Hospice and Medicare Part D: Get the Facts

Hospice and Medicare Part D: Get the Facts. New CMS Guidance.


Medicare Part D is a Federal program designed to subsidize the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries.  In 2014 Medicare paid over 77 billion dollars in Part D benefits serving more than 37 million beneficiaries.  Part D administration depends on extensive coordination and information sharing between the Federal and State agencies, healthcare providers, drug plan sponsors, contractors and third-party payers.

Hospice programs are required to provide individuals receiving Hospice care with drugs and biologicals related to the palliation and management of the terminal illness defined in the Hospice plan of care.  Medicare pays the Hospice agency for each day in which the patient is receiving hospice care, regardless of the amount of care received on a given day.    Hospice is a Medicare Part A benefit and drugs provided by the hospice are covered under the Medicare payment to the hospice program and not covered under Part D.

Prescription drugs may be covered under the Part D benefit for the patient receiving Hospice care if the drug is unrelated to the terminal prognosis of the individual.   In 2012 the Office of the Inspector General (OIG) identified situations in which Medicare was paying twice for prescription drugs for hospice beneficiaries, and those beneficiaries may be paying unnecessary copayments for prescription drugs.  The report indicated that most hospice beneficiaries generally experience common symptoms during the end of life regardless of the terminal diagnosis.  These symptoms include pain, nausea, constipation and anxiety.  The OIG worked with the National Hospice and Palliative Care Organization (NHPCO) to identify 4 common categories of prescription drugs that are typically used to treat these symptoms:  antinauseants, laxatives, analgesics, and antianxiety drugs.  These categories of drugs should be covered under the Hospice benefit; however, some instances occur in which 1 or more of these drug categories may be unrelated to the terminal diagnosis of the beneficiary.  In these situations the Part D benefit is responsible for coverage of the drug and the patient assumes any copayment required.

It is beneficial for the provider to understand the steps involved from the Medicare Part D plan sponsor in the coverage or rejection of the claim.

  1. Once the plan sponsor receives a pharmacy claim, for the beneficiary who has elected Hospice and the drug falls into the 4 common categories, the claim may be rejected using the National Council for Prescription Drug Programs (NCPDP)-approved reject coding.
Code Description
A3 This product may be covered under Hospice-Medicare A
75 Prior Authorization Required
569 Provide Notice:  Medicare Prescription Drug Coverage and Your Rights

2. Plan sponsors are required to provide a point of sale message that states:

“Hospice Provider- Request Prior Authorization for Part D Drug Unrelated to Terminal Illness or Related Conditions”

This message should also include the 24 hour pharmacy help desk number to call with questions.

3. The beneficiary, beneficiary’s representative, or prescriber may contact the plan sponsor to request a coverage determination.

  • The sponsor can contact the prescriber to complete the Prior Authorization (PA) form.
  • The prescriber can provide a verbal explanation to the sponsor as to why the drug is unrelated to the terminal illness or related conditions or complete the PA form and submit it to the sponsor by fax or mail.
  • If the prescriber is unaffiliated with the Hospice provider and is unable or unwilling to coordinate with the Hospice provider to provide the statement, the plan sponsor can contact the Hospice Provider for the statement that the drugs are unrelated to the terminal illness or related conditions or complete the PA form.

In some instances the plan sponsor may contact the Hospice provider and receive information that the drug is related to the terminal illness or related condition but it has been determined to be a beneficiary liability.  Once the plan sponsor has received the statement that a drug is unrelated to the terminal illness or related conditions the adjudication process can take no more than 24 hours for expedited requests or 72 hours for standard requests.  (Section 30.2 Chapter 18 Medicare Drug Benefit Manual)

Beneficiary liability indicates that the patient is assuming responsibility for the cost of the drug.  Beneficiary liability can occur when the Hospice interdisciplinary group has determined, after discussion with the patient and family, that the existing medication/s may no longer be effective in the intended treatment and/or may be causing negative symptoms in the individual.  The medications would not be covered under the Medicare Hospice benefit as they would not meet the requirements of reasonable and necessary for palliation of pain and/or symptom management.  The patient may choose to have these medications filled through their pharmacy, if this occurs then the medications then become a beneficiary liability for payment and the cost of the medication would not be covered under Medicare Part D.  A patient may also request a drug for his/her terminal illness that is not included in the Hospice formulary and the beneficiary refuses to try a formulary equivalent first; or the drug has been determined by the Hospice provider to be unreasonable or unnecessary for the patient’s palliation of pain and/or symptom management.  The drug then becomes a beneficiary liability and no payment for the drug will be made under the Part D benefit.

Hospice providers are encouraged to use the PA form prospectively to prevent the drug claim from rejecting at the point of sale for those drugs that fall into the 4 common categories that are unrelated to the terminal prognosis and the patient is prepared to obtain the drug.  Section II of the PA form is not required, however, as Part D plan sponsors complete retrospective reviews of medications covered under the Part D benefit that fall into the 4 common categories while the patient receives care under the Hospice benefit, the provider would find that incorporating the completion of section II in their practice would mitigate any questions in the future.

The information covered in this article represents a fraction of the complexities associated with regulations that govern payment under Medicare benefits.  Select Data is dedicated to assisting your agency in answering these questions to enable you to meet the needs of your patients.  As an expert in the language of CMS, Select Data has over 25 years of preparation to service you.

Check out our FREE 30-minute webinar for OASIS-C2 corrections and more. Select Connects with Clinicians webinar on December 14, 2016. Click here to read more.
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