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Hospice Proposed Rule Part 1: A Look at Clinical Relatedness, Diagnosis Coding and Non-Hospice Spending


Simione Healthcare Consultants is pleased to publish this first of several updates to review key components of the FY2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting proposed rule.  This installment covers clinical relatedness, including diagnoses on claims and non-hospice spending.

With the April 30 release of the 2016 Hospice Wage Index Proposed Rule, CMS continues to remind providers of the original requirements for hospices to cover ‘virtually all’ care required by hospice beneficiaries at the end of life.  “In the December 16, 1983, Hospice final rule (48 FR 56010 through 56011), regarding what is related versus unrelated to the terminal illness, CMS stated: ‘…we believe that the unique physical condition of each terminally ill individual makes it necessary for these decisions to be made on a case–by-case basis.  It is our general view that hospices are required to provide virtually all the care that is needed by terminally ill patients.’  Therefore, unless there is clear evidence that a condition is unrelated to the terminal prognosis, all conditions are considered to be related to the terminal illness.  It is also the responsibility of the hospice physician to document why a patient’s medical needs will be unrelated to the terminal prognosis.”  

CMS reports that since the inception of the hospice benefit the coverage determinations by hospices for what is related or not related to the terminal prognosis has gradually lead to additional spending outside of the Medicare Hospice Benefit.  The data analyzed demonstrated that significant Medicare dollars were being spent outside of the hospice benefit for hospice patients with an active hospice election.  Non-hospice Medicare expenditures occurring during a hospice election in FY 2013 were $694.1 million for Parts A and B spending plus $347.1 million for Part D spending, or approximately $1 billion dollars total.  Additionally, hospice beneficiaries incurred additional costs associated with co-payments and cost sharing related to the Medicare Part A, B and D spending, bringing the total non-hospice costs paid by Medicare or beneficiaries for items or services during a hospice election to over $1.2 billion in FY 2013.

The 2016 proposed rule describes four case studies conducted by Medicare contractors to analyze this carved-out spending on hospice patients.  These case studies demonstrated the amounts of non-hospice spending on patients with four common hospice diagnoses:

  • Lung Cancer
  • Congestive Heart Failure
  • COPD
  • Cerebral Degeneration

 

Non-hospice spending for patients with Lung Cancer, CY 2013

Type of Service

Description

Total Payment

Drugs/Part D

Common Palliative Drugs

$851,639

Drugs/Part D

Anti-neoplastics (chemotherapy)

$1,321,507

DME

Oxygen Equipment and Supplies

$454,068

DME

Hospital Beds

$47,781

DME

Wheelchairs

$138,316

Part B Inst.

Diagnostic Imaging

$341,601

Part B Inst.

Radiation

$250,171

Total

 

$3,405,083

 

Non-Hospice spending for patients with Chronic Airway Obstruction (COPD), CY 2013

Type of Service

Description

Total Payment

Drugs/Part D

Common Palliative Drugs-26

$1,757,326

Drugs/Part D

Anti-asthmatics & Bronchodilators

$6,545,089

Drugs/Part D

Corticosteroids

$141,179

Drugs/Part D

Respiratory Agents

$148,793

DME

Oxygen Equipment and Supplies-27

$525,276

DME

Hospital Beds

$480,854

DME

Wheelchairs

$196,692

Part B Institutional

Diagnostic Imaging

$605,110

Total

 

$10,400,319

 

Non-Hospice spending for patients with Cerebral Degeneration, CY 2013  

Type of Service

Description

Total Payment

Drugs/Part D

Common Palliative Drugs

$1,184,005

Drugs/Part D

Antipsychotic/Anti-manic Agents

$2,336,504

Drugs/Part D

Psychotherapeutic & Neurological Agents

$6,752,270

DME

Hospital Beds

$138,249

DME

Wheelchairs

$252,228

Part B Inst.

Diagnostic Imaging

$496,790

Total

 

$11,160,046

 

Non-Hospice spending for patients with Congestive Health Failure, CY 2013

Type of Service

Description

Total Payment

Drugs/Part D

Common Palliative Drugs

$1,229,748

Drugs/Part D

Diuretics

$334,700

Drugs/Part D

Beta Blockers

$363,480

Drugs/Part D

Anti-hypertensives

$584,799

Drugs/Part D

Anti-anginal Agents

$468,333

Drugs/Part D

Cardiovascular Agents – Misc

$799,605

Drugs/Part D

Vasopressors

$43,496

DME

Oxygen Equipment and Supplies

$471,376

DME

Hospital Beds

$96,219

DME

Wheelchairs

$275,940

Part B Inst.

Diagnostic Imaging

$690,726

Part B Inst.

EKGs

$72,933

Part B Inst.

Cardiac Devices

$242,819

Part B Inst.

Diagnostic Clinical Labs

$79,999

Part B Prof.

Diagnostic Clinical Labs

$64,698

Total

 

$5,818,871

 

These data findings have raised the concern of CMS regarding the unbundling of the Medicare hospice benefit by providers that may have issues with care coordination and beneficiary comprehension, or those that are simply attempting to control costs.  Another concern is the statement that these findings would be provided to policymakers for potential future rulemaking.

Hospices should view their internal practices and documentation regarding the decisions to cover or not cover items for hospice patients, ensuring that the documentation of the hospice physician supports the rationale for not covering medications, treatments, or care items.  As stated in the original hospice rules – this decision is the hospice physician’s, and not a nursing or management decision.  As an industry, we should expect further scrutiny in relation to coverage decisions based on these findings.

Hospice Diagnosis Coding

In October 2014, hospices were to follow the ICD-9 diagnosis coding guidelines or have their claims returned to provider (RTP).  The guidance from CMS was that hospices cease coding for certain non-specific diagnoses (Debility and Adult Failure to Thrive) as primary hospice diagnoses, and were to use the required manifestation codes for Alzheimer’s disease and dementias.  This guidance also stated that hospices were to code all diagnoses related to the terminal prognosis, leaving all non-related diagnoses off the claim.  CMS reported that in 2013 more than 77% of hospices were reporting only one diagnosis on claims which did not correlate with the multiple conditions patients have at the end of life.  This has improved to 49% in 2014.

In the 2016 proposed rule, CMS is recommending that hospices report ALL diagnoses for the patient on the claim, whether related or unrelated to the terminal prognosis of the individual, including the reporting of any mental health disorders and conditions that would affect the plan of care. ICD-10-CM coding guidelines stipulate that all diagnoses affecting the management and treatment of the individual in the health care setting are required to be reported. Using the coding guidelines for ICD-9-CM and ICD-10-CM diagnosis and procedure codes is required under the Health Insurance Portability and Accountability Act (HIPAA), as well as the hospice billing regulations.  Utilizing the appropriate diagnosis codes on hospice claims has been a longstanding regulation.  The new enforcement in 2014 and the addition of all diagnoses would allow for additional data review and potential further payment reforms for hospice services in the future.  This reinforces the need to accurately code the patient’s condition and the changes in the patient’s condition throughout the course of care.

Source: CMS