How to Bill Hospice Claims: A Step-by-Step Process

Hospice care focuses on comfort and quality of life for individuals with a terminal illness. Billing for these specialized services differs significantly from standard medical claims due to specific regulations and payment structures. Accurate billing practices are essential for hospice providers to ensure proper reimbursement and financial stability. Understanding hospice-specific requirements is necessary to prevent claim denials and ensure compliance.

Understanding Hospice Billing Foundations

Hospice care begins with a patient’s election of the hospice benefit, choosing palliative care for a terminal illness over curative treatment. This election is formalized through a signed statement acknowledging the patient’s understanding of hospice care’s palliative nature and waiver of Medicare or Medicaid payments for curative treatments related to their terminal illness. The hospice then submits a Notice of Election (NOE) to the payer, typically a Medicare Administrative Contractor (MAC), within five calendar days of the election date. This timely submission is crucial, as late NOEs can result in days of care not being covered by Medicare, making the hospice liable for those costs. The NOE establishes the hospice benefit period, which typically begins with two 90-day periods, followed by an unlimited number of 60-day periods, provided the patient continues to meet eligibility criteria.

Hospice services are categorized into four levels of care, each with specific criteria and payment rates:
Routine Home Care (RHC): The most common, provided when the patient is stable wherever they reside, such as a private home, assisted living facility, or skilled nursing facility.
Continuous Home Care (CHC): Provided during periods of crisis to manage acute symptoms, requiring intensive nursing care for at least eight hours within a 24-hour period, primarily in the patient’s home.
Inpatient Respite Care (IRC): Offers short-term inpatient care, typically for up to five consecutive days, to provide temporary relief for the patient’s primary caregiver.
General Inpatient Care (GIP): Provided in an inpatient facility, such as a hospital or dedicated hospice unit, for pain control or symptom management that cannot be adequately achieved in other settings.

Hospice services are reimbursed on a per diem basis, meaning a daily payment rate applies regardless of the volume or intensity of services provided. This rate covers all aspects of hospice care, including nursing care, medical equipment, supplies, medications for symptom management, and various therapies. Understanding these levels and the per diem payment model is fundamental to accurate billing and ensuring appropriate reimbursement.

Information and Documentation for Claims

Preparing hospice claims requires collecting specific patient and service-related information. Essential patient data includes full name, date of birth, address, and insurance identification numbers for primary and any secondary payers.

Central to hospice eligibility and billing are physician certifications of terminal illness. A patient must be certified by their attending physician (if they have one) and the hospice physician as terminally ill, with a prognosis of six months or less to live. For subsequent benefit periods, recertifications are required. After the second 90-day period, a face-to-face encounter between the patient and a hospice physician or nurse practitioner is mandated for continued eligibility. Certifications must be accurately dated and signed, and clinical documentation must support the prognosis, demonstrating the patient’s declining status with objective findings.

Physician orders and an individualized plan of care are also important. The plan of care, developed by the interdisciplinary group in collaboration with the patient and family, outlines all services to be provided. Every service rendered, from nursing visits to therapy sessions, must be documented in clinical notes. This documentation validates the care delivered and ensures it aligns with the billed level of care and meets regulatory standards.

Once all necessary information is gathered and validated, it is used to prepare the institutional claim form, the UB-04 (CMS-1450). This form serves as the primary billing document for hospice services. Key fields on the UB-04 are populated with the collected data: patient information is entered into designated demographic fields, service dates and charges are meticulously recorded, and appropriate revenue codes, diagnosis codes (ICD-10-CM), and service codes (HCPCS/CPT) specific to hospice care are included to accurately describe the services provided.

Submitting Hospice Claims

Once the hospice claim is prepared, it is submitted to the appropriate payer. Electronic submission methods are the primary way to transmit claims. Providers often use Electronic Data Interchange (EDI) through a clearinghouse, which scrubs claims for errors before forwarding them. Direct data entry (DDE) portals, provided by Medicare Administrative Contractors (MACs), offer another electronic option. These digital pathways expedite processing and reduce manual errors.

While electronic submission is preferred, paper UB-04 forms can still be submitted via mail in certain circumstances. This involves printing the completed form and sending it to the payer’s designated mailing address, adhering to any specific formatting or attachment requirements.

After submission, tracking the claim’s status is important for revenue cycle management. Clearinghouses and payer portals provide acknowledgments, confirming receipt and indicating whether a claim has been accepted or rejected. Providers monitor these statuses to identify issues, such as rejections due to formatting errors or missing information. An accepted claim proceeds to processing, while a rejected claim requires correction and resubmission.

Upon completion of claim processing, the hospice provider receives a Remittance Advice (RA), also known as an Electronic Remittance Advice (ERA) if transmitted digitally. This document details the payment or denial of the claim, providing a breakdown of the billed amount, the amount approved for payment, any adjustments made, and reasons for denials. The RA includes codes, such as Claims Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs), which explain why a payment was adjusted or a claim denied. Reviewing the RA is important for reconciling accounts, identifying payment discrepancies, and understanding denial trends to improve future billing practices.

Special Billing Considerations

Hospice billing involves several unique considerations beyond standard claim submission, particularly concerning Medicare’s financial oversight. The Medicare hospice aggregate cap limits the total amount a hospice provider can be reimbursed by Medicare for all its patients over a specific cap year. This cap is calculated by multiplying a per-beneficiary cap amount by the number of beneficiaries served. If a hospice’s total Medicare payments exceed this cap, the excess amount is considered an overpayment and must be returned to Medicare. Hospices are required to self-report their cap position to their MAC annually, typically no later than five months after the end of the cap year.

Concurrent care occurs when a hospice patient receives care for conditions unrelated to their terminal illness alongside their hospice services. While the hospice benefit covers care related to the terminal illness, Medicare Part B may cover services for unrelated conditions. Billing for these unrelated services requires coordination to avoid claim overlaps and ensure proper payment, often utilizing specific condition codes on claims to indicate non-hospice related care.

When a patient changes hospice providers during an election period, specific billing protocols apply. The initial hospice must submit a Notice of Termination/Revocation (NOTR) if a final claim has not already been filed, indicating the patient’s discharge or revocation from their services. The new hospice then files a new Notice of Election (NOE) to establish their care, though the overall benefit period dates remain unaffected by the transfer.

Billing for specific levels of care has nuances. Continuous Home Care (CHC) and General Inpatient Care (GIP) have more stringent criteria and documentation requirements than routine home care. CHC requires documentation of a crisis and intensive care provision for a minimum number of hours, with nursing care as the primary service. GIP requires documentation that symptoms could not be managed in a less intensive setting. This must be clearly reflected in the clinical record to support the higher payment rates associated with these levels.

Finally, certain services are not covered under the hospice benefit, such as curative treatments for the terminal illness or services unrelated to the terminal illness that the patient chooses to receive outside of the hospice arrangement. Hospices must clearly communicate these non-covered services to patients and their families. If a patient opts for services not covered by the hospice benefit, they may be directly responsible for those costs.