The Medicare Hospice Benefit: What It Means for You and Your Patients

In 2021, approximately 1.74 million Medicare beneficiaries were enrolled in hospice care for one day or more, equating to 47.3 percent of all Medicare decedents that year.¹ Care costs relating to the terminal diagnosis are 100 percent covered by the Medicare Hospice Benefit.

Eligibility for the Medicare Hospice Benefit

Initial and ongoing requirements for a beneficiary to be eligible to receive hospice services under the Medicare Hospice Benefit include:

• Eligibility: A patient must be eligible for Medicare Part A
• Informed consent: The beneficiary must agree that they wish to receive "palliative, not curative, care" and to surrender all other Medicare benefits relating to the terminal diagnosis, with the exception of the professional services of their attending physician
• Initial prognosis: The attending physician and the hospice medical director or team physician must certify that the patient has a "medical prognosis that his or her life expectancy is six months or less, if the illness runs its normal course"
• Ongoing prognosis: At successive intervals of 90-, 90- and unlimited 60-day periods, a hospice physician must certify that the patient's prognosis continues to be six months or less from the date of the most recent certification. Patients are visited by a physician starting with the third benefit period (usually 180 days) to determine their continued appropriateness for the benefit. Patients continue to receive the benefit for as long as they qualify for hospice care. If hospice care improves patients' health or halts ongoing decline, they are returned to routine Medicare coverage. Patients can become eligible again for hospice care if their health declines and their prognosis certifies them for hospice coverage.

While individual patients may receive hospice services for periods beyond six months, Medicare has a "global cap" on the total annual monies that a hospice can receive. This global cap forces hospices to work closely with community physicians to ensure patients' appropriateness but does not "punish" a beneficiary or their physician if they are fortunate enough to live beyond six months.

Reimbursement Under the Medicare Hospice Benefit

The hospice

Hospices are paid a per-diem rate. This rate covers all professional services, ancillary supplies and equipment defined by the Medicare Hospice Benefit that relate to the patient's terminal illness and are documented in the plan of care. There is no need to defer hospice care due to financial concerns.

The per-diem rate varies by level of care and by the location where the service is delivered. All hospices in a local market receive the same per-diem rate from Medicare for the same level of service.

The per-diem rate includes the program medical director's general supervisory services and the team physician's participation in developing the patient's plan of care.

Home or inpatient physician visits made by a hospice physician are reimbursed outside the per-diem rate.

A patient's existing or attending physician can continue to direct the clinical care after the patient is on hospice service. Or, if the patient or their doctor wishes, a VITAS physician can direct the care related to the primary illness.

The attending physician

The Medicare Hospice Benefit defines the attending physician as an MD, DO, PA or NP who "is identified by the individual, at the time they elect hospice care, as having the most significant role in the determination of the individual's medical care."

The attending physician can continue to bill Medicare Part B for professional services including office, home and inpatient visits.

Laboratory studies, X-rays or other diagnostic tests necessary for proper treatment of the terminal illness are covered under the hospice per-diem rate. The hospice must have a contract with all providers of these or other tests or procedures. VITAS requires that a physician and/or provider receive prior authorization for performing any procedures or tests.

The consulting physician

To be reimbursed by a hospice, a consulting physician must have a contract with the hospice. VITAS requires prior authorization for consulting physician services.

The patient and family

The Medicare Hospice Benefit is an inclusive benefit. VITAS charges no copayments. All products and services in the plan of care are paid for by VITAS.

Care clearly unrelated to the terminal illness continues to be covered by Medicare Parts A and B, with all normal rules applicable, e.g., co-payments, coverage guidelines and deductibles.

VITAS Healthcare has been caring for advanced illness patients since 1978. As a Medicare-certified hospice, VITAS provides the following, free to patients and their families:

• Physician services to assist in the palliation of the terminal illness and related conditions
• All prescription drugs, over-the-counter medications, medical equipment and supplies related to the patient's terminal illness and needed for enhanced comfort, as designated in the plan of care
• An organized program of services to meet the bereavement needs of the family for at least one year after the beneficiary's death
• A nurse to supervise the plan of care and provide hands-on care and patient/family education
• Certified hospice aides to provide personal care and assist with activities of daily living
• If indicated for palliative purposes, physical therapy, occupational therapy, speech therapy and dietary counseling
• Lab and other diagnostic tests necessary to achieve optimum palliative care
• Community volunteers who must, by statute, provide 5 percent of all patient care hours
• Chaplains to provide pastoral care according to each patient's unique spiritual needs and wishes
• Social workers to focus on the emotional, financial and social stresses associated with terminal illness
• Inpatient care for pain and other symptoms that cannot be managed at home

In which setting does Medicare pay for the hospice benefit?

When your patient is ready for hospice care, share the following information to help them understand their options: Who Pays for Hospice?

¹Medicare Payment Advisory Commission. (2023). March 2023 Report to the Congress: Medicare Payment Policy.