Direct Answer
Hospice billing under Medicare is per diem — the hospice receives a daily rate based on the level of care provided, regardless of the specific services the patient receives on a given day. Medicare recognizes four levels of hospice care: Routine Home Care (RHC), Continuous Home Care (CHC), Inpatient Respite Care (IRC), and General Inpatient Care (GIP). The hospice is responsible for all services related to the terminal illness — it cannot bill Medicare Part B separately for hospice-related services. Hospice eligibility requires physician certification of a prognosis of six months or less if the disease runs its normal course, and the patient must elect to forgo curative treatment for the terminal condition.
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Hospice Eligibility and Election
Medicare hospice eligibility and the election process: Eligibility criteria: patient must be entitled to Medicare Part A; patient must have a terminal illness with a prognosis of six months or less if the disease runs its normal course, as certified by the patient's attending physician and the hospice medical director; the patient (or authorized representative) must sign a written hospice election statement choosing hospice care and waiving their right to Medicare payment for treatments curative of the terminal illness; The hospice election statement: the election statement must include: identification of the particular hospice program; the patient's acknowledgment that curative treatment for the terminal illness is waived; the effective date of election; patient/representative signature; the election is not a permanent decision — a beneficiary may revoke hospice election at any time and return to standard Medicare coverage; the beneficiary may also transfer to a different hospice once per benefit period; Benefit period structure: the hospice benefit is divided into benefit periods: two initial 90-day periods; subsequent 60-day periods with unlimited renewals; recertification is required at the end of each benefit period — a physician (attending and/or hospice medical director) must recertify that the patient continues to have a life expectancy of six months or less; Non-hospice Medicare benefits: when a patient elects hospice, Medicare pays the hospice for all services related to the terminal condition; the patient may still use Medicare Part A and Part B for conditions unrelated to the terminal illness; the hospice may not bill Medicare separately for services related to the terminal diagnosis — all such services must be provided by or arranged by the hospice within the per diem rate.
Four Levels of Hospice Care
Medicare recognizes four levels of hospice care, each with a specific clinical indication and per diem rate: Routine Home Care (RHC): the most common level — provided when the patient is at home (residence, assisted living facility, nursing facility) and does not require continuous care; the hospice provides intermittent nursing visits, aide services, chaplain, social work, therapy, and medications related to the terminal illness; RHC is paid at a per diem rate that varies based on the length of the patient's overall hospice enrollment: a higher "service intensity" rate applies to the last 7 days of life (High Intensity RHC, added 2016); Continuous Home Care (CHC): provided when the patient is experiencing a period of acute medical crisis (not imminent death) that requires skilled nursing or therapy services for at least 8 hours of the 24-hour day (predominantly nursing); CHC is intended to manage acute symptom crises at home to avoid inpatient admission; the per diem rate for CHC is approximately 4× the RHC rate; CHC is frequently audited — the clinical record must document the acute crisis warranting 8+ hours of skilled care; Inpatient Respite Care (IRC): short-term inpatient care provided to give the family/primary caregiver temporary relief; the patient must be in a Medicare-approved facility (hospital, SNF, hospice inpatient facility); IRC is limited to 5 consecutive days per occurrence; the per diem rate is between RHC and GIP; General Inpatient Care (GIP): inpatient care for pain control or acute symptom management that cannot be managed in any other setting; clinical indications for GIP include: uncontrolled pain; severe respiratory distress; acute confusion or agitation; other symptoms not manageable at home; GIP requires documentation of the clinical reason the inpatient level is necessary; GIP is the highest-paying level of care and is frequently audited; the patient must be in a Medicare-approved inpatient facility; the hospice must be the admitting provider (not the hospital independently).
Physician Certification Requirements
Physician certification is a linchpin of hospice compliance and a frequent audit target: Initial certification: required within 2 days of the election date for the first benefit period; must be signed by: the hospice medical director or physician member of the hospice interdisciplinary group (IDG); AND the patient's attending physician (if the patient has one); the certification must state that the patient's prognosis is a life expectancy of six months or less if the disease runs its normal course; Recertification: required before the start of each subsequent benefit period; for the third and subsequent benefit periods, a face-to-face encounter between the hospice physician or NP and the patient is required; the face-to-face encounter must occur within 30 calendar days before the start of each recertification period and must document the clinical findings supporting continued eligibility; Narrative requirement: the certification and recertification must include a clinical narrative — not just a checkbox — describing the patient's clinical condition and the basis for the prognosis; the narrative must include specific clinical findings: the primary terminal diagnosis; a description of the patient's clinical decline; specific functional status, weight, pain, and symptom information supporting six-month prognosis; LCD (Local Coverage Determination): the MACs (Medicare Administrative Contractors) publish LCDs for specific diagnoses listing the clinical criteria that support a six-month prognosis; hospice certifications should document clinical findings mapped to the applicable LCD criteria; Terminal diagnosis coding: the primary terminal diagnosis is reported on the hospice claim using ICD-10 codes; the most specific and accurate code should be used; common hospice terminal diagnoses include: malignant neoplasms, heart failure, COPD, dementia, failure to thrive (R64), and liver disease.
