The Medicare Hospice Benefit and Medicare Part D

April 18, 2014Janis Bivins, RN

Marilyn Tatro, RNJohn Gochnour, Esq.

The Medicare Hospice Benefit◦ Patient is eligible for Medicare Part A;◦ Patient is certified as terminally ill: which is a

prognosis of six months or less if the illness runs its normal course;

◦ Elects to receive hospice, and agrees to waive rights to curative treatment for terminal illness.

-42 C.F.R. 418.20 Hospice Services covered by the Benefit:

◦ services that are reasonable and necessary for the palliation and management of the terminal illness and related conditions. 78 F.R. 27827

Includes: nursing care; physical therapy; occupational therapy; speech- language pathology therapy; medical social services; hospice aide services; physician services; homemaker services; medical supplies (including drugs and biologics)…

“Hospices are required by Section 1861(dd)(1)(e) of the Act to furnish all drugs and supplies related to the terminal illness and related conditions.” 73 F.R. 32088, 32145

“Drugs and Biologicals related to the palliation and management of the terminal illness and related conditions, as identified in the hospice plan of care, must be provided by the hospice…” 42 C.F.R. 418.106

CMS’s Concern: Drugs covered under the Medicare Part A Hospice benefit are being inappropriately billed to Part D.

2010: 750,590 hospice beneficiaries enrolled in Part D

198,543 of those beneficiaries received 677,022 prescriptions believed to be appropriately covered under Hospice benefit

Cost: $33,638,137 by Part D; $3,835,557 unnecessary copayments◦ Key OIG Issue Areas: analgesics, anti-nausea,

laxatives, anti-anxiety. Since September 2012 Medicare has encouraged sponsors to obtain Prior Authorization (“PA”) for these drugs.

Hospice is responsible for drugs that are (1) reasonable and necessary for the palliation and management of the (2) terminal illness and related conditions.

Two key Questions:◦What is a related condition?◦What is reasonable and necessary?

We are responsible for determining the answer to both.

We simply must be able to explain why and how we reached our conclusion and show thorough documentation supporting the decision.

Reviewed on a case by case basis: “The unique physical condition of each terminally ill individual makes it necessary for these decisions to be made on a case–by-case basis.”

CMS’s aggressive position: ◦ The statutory waiver is broad and “hospices are required to

provide virtually all the care that is needed by terminally ill individuals.” CMS Letter Dec. 6, 2013

◦ “When an individual is terminally ill, many health problems are brought on by underlying condition(s), as bodily systems are interdependent.” 78 F.R. 27826

◦ Therefore: “Unless there is clear evidence that a condition is unrelated to the terminal illness, all services would be considered related.” 78 F.R. 27827

Question:◦ Can we provide clear evidence documenting

that the drug should be considered unrelated?

The hospice physician and inter-disciplinary team (“IDG”), in consultation with the patient’s attending physician—determine if a drug is reasonable and necessary.

***If a drug is determined to be related, but not reasonable and necessary,

whether because it is ineffectiveor causes negative systems, Medicare prohibits the hospice or Part D from paying for the Medication.

Hospice Formulary:◦ Hospice may determine what drugs it will carry on its

formulary.◦ Hospice may work from its formulary first in finding

medications to provide pain and symptom relief for their patients.

◦ But prescribed medications must meet the needs of the beneficiary. If formulary drugs are not working the hospice must provide an alternative drug if the formulary drug is not providing the necessary relief.

However, if a patient requests a specific drug, but the IDG determines that a formula drug would work equally well, the hospice need not pay for the requested drug.

If a medication is requested but hospice determines that it is not reasonable and necessary:◦ Hospice does not provide the drug—No Advance

Beneficiary Notice of Non-coverage (“ABN”)◦ Hospice provides the drug—must provide ABN

Beneficiary can appeal the decision by filing CMS 1490s

Drugs used for the treatment of the terminal illness or related conditions prior to election:

REMEMBER: Plan of Care (“POC”) includes all drugs necessary for the palliation and management of the terminal illness and related conditions—even if the drug was used prior to election.

Is the drug reasonable and necessary for treatment and palliation of the

terminal illness or related condition (i.e. is it effective

as part of the POC)?

Yes.

Hospice must

provide as part of Part A Benefit

No.If patient

continues to use patient

is liable

“Part D Sponsor should place beneficiary-level PA requirements on all drugs for hospice beneficiaries to determine whether drugs are coverable under Part D.” CMS March 10, 2014 Clarification Letter

Hospice initiates communication with Sponsor prior to claim submission (best practice: at time of election).◦ Notifies sponsor of hospice election.◦ Identifies any drugs covered by Part D and provides

explanation of why the drugs are unrelated to terminal illness. Sponsor accepts hospice’s explanation as satisfactory to

satisfy PA requirements. Hospice can identify a patient’s Part D plan by

requesting their pharmacy do an electronic eligibility query to CMS.

May initiate communication through sponsors 24 hour pharmacy help desk.

If hospice provider or prescriber does not respond: Part D can’t rule out that the claim is covered by Part A Hospice benefit, therefore, Sponsor will deny the claim.

No specific PA form in 2014 (see list of information)

Respond as quickly as possible for coverage determinations

Coverage determination time frames:◦ Expedited request: 24-hours after explanation provided◦ Standard request: 72-hours after explanation provided

Payment is arranged between Part D Sponsor, hospice, and beneficiary.

Timely Filed NOE can help avoid issues

Sponsor retroactively reviews medications

provided during election period after

receiving NOE

Drug related to terminal condition—Hospice is liable

Drug unrelated to terminal condition—Hospice or prescriber provides PA

information. Part D pays

CMS recognizes disputes will arise: They propose to establish an independent review board to make a final determination on whether a drug is related or unrelated.

2014 process: ◦ Hospice and Part D must coordinate their benefits◦ Hospice/Prescriber should immediately provide PA

documentation◦ Part D Sponsor should accept and maintain

documentation that a drug is unrelated◦ Part D Sponsor can flag a claim for retrospective review

once the independent review process is in place◦ Part D Sponsor and Hospice should negotiate

retrospective recovery if sponsor paid for drugs after effective date of the election, but prior to notification from CMS

Review Documentation related to terminal illness: The clarification letters require hospice providers to more thoroughly consider and better document whether conditions and prescribed medications are unrelated to underlying terminal illnesses. 

File NOEs ASAP: Thereby notifying Part D sponsors of Hospice election and avoiding retrospective recoveries.

Refine communication methods with Part D Sponsors. Who will initiate communication and at what point?

As soon as you know a patient has an unrelated medication need—initiate a conversation with Part D Sponsor.

Adopt new consent language to reflect change in approach to beneficiary liability.

Discuss the role of your medical director in helping determine whether conditions are related.

Must document any verbal Prior Authorizations