CMS Issues New Hospice Coding Guidelines

On August 22, 2014, the Centers for Medicare & Medicaid Services (CMS) issued updated guidelines for hospice providers, Change Request (CR) 8877. This CR, which is effective on October 1, 2014, rescinds and fully replaces CR 8777. The updated guidelines relate to principal diagnosis coding and filing a notice of election of hospice benefits (NOE). The updated guidelines also provide clarification regarding the codes to be used for hospice care provided in a skilled nursing facility (SNF) and hospice care provided in a long-term care or non-skilled facility.

Principal Diagnosis Coding

Under the new guidelines, hospice providers must report the principal diagnosis "most contributory to the terminal prognosis." Any code listed under "Symptoms, Signs, and Ill-defined Conditions" may not be used as a principal diagnosis when the provider has confirmed a related, definitive diagnosis.

Further, codes for "debility" and "adult failure to thrive" are not accepted as principal diagnosis codes. Likewise, dementia codes may not be used as a principal diagnosis. However, where the dementia code falls under the classification "Mental, Behavioral, and Neurodevelopmental Disorders," the underlying condition must be coded as the primary diagnosis, with the dementia condition listed as a secondary diagnosis.

Filing NOEs

A NOE shall be filed within five calendar days after the hospice admission date. A NOE is considered timely filed when it is submitted to and accepted by a Medicare Contractor within five days after the hospice election. If the NOE is not timely filed, Medicare will not cover and pay for any of the days of hospice care from the hospice admission date through the date of the NOE submission. These days shall be a provider liability and may not be charged to the patient. If, for example, an NOE is filed on calendar day six, Medicare will not pay for any of the first six days of hospice care.

If a NOE is not timely filed, the provider may request an exception. The grounds for an exception are limited to the following:

• fires, floods, earthquakes or other unusual events that extensively impact a hospice providers ability to operate;
• a data filing problem due to a CMS or Medicare system issue that is beyond the control of the hospice; 
• a newly Medicare-certified hospice that is either notified of that certification after the Medicare certification date or that is awaiting its user ID from its Medicare contractor; or
• other circumstances, as determined by the Medicare contractor or CMS, beyond the control of the hospice.

Regardless of whether an exception is claimed, the hospice provider should initially report the claim with the occurrence code used to identify days for which the provider is liable.

Site of Service Codes Clarified

CMS clarified the difference between Healthcare Common Procedure Coding System Q5003 and Q5004, which relate to hospice care provided in a SNF versus care provided in a long-term care or non-skilled facility.

Hospice providers should use code Q5004 for hospice patients in a SNF under the following circumstances:

• the beneficiary is receiving hospice care in a facility that is certified solely as a SNF;
• the beneficiary is receiving general inpatient care in the SNF;
• the beneficiary is in a SNF receiving skilled nursing care under the Medicare SNF benefit for a condition unrelated to the terminal illness or related conditions and is receiving routine hospice home care (CMS warns that this is uncommon);
• the beneficiary is receiving inpatient respite care in a SNF.

If the beneficiary is in a SNF but does not meet the criteria above, the site shall be coded Q5003. Likewise, if the patient is in a long-term care or non-skilled facility, the site shall be coded as Q5003.