Hospice Cap Calculations
The Medicare hospice benefit includes two financial caps that limit aggregate hospice reimbursement: Annual cap on aggregate reimbursements: each hospice must not receive more than a maximum per-patient cap in aggregate Medicare hospice payments per cap year; the cap year runs October 1 through September 30; the cap amount is calculated by multiplying the cap amount per beneficiary by the number of Medicare hospice patients served during the cap year (using a weighted formula based on days in the cap year); if a hospice receives more than the aggregate cap, it must repay the excess to Medicare; hospices that heavily serve patients with long enrollment periods (non-cancer diagnoses like dementia or heart failure) are at higher cap risk; the cap calculation is complex — hospices should model their cap position throughout the year; Inpatient care cap: no more than 20% of total hospice days for all Medicare patients may be inpatient days (GIP plus IRC days combined); if the 20% threshold is exceeded, Medicare reduces payment for excess inpatient days to the RHC rate; this cap prevents hospices from overusing high-cost inpatient levels; Monitoring cap compliance: hospices should track cap utilization monthly by comparing cumulative reimbursements to the projected cap limit; hospices near the aggregate cap should be cautious about admitting additional Medicare patients in the final months of the cap year; hospice billing systems should generate cap utilization reports automatically.
Hospice Claim Billing
Hospice claims are submitted on the UB-04 claim form on a monthly basis for ongoing patients: Billing frequency: hospice claims are submitted monthly (for each calendar month of care); the claim covers all services provided in the month under the hospice per diem; Type of Bill (TOB): 81X for hospice; Revenue codes and levels of care: 0651 — Routine Home Care; 0652 — Continuous Home Care; 0655 — Inpatient Respite Care; 0656 — General Inpatient Care; Diagnosis coding: the primary terminal diagnosis is reported in the principal diagnosis field; related diagnoses are reported in secondary positions; the attending physician NPI and hospice facility NPI are both required; Units and charges: the claim reports the number of days at each level of care as units; the per diem charge is reported per day; Hospice aide and homemaker services: reported on the claim with revenue code 0571 (hospice aide); these services are included in the per diem — no separate HCPCS billing; Physician services: attending physician professional services unrelated to the terminal illness may be billed by the physician to Medicare Part B; services by the hospice physician in the role of attending physician are bundled in the per diem and may not be billed separately; some attending physician services may be billed separately — this is a complex area governed by specific CMS billing guidance; Election and recertification timely filing: election statements and certifications must be on file before the hospice can bill for the period; if the certification is not completed timely, the hospice must void the claim for the period until documentation is complete.
FAQ
What is the difference between GIP and Continuous Home Care, and how does documentation differ?
General Inpatient Care (GIP) and Continuous Home Care (CHC) are both high-intensity hospice levels of care triggered by acute symptom management needs, but they differ in setting and clinical indication — and both are among the most frequently audited hospice billing areas. GIP: Setting: inpatient (hospital, SNF, or hospice inpatient facility); Clinical indication: acute pain management or symptom management that cannot be managed in any other setting; the key standard is "cannot be managed at home" — the patient needs 24-hour nursing observation and access to inpatient resources; Common appropriate GIP indications: uncontrolled pain requiring IV titration; severe respiratory distress; intractable nausea and vomiting; acute agitation or terminal restlessness requiring IV medication; GIP is NOT appropriate for: social reasons (caregiver fatigue alone); routine inpatient monitoring without acute symptoms; convenience; Documentation requirements for GIP: nursing notes documenting specific symptoms requiring inpatient management; medication administration records showing frequency and dose of symptom management medications; physician orders documenting the clinical basis for GIP admission; evidence that the symptoms are being actively managed and are not manageable at a lower level; CHC: Setting: patient's home (residence); Clinical indication: brief period of acute crisis requiring predominantly skilled nursing care for 8+ hours per 24-hour day; CHC is designed to manage acute crises at home to avoid hospitalization; Common appropriate CHC indications: acute symptom crisis that can potentially be managed at home with intensive nursing support; uncontrolled symptoms where home management is clinically feasible; CHC is NOT appropriate for: routine daily care; home health aide visits only (CHC requires predominantly nursing/therapy); Documentation requirements for CHC: nursing records documenting continuous or near-continuous presence for 8+ hours; documentation of the acute crisis requiring intensive services; hourly or near-hourly clinical notes demonstrating active management; when to expect transition back to RHC. Both GIP and CHC are subject to prepayment review and targeted RAC and TPE audits — the documentation bar is substantially higher than for RHC.
What happens to Medicare coverage when a patient revokes hospice election or the disease appears to improve?
Hospice election revocation and apparent improvement are two distinct scenarios with different implications for coverage and billing: Revocation of hospice election: a Medicare beneficiary may revoke hospice election at any time; revocation must be in writing (the revocation statement must include the effective date of revocation); upon revocation, the beneficiary regains full Medicare Part A and Part B coverage for the terminal and all other conditions; the remaining days in the benefit period are forfeited — the beneficiary cannot get those days back; after revocation, the beneficiary may re-elect hospice at any time; there is no limit on the number of times a beneficiary can elect and revoke hospice; Financial implications of revocation: the hospice bills for days up through the effective revocation date; the hospice cannot bill for any period after the revocation effective date; the patient may return to the same or a different hospice in the future; Apparent improvement (stabilization): a patient may stabilize or even appear to improve under hospice care without the hospice needing to revoke or discharge; Medicare hospice coverage is based on prognosis (life expectancy of 6 months or less if the disease runs its normal course) — not on continuous decline; a patient who stabilizes is not automatically ineligible for hospice if the underlying terminal diagnosis still carries a six-month prognosis; the hospice physician must document why the patient continues to meet the prognosis criteria despite apparent stabilization; Hospice discharge for improved condition: if a patient's condition improves to the point that the patient no longer has a terminal prognosis of six months or less, the hospice must discharge the patient from the hospice benefit; the patient regains standard Medicare coverage; the patient may re-elect hospice in the future if the condition again meets eligibility criteria; this is different from revocation — it is an involuntary discharge initiated by the hospice based on the clinical change; Billing at discharge: the final claim reports the discharge date with the appropriate discharge disposition code; the hospice should ensure that the discharge documentation clearly supports why the patient no longer meets hospice eligibility criteria.
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