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Hospice Series Part 2: Coding Hospice Claims

Correctly coding hospice claims and documenting related and non-related diagnoses just became even more important in avoiding claim denials and reducing payment liability. On November 7th CMS issued a change request 8273 which provides instructions for Medicare inpatient hospital claims billed with a condition code of 07 or "treatment of non-terminal condition for hospice" be denied when the principal diagnosis on the hospital inpatient claim matches one of the hospice diagnosis codes. This could mean potential payment liabilities for inpatient hospitalizations previously determined to not be part of the patient's hospice plan of care. While further clarification from CMS is being pursued by state and national associations, hospices should review and refine internal diagnosis determination and coding processes prior to the effective date for this action, which is April 1st, 2014.

CMS continues to re-state that hospices are essentially responsible for covering all services related to the terminal illness and related conditions stating, "Unless there is clear evidence that a condition is unrelated to the terminal illness, all services would be considered related. It is also the responsibility of the hospice physician to document why a patient's medical need(s) would be unrelated to the terminal illness" (48 FR 56010 through 56011). This position from CMS leads to the clarification that, should a hospital bill for services as not related to the terminal illness and the hospice claims include the same diagnoses the patient was hospitalized for, hospice should cover the costs for the inpatient hospitalization.

Many hospices do not have clear processes or documentation signed and dated by the medical director or hospice physician describing what conditions are related to the terminal illness as well as what is not related and why. Many documentation systems, both paper based and computerized, do not clearly provide for gathering this documentation requiring hospices to create processes external to their electronic systems. In order to avoid future claim denials, hospices should ensure that they implement clear and defined processes to document the related diagnoses. Medications related to these diagnoses and conditions should also be part of this documentation. At admission and minimally at re-cert, the hospice medical director or hospice physician should document this information and periodically update it as the patient's condition changes and medications are added or discontinued.

Coding the diagnoses should follow the related and non-related determination by the medical director or hospice physician. It is important to note that only the related conditions should be coded on the Medicare claim. Hospices should take care to avoid having non-related diagnoses on the claim as this could create potential future payment liabilities for inpatient stays. Hospices that are part of a home care agency and use the home care staff to code should pay particular attention to the different requirements for coding between home care and hospice. Home care coding practices are to code diagnoses related to the home care plan of care, whereas in hospice the diagnoses codes are those related to the terminal illness. Hospices should ensure that the codes on claims match the documentation of the hospice physician for diagnoses that are related to the terminal illness.

Simione has a team of hospice experts who can assist with all aspects of hospice operations and service delivery, including the relationships between hospice/long term care facilities to insure quality patient care, compliance, and successful operations in accordance with applicable regulations and industry best practices. Contact Simione to see how we can assist you with your hospice needs. 800-949-0388 or [email protected]

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