Hospice Patients Alliance: Consumer Advocates

Liability for Payment:
Covered and Non-Covered Expenses

Normally, families of hospice patients would not be receiving bills for hospice services since hospices receive reimbursement for those covered hospice services from Medicare or private insurance. However, in some instances, families of hospice patients are receiving bills, and they are often confused by these bills. In certain cases, the bills are actually improper and are attempts by a hospice to get paid twice for the same services (fraud). Sometimes the bills are completely proper. Families ask whether or not they have to pay for these bills relating to services, equipment, medications, or other items provided to their loved one.

Services, equipment, medications and other items fall into two main categories which need to be understood: "Covered Services" and "Non-Covered Services." Hospices are responsible to pay for the expenses of all covered hospice services out of the reimbursement they receive from the Medicare program or other insurance company For example, the hospice itself must pay for all medications which are used to manage symptoms which are due to the terminal illness. The hospice may charge a small co-payment of up to $5.- per prescription.

Any covered services which are included as part of hospice can not be billed to the patient or family by a hospice. If the hospice did so, and some "rogue" hospices are doing so, that would be health care fraud. Why? Because it would amount to billing twice for the same set of services: getting paid by Medicare or another insurance company first, and then getting paid again (for the same services) by the patient and family.

Hospice Billing Others for Covered Services Is Prohibited

The Medicare Hospice Manual, Publication 21, chapter 4, reimbursement for hospice care states at Section 411:

"Section 1866 of the Social Security Act requires providers (including hospice providers) to file an agreement with the Secretary of Health and Human Services in order to be qualified to participate and to be eligible for payment under the Medicare program. In this agreement, the hospice agrees not to charge (and accordingly may not charge) any individual or any other person for items or services for which the individual is entitled to have payment made under the hospice provision. .... a hospice may not bill a third party such as an insurance company ... for covered palliative drugs and biologicals for which payment is made through the Medicare rates."

"If a hospice furnishes, at the request of a beneficiary, items or services in addition to those that are covered under the hospice provision, the hospice may charge the beneficiary for these items or services. [emphasis added]

Written Notice Required Before Services Provided

A hospice must provide written notice to the patient and family before providing any service that the hospice intends to charge the patient and family for. And, the hospice can only properly bill for services which are not covered under the hospice benefit. This means that if the hospice wishes to bill you for any noncovered services or other items, it must truly inform you (and do so in writing) that it will charge you for those services, before the service, equipment or other item is provided.

Even if the hospice inaccurately tells you that the service is "not covered" (and therefore they claim that they can charge you), and it actually is covered, the hospice still has to provide written notice to you beforehand that they intend to bill you for the service. Then, you would have, in writing, a notice that they would be billing you for services which are covered and for which they are not allowed to bill. So, hospices that are improperly billing for actually covered services do not normally provide written notice beforehand that they intend to bill you; they just send a bill and hope to get paid by you and Medicare as well! In any case, a hospice cannot "surprise" you after the services, equipment or other items were provided and just send you a bill "out of the blue" without providing written notice beforehand.

The Medicare Hospice Manual from the Health Care Financing Administration (HCFA) [now called Centers for Medicare Services] Publication 21 states:

Chapter 2, Eligibility and Coverage, Section 274.1, "Notifying Patient of Noncoverage"

"If you are aware that the services furnished a patient are not covered, advise the patient (or his representative) in writing prior to or at the time of start of care (or at the time the type of care changes) that the care is noncovered and that no claim for Medicare reimbursement will be submitted."

If you have questions about any bills you receive for hospice services, first try to determine if the services, equipment or other items are "covered" services or not. If the bill is for hospice services which are definitely covered under the Medicare or insurance benefit, the hospice is not permitted to bill you for those services! You may wish to contact the hospice's billing staff and hospice director to discuss the bill.

If the hospice insists that you pay for services which are part of the hospice benefit, even after you question those charges, you may wish to file a complaint to the U.S. Office Of Inspector General. See Links to Report Fraud.

Note: this information is provided here due to complaints the Hospice Patients Alliance has been receiving from the public about hospices that actually are improperly billing them for covered hospice services.

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