizes that the beneficiary would benefit

from the specialized services of a pain management specialist or a grief counselor. The

PACE provider would then enter into a contractual arrangement with a Medicare certified

hospice to purchase these specialized services. The hospice provider would bill the

PACE provider for the services, and the PACE provider would in turn pay the hospice

provider directly. Neither provider type would be allowed to bill Medicare separately for

the contracted services (which in this example are PACE services and included in the

PACE provider’s capitated rate). In this example, the PACE provider would maintain a

medical record on the patient and the hospice provider would submit any documentation

related to the care of the PACE patient to the PACE provider.

EXAMPLE 2:

A Medicare beneficiary is receiving skilled services from a Medicare certified home

health agency (HHA). The beneficiary has been diagnosed with a life limiting terminal

illness, but chooses to continue curative treatments, thereby rendering him ineligible for

the Medicare hospice benefit. The beneficiary is experiencing a period of intractable

pain, and the HHA wishes to purchase specialized pain control services from the hospice

provider. The HHA would then enter into a contractual arrangement with a Medicare

certified hospice to purchase specialized nursing services. The hospice would bill the

HHA and the HHA would pay the hospice provider directly. Neither provider type

would be allowed to bill Medicare separately for the contracted services (which, in this

example, are home health services and therefore included in the HHA’s episode

payment). In this example, the HHA would maintain a medical record on the patient, and

the hospice submits any documentation related to the pain management to the HHA.

EXAMPLE 3:

A Medicare beneficiary (non-dual eligible) resides in a skilled nursing facility (SNF) and

has a diagnosis of Alzheimer’s disease. The beneficiary’s disease process has progressed

to a stage in which he/she can no longer ingest food or fluids. The beneficiary’s family

has been approached by the SNF regarding the placement of a feeding tube and has been

told, “their loved one may not live much longer.” The family is struggling with this

concept and has requested assistance from the SNF regarding hospice care and grief

counseling. The SNF has provided information about the Medicare hospice benefit to the

family, but the patient’s legal representative has made a decision not to elect hospice care

at this time. The SNF does not have a trained grief counselor or full-time social worker

on staff, but has a business relationship with a local hospice and has requested the

services of a pastoral or grief counselor. The SNF and hospice enter into a contractual

arrangement for the provision of grief counseling to this beneficiary’s family by a

pastoral care counselor. The hospice provider would bill the SNF, and the SNF would

pay the hospice provider directly. Neither provider type would be allowed to bill

Medicare Part A or B separately for the pastoral care services (which in this example are

included in the Medicare’s Resource Utilization Group or RUG payments to the SNF).

The SNF maintains the medical record on this patient and the hospice provider would

submit any documentation related to the pastoral care services provided to the SNF.

In all of the examples provided above, the billing and payment for the services are

between each of the providers. Medicare must not be billed separately for any of the

contracted services referred to in the examples provided above.