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Avoiding hospice claim rejects

Medicare hospice care is a benefit under Medicare Part A providing comfort-focused (palliative) care for terminally ill patients. The goal is to improve quality of life and manage symptoms rather than cure the terminal illness.

A patient must:

  • Have Medicare Part A.
  • Be certified as terminally ill by the hospice physician and the attending physician (if the patient has one).
  • Choose hospice care instead of treatment intended to cure the terminal illness.
  • Receive care from a Medicare-certified hospice

A hospice election period begins when an eligible Medicare patient voluntarily signs a written election statement choosing the Medicare hospice benefit and receives care from a Medicare-certified hospice.

Providers should verify a patient's Medicare eligibility before or at the time of admission to confirm the patient is eligible for Medicare-covered services. Eligibility verification also helps identify whether the patient is currently receiving services from another provider or supplier that could result in overlapping Medicare benefits.

Medicare patients entitled to Part A and having a terminal illness with a life expectancy of six months or less may choose to elect the Medicare hospice benefit instead of traditional Medicare coverage for treatment of their terminal condition. Hospice services are covered only when provided by a Medicare-certified hospice agency. 

In some cases, a patient may be diagnosed with a terminal condition during an inpatient stay and decide to elect hospice care. Election or revocation of the Medicare hospice benefit is solely the patient's choice. The patient or their authorized representative may elect or revoke hospice coverage at any time by submitting a written statement. A hospice provider cannot revoke a patient's hospice election or require the patient to do so.

If a patient revokes hospice care, Medicare coverage for benefits waived upon election of hospice is restored under the original Medicare program

Verifying hospice status prior to billing Medicare

During the intake process and before admission, providers should verify a patient's Medicare eligibility. This is especially important because many patients elect hospice during or after a hospital stay.

Before submitting a claim to Medicare, confirm the patient's current eligibility and hospice status using Direct Data Entry (DDE) or the SPOT (Secure Provider Online Tool).

Billing guidance

  • If the patient is not enrolled in hospice, submit the claim to original Medicare
  • If the patient is enrolled in hospice and the services provided are related to the terminal condition, submit the claim to the hospice provider responsible for the patient's care.
  • If the patient is enrolled in hospice but the services are unrelated to the terminal condition, submit the claim to original Medicare and report Condition Code 07 (Treatment of Non-Terminal Condition for Hospice Patient).

Medicare Advantage beneficiaries

For patients enrolled in a Medicare Advantage plan, follow the applicable hospice billing guidance for Medicare Advantage enrollees.

Important: CMS requires providers to use self-service eligibility tools such as DDE or SPOT to obtain beneficiary eligibility and hospice information. Customer service representatives cannot provide eligibility information and will refer providers to the appropriate portal resources.

Bill claims appropriately

When a patient elects hospice during an inpatient stay

If a patient elects hospice while hospitalized, the inpatient stay must be split based on the hospice election date:

  • Bill original Medicare for the portion of the stay occurring before the hospice election.
  • Report Discharge Status Code
    • 50 - Discharged to hospice home
    • 51 - Discharge to Hospice Medical Facility
  • The discharge date on the Medicare claim should be the effective date of the hospice election.
  • Bill the hospice agency for the portion of care provided after the hospice election becomes effective.

When a patient revokes hospice during an inpatient stay

If a patient revokes hospice during an inpatient stay, billing responsibility shifts back to original Medicare beginning on the revocation date:

  • Bill the hospice agency for services provided through the hospice revocation date.
  • Bill original Medicare for services provided after the hospice revocation.
  • The admission date on the Medicare claim should be the same as the hospice revocation date.
  • The statement "From" date should also be the hospice revocation date.

Key reminder: When a hospice election or revocation occurs during an inpatient stay, providers must split billing at the effective date of the election or revocation to ensure claims are submitted to the correct payer and avoid processing delays or denials.

What if the claim rejects?

What reject reason codes may be received?

Here are some codes you may receive if the patient was or is enrolled in a hospice election period for the date(s) of service.

  • U5235 -- Definition: For PPS claims, the admission date falls within a risk GHO period, the dates of service fall within a hospice election period; and condition code '07' is not present on the claim.
  • C7010 -- Definition: The edited inpatient or outpatient claim has 'from/thru' dates overlapping a hospice election period and is not indicated as treatment of a non-terminal condition (condition code '07') or a MCCD/DMD Notice of Election (89a) 'from' date overlaps a hospice election period.

Correcting a hospice-related claim reject

If you receive a hospice-related claim reject, take the following steps to determine the appropriate billing action.

Step 1: Verify beneficiary eligibility

Review the patient's Medicare eligibility and hospice status using your eligibility verification tools.

Step 2: Determine whether the beneficiary is enrolled in hospice

If the patient is enrolled in hospice:

  • Contact the hospice agency to determine whether the services provided are related to the patient's terminal illness.
  • If the services are related to the terminal illness, payment arrangements should be made with the hospice agency.
  • If the services are not related to the terminal illness, bill original Medicare and report Condition Code 07 (Treatment of Non-Terminal Condition for Hospice Patient).
  • If you believe the hospice is no longer operating, cannot determine whether services are related, or suspect the hospice has not updated the revocation information, contact your Medicare Administrative Contractor (MAC) for assistance.

If the patient is not enrolled in hospice:

  • Contact the hospice agency and request they submit their final claim with Occurrence Code 42 and the patient's hospice disenrollment date.
  • Once the hospice records have been updated or removed from Medicare's systems, resubmit the claim to Medicare.

Medicare Advantage patients

Federal regulations require MACs maintain payment responsibility for managed care enrollees who elect hospice. 

While a hospice election is in effect, certain types of claims may be submitted to the MAC by either the hospice agency or a provider treating an illness not related to the terminal condition. The claims are subject to Medicare rules of payment.

  • Hospice services covered under the Medicare hospice benefit are billed by the Medicare hospice.
  • Institutional providers may submit claims to Medicare with the CC 07 when services provided are not related to treatment of the terminal condition.
  • Medicare Advantage plan enrollees electing hospice may revoke hospice election at any time, but claims will continue to be paid by the MAC as if the patient were enrolled in original Medicare until the first day of the month following the date hospice election was revoked.

Example:

  • Patient's hospice election period ended on 1/10/YY
  • Bill the MAC for claims for DOS 1/11/YY to 1/31/YY
  • Bill the Medicare Advantage plan for claims for DOS 2/1/YY and beyond

 

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