Hospice to OIG: Medication Billing Not So Simple

Federal watchdogs recently called out the hospice industry on medication billing practices on the grounds that Medicare was paying twice for some drugs, but many hospices feel they lack clear direction as to what should be covered as they contend with the inherent complexity of diagnostic processes.

Hospices nationwide billed Medicare Part D a combined $160.8 million for medications that should have been covered under the Medicare Hospice Benefit, according to a new report from the U.S. Department of Health and Human Services Inspector General (OIG). 

Hospices conduct a comprehensive assessment when patients are admitted that includes a review of the patient’s medications to determine which should be eliminated, added or maintained. Regulations stipulate that the hospice should cover medications that pertain to the patient’s terminal diagnosis and receive reimbursement through their per diem Medicare payment, whereas drugs associated with other conditions should be covered by Part D or paid for by the patient or family.


A classic example would be a cancer patient who also suffers from diabetes. The hospice would cover any medications related to the cancer or palliation of symptoms like anxiety, pain, nausea or constipation, but in many cases wouldn’t necessarily cover the diabetes medications.

Determining which medications are associated with a terminal diagnosis is more complicated than it may sound.

“The complexity is mind-boggling because there are so many parts to this,” said Judi Lund Person, vice president, regulatory and compliance, for the National Hospice & Palliative Care Organization (NHPCO). “The relationship between Part D and the Medicare Hospice Benefit is really hard to navigate, and [the U.S. Centers for Medicare & Medicaid Services (CMS)] said that they will not provide additional guidance on what should or should not be covered.”


In many cases a medication that is typically used to treat technically non-germaine conditions may be necessary to palliate a particular patient’s symptoms. An instructive example is heart failure patients who need to continue some treatments, such as blood pressure medications, that are often discontinued for most patients upon admission to hospice.

“Heart failure patients in hospice need a little more than the standard palliation of symptoms that most patients receive,” Janet Roman, director of Empath Health’s cardiac program, told Hospice News. “It’s common for patients to cease some medications, such as blood pressure medication for example, when they enter hospice. But these patients’ hearts can’t effectively circulate blood if the pressure is high. In hospice our program continues the patients’ medications and advanced therapies consistent with symptom management.”

The NHPCO in a statement called the OIG report an opportunity to reexamine Medicare Part D policy to clarify billing and payment practices and promote greater transparency.

Despite the complexities, hospices definitely have room to improve. OIG identified the most frequently occurring error associated with hospice medications being reimbursed through Part D: The hospice may not be aware of all the medications the patient is taking.

In many cases the patient sought a physician without informing the hospice, received a prescription that was taken to an outside pharmacy which billed the medication to Part D. This could indicate communication deficiencies between the hospice and its patients.

“For the majority of errors, the hospices stated that they had no knowledge that a prescription was filled by an outside pharmacy (a pharmacy not typically used by the hospice),” the OIG report stated. “CMS officials told us that hospice staff must be sure they are communicating with the patient and patient’s family and should know every drug the patient is taking, that not knowing which drugs a patient is taking is a direct violation of the conditions of participation, and that patient harm could occur if the staff responsible for a patient’s health do not know what drugs the patient is taking.”

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