Subscribe to eNews Contact us / IVR

Avoiding Hospice Claim Rejects

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

A beneficiary 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 beneficiary voluntarily signs a written election statement choosing the Medicare hospice benefit and receives care from a Medicare-certified hospice

Verify a beneficiary'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 beneficiary is currently receiving services from another provider or supplier that could result in overlapping Medicare benefits.

Medicare beneficiaries who are entitled to Part A and have a terminal illness with a life expectancy of six months or less may choose to elect the Medicare hospice benefit instead of Original 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 beneficiary 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 beneficiary's choice. The beneficiary or their authorized representative may elect or revoke hospice coverage at any time by submitting a written statement. A hospice provider cannot revoke a beneficiary's hospice election or require the beneficiary to do so.

If a beneficiary revokes hospice care, Medicare coverage for benefits that were waived upon election of hospice is restored under the Original Medicare program

Verifying Hospice Status Prior to Billing

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

Before submitting a claim, confirm the beneficiary's current eligibility and hospice status using Direct Data Entry (DDE) or the SPOT portal.

Billing guidance:

  • If the beneficiary is not enrolled in hospice, submit the claim to Original Medicare.
  • If the beneficiary is enrolled in hospice and the services provided are related to the terminal condition, submit the claim to the hospice provider responsible for the beneficiary's care.
  • If the beneficiary is enrolled in hospice but the services are unrelated to the terminal condition, submit the claim to Medicare and report condition code (CC) 07 (Treatment of non-terminal condition for hospice patient).

For beneficiaries 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 Direct Data Entry (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.

Billing Claims 

When a beneficiary elects hospice during an inpatient stay:

If a beneficiary 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 that occurred before the hospice election.
  • Report patient status code:
  • 50 - Discharged to hospice at home
  • 51 - Discharged to hospice in a medical facility
  • Report the hospice election effective date as the discharge date on the Medicare claim.
  • Bill the hospice agency for the portion of care provided after the hospice election becomes effective.

When a beneficiary revokes hospice during an inpatient stay:

If a beneficiary 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.
  • Report the hospice revocation date as the admission date on the Medicare claim.
  • Report the hospice revocation date as the statement from date.

Note: 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.

Handling Claim Rejections

If the beneficiary was enrolled in a hospice election period on the date(s) of service, you may receive one of the following rejection codes.

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

Correcting a hospice-related claim rejection:

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

Step 1: Verify beneficiary eligibility

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

Step 2: Determine whether the beneficiary Is enrolled in hospice

If the beneficiary is enrolled in hospice:

  • Contact the hospice agency to determine whether the services provided are related to the beneficiary'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 Medicare and report CC 07.
  • 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 the Social Security Administration to update the hospice record.

If the beneficiary is not enrolled in hospice:

  • Contact the hospice agency and request that they submit their final claim with occurrence code (OC) 42 and the beneficiary's hospice disenrollment date.
  • Once the hospice records have been updated or removed from Medicare's systems, resubmit the claim to Medicare.

Medicare Advantage Beneficiaries

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 that elect hospice may revoke hospice election at any time, but claims will continue to be paid by the MAC as if the beneficiary were enrolled in Medicare until the first day of the month following the date hospice election was revoked.

Example:

  • Beneficiary'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

 

References