Noridian Healthcare Solutions, LLC (Noridian), as the Supplemental Medical Review Contractor (SMRC) for the Centers for Medicare & Medicaid Services (CMS), is conducting post-payment review of claims for Hospital Outpatient Services for Hospice Enrollees billed with dates of service from January 1, 2022, through December 31, 2023. This notification includes the reasons for the review, documentation that will be requested in the Additional Documentation Request (ADR) letter, and resources providers/suppliers may wish to consult when submitting claims.

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

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

Claim Sample Detail

Access the related project details below:

• Documentation Requirements
• References

Documentation Requirements

Below is a list of specific documentation requirements that will be included in each ADR to obtain the necessary documentation to perform the review.

Providers/suppliers are requested to submit each of the Documentation Requirements outlined below, if and as applicable to the claim on review.

1. Hospice Notice of Election and addendum.
2. Hospice Certification of Terminal Illness (Initial and subsequent to cover billed dates of service), from Certifying Physician and Attending Physician (if applicable) including written and oral/verbal certification (if applicable) and Physician’s narrative
3. Any other documentation supporting the hospice terminal illness and related conditions, and the six-month terminal illness prognosis.
4. Documentation to support the code(s) and modifier(s) billed.
5. Any medical records from the place of services rendered, including but not limited to provider documentation of history, physicals, assessments, treatment plans, progress notes, diagnoses/conditions, diagnostic testing (including X-rays, MRI, CT results, etc.), lab tests, procedures, and any other pertinent information to document the medical necessity.
6. Any other supporting/pertinent documentation
7. Signature log or signature attestation for any missing or illegible signatures within the medical record (all personnel providing services)
8. Providers/suppliers are encouraged to review the documentation prior to submission, to ensure that signature information is available when authenticity is not conclusively documented. Please include a signature log or signature attestation for any missing or illegible signature within the medical record.
9. Medical record documentation to support national and local requirements for the hospital outpatient service, as applicable
10. Advance Beneficiary Notice of Non-Coverage (ABN)/Notice of Medicare Non-Coverage (NOMNC)
11. If Medical record documentation submitted via esMD: Beneficiary identification, date of service, and provider of the service should be clearly identified on each page of the submitted documentation.
12. Please Note: The supplier or provider is responsible for obtaining all documentation from the ordering/referring provider to ensure medical necessity criteria have been met.

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 Apr 1, 2025