Noridian Healthcare Solutions, LLC, (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare and Medicaid (CMS), has conducted post-payment review of claims for Medicare Part B of A claims billed on dates of service from January 1, 2022, through December 31, 2023. Below are the review results:

Background

Hospice is a holistic program offering care and support for terminally ill patients and families. Eligibility for hospice services under Medicare Part A, requires an attending physician, when applicable, and hospice physician to certify the beneficiary terminally ill diagnosis, with a life expectancy of six months or less. The beneficiary signs an election statement, indicating their choice to receive hospice care, waiving rights to other Medicare payments related to the terminal illness and related conditions. When a beneficiary elects hospice, the benefit periods of care include two 90-day periods followed by unlimited 60-day benefit periods, with appropriate documentation to support the subsequent recertifications. Services and items are included in the hospice benefit to reduce pain and manage symptoms related to the terminal illness, secondary or related conditions. These services may include, but are not limited to, medical equipment, supplies, physical, occupational or speech therapies, and nursing care. Payments for services palliating or managing related conditions are covered under a Medicare Part A per diem to hospice facilities. The per diem rate is based on the level of care provided to the beneficiary. Routine home care, continuous home care, inpatient respite, and general inpatient care, are the four levels of care provided to beneficiaries receiving hospice services.

In accordance with IOM 100-04 Ch. 11 §50, outpatient services unrelated to the hospice enrollee’s terminal illness, secondary, and related conditions may be covered under Medicare Part B of A and are coded using condition code 07, “treatment of non-terminal condition for hospice.” Outpatient services palliating or managing secondary and related conditions for hospice enrollees are not covered under Medicare Part B of A services.

A prior Office of Inspector General (OIG) audit found that Medicare Part B improperly paid suppliers for durable medical equipment, prosthetics, orthotics, and supplies provided to hospice enrollees. Because payments to acute-care hospitals for outpatient services provided to hospice enrollees may also be at risk for being improper, OIG conducted an audit, to determine whether Medicare properly paid for these services from calendar years 2017 through 2021. According to the OIG report A-09-23-03024, Medicare Improperly Paid Acute-Care Hospitals an Estimated $190 Million Over 5 Years for Outpatient Services Provided to Hospice Enrollees , the OIG estimated that Medicare could have saved $190.1 million for our audit period if payments had not been made to acute-care hospitals that provided outpatient services to hospice enrollees for services related to the palliation and management of the enrollees’ terminal illnesses and related conditions.

Centers for Medicare and Medicaid Services (CMS) directed the SMRC to perform medical record review on supporting documentation to determine if hospital outpatient services provided to hospice enrollees and billed with condition code 07 palliated or managed the terminal illness and related conditions.

Reason for Review

The SMRC was tasked to perform data analysis and conducted medical record review on a sample of claims billed for hospital outpatient services provided to hospice enrollees with condition code 07 with dates of service January 1, 2022, through December 31, 2023.

The SMRC conducted medical record reviews in accordance with applicable waivers/flexibilities/statutory, regulatory, and sub-regulatory guidance.

Common Reasons for Denial

• Non-Response to the ADR
  • Refer to Internet-only Manual Pub 100-08, Chapter 3, Section 3.2.3.8, 42 CFR 424.5(a)(6) and Social Security Act Title XVIII, Section 1815(a), 1833(e), and 1862(a)(1)(A). No medical record documentation was received in response to the additional documentation request (ADR) letter.
• Services Related to Hospice
  • Refer to Internet-Only Manual, Pub 100-08, Medicare Program Integrity Manual, Chapter 3, Section 3.6.2.5 B; 42 CFR 424.5(a)(2). Documentation supports the provider was ineligible for payment at the time the service was rendered. The documentation submitted supported the service billed was related to the hospice diagnosis and/or related condition and therefore ineligible for reimbursement.
• Incomplete/Insufficient information
  • Refer to Internet-Only Manual, Pub 100-08, Medicare Program Integrity Manual, Chapter 3, Section 3.2.3.8 C, Social Security Act 1833(e), 42 CFR 424.5(a)(6). Incomplete/Insufficient information. The documentation submitted did not include the requested hospice medical records; therefore, it could not be determined if the patient’s hospice terminal illness and related conditions were separate from the service(s) billed.

