Fast Fact and Concept #87: Medicare Hospice Benefit Part II: Places of Care and Funding

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Title: Fast Fact and Concept #87: Medicare Hospice Benefit Part II: Places of Care and Funding

Author(s): Robin Turner, MD

Hospice care can be elected by any Medicare beneficiary with a terminal illness. Fast Fact #82, "Medicare Hospice Benefit Part 1: Eligibility and Treatment Plan", described the Medical Hospice Benefit (MHB) eligibility and covered services. This Fast Fact will review where services are provided and the reimbursement system for hospice care.

Places of Care

Home. The majority (95%) of hospice care takes place in the home. Hospice team members visit the patient and family on an intermittent basis determined by the Plan of Care (See Fast Fact #82). Medicare rules do not require a Primary Caregiver in the home, but as death nears, it becomes increasingly difficult to provide care for a patient who does not have someone (family, friends, hired caregivers) who can be present 24 hours a day in the home.

Long-term care facility. 25% of patients in the US die in nursing homes. Medicare recognizes that this can be the residents ?home? and that the patient's "family" frequently includes the nursing home staff. Hospice care under the MHB can be provided to residents in addition to usual care provided by the facility. Individual hospice programs must establish a contract with the facility to provide hospice care. The MHB does not pay for nursing home room and board charges.

Hospice inpatient unit. Dedicated units, either free-standing or within other facilities, such as nursing homes or hospitals, are available in some cities. Permitted length-of-stay varies with the facility and it?s specific admission policies.

Hospital. When pain or other symptoms related to the terminal illness cannot be managed at home, the patient may be admitted to a hospital for more intensive management, still under the MHB. The inpatient facility must have a contract with the hospice program for Acute Care.


Medicare pays for covered services using a per diem capitated arrangement in one of four categories:

Routine Home Care ($100/day) Care at home or nursing home.

Inpatient Respite Care ($110/day) Care in an inpatient setting (nursing home or hospital) for short periods (up to 5 days) to give caregivers a rest.

General Inpatient Care ($550/day) Acute inpatient care for conditions related to the terminal illness (e.g. pain and symptom control, caregiver breakdown, impending death).

Continuous Home Care ($660/day) Provides acute care at home with around-the-clock care for a crisis that might otherwise lead to inpatient care.

The rates of reimbursement are fixed for each category of care on an annual basis, but they vary by geographical location. Cited rates are approximate and are intended to convey general orders of magnitude of payment. Payment is made from Medicare to the hospice agency, which then pays the hospital or nursing home (for respite or acute care), depending on the specifics of the contractual arrangement between the hospice agency and the hospital or nursing home.

Physician Services

Direct patient care services by physicians, for care related to the terminal illness, are covered by Medicare. If the attending physician is not associated with the hospice program, the physician bills Medicare Part B in the usual fashion. The bill must indicate that the physician is not associated with the hospice program or the claim may be denied. If the attending is associated with the hospice program, (Medical Director or Consultant), the physician submits the bill to the hospice program, which in turn submits the claim to Medicare under Part A; the physician is then reimbursed based on a contract with the hospice program.

Also see:
Fast Fact #82, Medicare Hospice Benefit Part 1: Eligibility and Treatment Plan
Fast Fact #90, Medicare Hospice Benefit Part III: Special Interventions


Federal Medicare Conditions of Participation for Hospice. 42 Code of Federal Regulations- Public health Part 418.

NHPCO Facts and Figures. January 2003. National Hospice and Palliative Care Organization. www.nhpco.org

von Gunten CF, et al. Coding and reimbursement mechanisms for physician services in hospice and palliative care. J Pall Med 2000; 3:157-164

Copyright/Referencing Information: Users are free to download and distribute Fast Facts for educational purposes only. Citation for referencing. Turner, R. Fast Facts and Concepts #87 . Medicare Hospice Benefit: Part II Places of Care and Funding. April 2003. End-of-Life Physician Education Resource Center www.eperc.mcw.edu.

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Creation Date: 4/2003

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