The U.S. Centers for Medicare & Medicaid Services (CMS) in its final hospice payment rule for 2022 provided clarification around the election statement addendum requirement. Since the rule became effective in Oct. 20, providers have been working to unpack the complex process of determining and documenting which services would not be covered by the Medicare Hospice Benefit.

CMS in July released its final rule for hospice payments in Fiscal Year 2022, including the Hospice Wage Index and Payment Rate, Hospice Conditions of Participation updates, and revised Quality Reporting Program requirements.

The addendum rule requires hospices to provide Medicare beneficiaries with a written statement called a “Patient Notification of Hospice Non-Covered Items, Services and Drugs,” describing the conditions, items, services or drugs that are considered unrelated to their terminal illness and not covered by the hospice benefit. Patients and their representatives have the option to request the notice upon electing hospice.

Hospices are adjusting to the new rules at a time when they are taking hard hits to operations, finances and staffing amid a global pandemic.

“I think the biggest thing for hospices is a process issue of tracking who received the addendum item and if there are other drugs, items or services that are not related,” Anne Shelley, director of home health and hospice regulatory relations for LeadingAge Ohio, told Hospice News. “It’s tricky to even initially give the hospice election, but to track and remember who has received them, requested them and then provide updates as needed — I think that’s the biggest challenge for hospice providers, just trying to make sure that process is updated when it needs to be.”

Regulation changes taking effect Oct. 1 include technical changes and clarifications to the addendum rule that addressed several concerns and questions that have been furrowing the brows of providers and industry stakeholders alike, including those related to timing and signature requirements, among others.

CMS codifying timeframes parameters of when the statement needs to be issued to patients is a helpful and important step towards compliance, but also a challenging process to manage that could pose operational challenges, according to Shelley.

Hospices have voiced concern about the limited time window to respond to patients, families or representatives requesting the addendum. Prior to the clarifications in the final rule, hospices were working with the understanding they must provide the written addendum within five days from the date of election if requested at that time, and within 72 hours if requested at any point after the date of admission.

CMS revised Conditions of Participation (CoPs) § 418.24(c)(10) to specify that hospices have five days from the date requested to furnish the addendum if it was requested within five days of election. If requested during the course of care, the addendum must be supplied within three days of request, rather than 72 hours from the request.

Providers must also give the addendum to patients or their representatives, regardless of request, when changes occur in what will not be covered through the hospice benefit.

Even without a request for the addendum, the hospice must document in some fashion that staff discussed what would be covered with the patient and their family at the time of election. A signed addendum indicates that the hospice discussed the addendum and its contents with the patient.

The 2022 rule also updated signature requirements. Previously, the time frames were based on the date of a patient or representative’s signature, rather than the time of election or admission.

The signature requirement created some initial confusion regarding how to comply when a patient refuses to sign the addendum, revokes the hospice benefit, is discharged or dies before signing. The 2022 revisions indicate that a hospice must clearly document the reason behind a lack of signature on the addendum and in the patient’s record to include the date it was furnished within the required time frame.

A lack of documentation could result in potential claim denial for these conditions for payment, leading to financial risks to providers who fail to comply, according to Theresa Forster, vice president for hospice policy at the National Association of Home Care & Hospice (NAHC), and Katie Wehri, NAHC’s director of home care and hospice regulatory affairs. Among these risks are potential penalties for noncompliance.

“The one issue that CMS did not address [in the 2022 rule] that remains a significant concern is denial of payment for all days of care associated with the claim until a compliant addendum has been provided,” Forster and Wehri told Hospice News. “We believe this to be a severe penalty and continue to urge CMS to revise the penalty structure so that it only penalizes hospices for the days it is out of compliance with the requirement. The clarifications provided by CMS in the rule will help reduce the number of instances of non-compliance. However, such a penalty is unprecedented and unreasonable.”

Since the addendum rule became effective, hospices have found that in general they have more conversations with patients and their families sooner in their course of care regarding unrelated services, according to Forster and Wehri. The new rule could stand to improve patient awareness and understanding of hospice.

Hospices should keep staff abreast of the regulatory changes, according to Forster and Wehri. This includes ensuring their addendum form includes the date furnished and updating policies and procedures to reflect the new language.

According to a 2019 report from the U.S. Department of Health and Human Services (HHS) Office of the Inspector General, one-third of election statements lacked required information for general hospice inpatient care, including documentation that the beneficiary waived coverage of curative services by electing hospice, or the physician’s narrative in documents certifying that the patient is terminally ill.

While hospices must ensure they are in compliance with the rule, many report that patients seldom request the addendum.

“The hospice industry welcomes transparency and providers want to do the right thing and make sure their patients and families understand what will and will not be paid for, so we don’t see the addendum as a horrible thing,” said Shelley. “What’s interesting is that not a lot of families are really requesting them. Hospices just haven’t seen a lot of use of the addendum yet. CMS made a big deal out of ensuring that there’s transparency and individuals are notified if they want to be about what is considered a hospice’s responsibility and what’s not, but ultimately there have been very few requests.”