A hospice patient waives the right to receive other Medicare benefits “related” to the terminal illness.  In turn, the hospice must provide any care necessary for “pain or symptom relief.”  Focusing upon this waiver/assumption of liability, CMS is now redefining the scope of a hospice’s duty, requiring hospices to pay for “virtually all” prescription drugs and other care given to hospice patients.

In early 2013, CMS revisited hospice reporting requirements on billing.  CMS issued a reminder of the requirement that a hospice must code for all co-morbidities and also announced the phase-out of failure to thrive and debility as primary diagnoses.  Both instructions ensure that a hospice’s responsibility for any admitted patient will be broad, the first by broad listing of any co-morbidities, the second by requiring more concrete primary terminal diagnoses.  These reporting requirements help set up review of the hospice’s duty to cover any “related” care.

In guidance issued in October and December,[1] CMS explores a hospice’s dual obligation to cover any medical care (including drugs) for any related condition but to limit such care to pain or symptom relief.

CMS concedes that historically it has viewed the hospice “related care” question as one to be addressed on a “case-by-case basis” considering the “wide variation of patient circumstances.”  To date, CMS has shown deference to providers on this question.

But CMS now states that separate Medicare coverage will only be available to hospice patients for conditions “completely unrelated,” noting for the first time that hospices are required to provide “virtually all care” needed by terminally ill patients and that unrelated care would be “extremely rare.”  CMS notes that many illnesses are “brought on by the underlying condition of the patient.”  These appear to be new standards that will require broad assumption of liability by hospices.

Less conspicuously, CMS tackles the question whether there are certain drugs that are inappropriate for hospice patients.  CMS notes that the hospice benefit only provides coverage for drugs “used primarily for the relief of pain and symptom control.”  CMS notes correctly that by electing hospice, patients are moving from a “curative model of care” to a “palliative model.”  But, because drugs provided by hospice are covered by the per diem and not separately paid by Medicare, CMS’ interest here appears to be to restrict access to certain drugs and treatments that might extend a patient’s life.  CMS has not yet defined any category of drugs as improper (i.e., antibiotics, chemotherapy).

Initially (October 30), with respect to what a hospice must cover, CMS took the initial step of indicating that it would view any analgesics (pain medication) as necessarily related to the terminal illness.  (October 30.)

In December, CMS expanded its analysis to apply to almost any conceivable medication, stating that “only very rarely” will a beneficiary take drugs not covered by the hospice.  (December 6.)

In these publications, CMS advises drug plan sponsors to track hospice patients and limit approvals of medications for them; and, if medications are given, sponsors may in some cases look to hospices for reimbursement.  In turn, CMS notes that hospices may refuse certain medications to patients; in turn, patients have appeal rights.  To mediate all of this, CMS will establish an independent reviewer.  According to a new Part D webinar, hospices will soon be “presumed responsible” for any medications given to a hospice patient.

Hospices should anticipate claims for payment where its patients receive drugs through Part D from any other providers.

To show the extent of this new thinking, consider CMS Change Request 8098 (September 30, 2013).  Although CMS has now indicated its intent to rescind this CR, the CR is still instructive on the thinking within CMS.  In this CR, CMS imposed a pre-payment edit to preclude payment to non-hospice providers for vaccinations of hospice patients (i.e., flu, PPV, Hepatitis B).

Although vaccines typically protect against diseases not then present in a person, CMS provided that the hospice alone should decide if a terminally ill patient would get such vaccines; and, if a hospice determined to vaccinate a patient, the hospice would then bill for such vaccines (presumably as unrelated care).  Of all treatment, it seems that vaccines might arguably be the least directly related to a terminal illness, as they are not present at the time of vaccination.  And yet, before rescinding this CR in response to questions, CMS tried to cabin vaccination decisions at the hospice level, showing the extent of CMS’ view that “virtually all care” should be through the hospice.

More than anything else, these recent changes seem to reflect CMS’ core desire to contain cost, both by ensuring that hospices pay “virtually all” costs associated with medical care (including drugs) of terminally ill patients and also, where possible, to limit the lives of such hospice patients (and thereby limit the cost of such lives).

CMS has not yet imposed a broader rule precluding any type of care to hospice patients by other providers, but these pronouncements could be early steps toward such a rule.

After years of slogging with modest success through hospice medical necessity audits, perhaps CMS has altered is strategic approach to cost containment.  The relatedness doctrine, now finding application in the prescription drug context, will likely find broader application.

[1] Clarification of Recovery of Part D Payment for Pain Medications for Beneficiaries Enrolled in Hospice, October 30, 2013 (published to Part D Plan Sponsors by Medicare Program Integrity Group and Medicare Drug Benefit and C&D Data Group); and Part D Payment for Drugs for Beneficiaries Enrolled in Hospice – Request for Comments, December 6, 2013 (published by Medicare Program Integrity Group, Medicare Drug Benefit and C&D Data Group, and Chronic Care Policy Group).