References

Social Security Act (SSA) Title XI

• §1135 Authority to waive requirements during national emergencies

Social Security Act (SSA), Title XVIII

• §1815(a) Payment to Providers of Services
• §1833(e) Payment of Benefits
• §1861(s) Medical And Other Health Services
• §1861(dd) Definitions of Services, Institutions, Etc.-Hospice Care
• §1862(a)(1)(A) Exclusion from Coverage and Medicare as a Secondary Payer
• §1877(g) Limitations on Certain Physician Referrals
• §1879 (a)(1) Limitation on Liability of Beneficiary Where Medicare Claims are Disallowed

42 Code of Federal Regulations (CFR)

• §410.3 Scope of benefits
• §410.32(a) Ording diagnostic tests
• §411.15(k)(1) Particular Services Excluded from Coverage
• §418(B) Eligibility, Election and Duration of Benefits
• §418(F) Covered Services
• §418(G) Payment for Hospice Care
• §424.5(a)(2)(6) Basic Conditions

Federal Register

• Interim Final Rule with Comments, Volume 85, No. 66. Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID–19 Public Health Emergency. CMS-1744-IFC. Applicability March 1, 2020. Retrieved from 2020-06990.pdf (govinfo.gov)
• Final Rule Volume 85, No. 66, Medicare and Medicaid Programs; Policy and Regulatory Revisions in Response to the COVID–19 Public Health Emergency. Effective March 1, 2020. Retrieved from 2020-06990.pdf (govinfo.gov)
• Interim Final Rule with Comments (IFC) 85 FR 19230. Revisions in Response to the COVID-19 Public Health Emergency (CMS-1744-IFC). Effective March 1, 2020. Retrieved from CMS-1744-IFC

Internet-Only Manual, Medicare Benefit Policy Manual Publication 100-02

• Chapter (Ch.) 16, §10 General Exclusions from Coverage

Internet-Only Manual, Medicare Claims Processing Manual Publication 100-04

• Ch. 1, General Billing Requirements
• Ch. 11, §50 Billing and Payment for Services Unrelated to Terminal Illness
• Ch. 23, Fee Schedule Administration and Coding Requirements
• Ch. 30, §50 Advance Beneficiary Notice of Non-coverage (ABN)

Internet-Only Manual, Medicare Program Integrity Manual Publication 100-08

• Ch. 3, §3.2.3.2 Time Frames for Submission
• Ch. 3, §3.2.3.4 Additional Documentation Request Required and Optional Elements
• Ch. 3, §3.2.3.8 No Response or Insufficient Response to Additional Documentation Requests
• Ch. 3, §3.3.2.1 Documents on which to Base a Determination
• Ch. 3, §3.3.2.4 Signature Requirements
• Ch. 3, §3.4.1.3 Diagnosis Code Requirements
• Ch. 3, §3.6.2.1 Coverage Determinations
• Ch. 3, §3.6.2.2 Reasonable and Necessary Criteria
• Ch. 3, §3.6.2.5 Denial Types
• Ch. 13, §13.5.4 Reasonable and Necessary Provisions in LCDs

CMS Coding Policies

• National Correct Coding Initiative Edits (NCCI). NCCI Policy Manual for Medicare Services. §§ January 1, 2022, and January 1, 2023

Other

• Office of Inspector General (OIG). November 18, 2024. Medicare Improperly Paid Acute-Care Hospitals an Estimated $190 Million Over 5 Years for Outpatient Services Provided to Hospice Enrollees. Report Number A-09-20-03024. Retrieved from Medicare Improperly Paid Acute-Care Hospitals an Estimated $190 Million Over 5 Years for Outpatient Services Provided to Hospice Enrollees .

Last Updated Jan 16, 2026