New Hospice Regulations are a Mixed Bag for Beneficiaries Seeking High Quality End of Life Care

Hospice care is available for Medicare beneficiaries who are certified by a hospice physician as having a life expectancy of six months or less if the terminal illness runs its normal course. In 1983, the hospice benefit was designed to cover approximately 210 days of care. There were four benefit periods: two 90 day periods, one 30 day period, and one unlimited period. The benefit periods had to be used sequentially. And, once an individual entered the “unlimited period,” if he did not die, but continued to live and was discharged from or revoked his hospice election, he lost all future Medicare coverage of hospice care.

Fortunately, in 1998 the benefit period regulation was changed. Rather than only four potential periods with the risk of exhausting the benefit, the new regulation was crafted such that Medicare beneficiaries can never exhaust access to the benefit. This change remains in effect today. There are currently two 90 day benefit periods, followed by an unlimited number of 60 day periods. In other words, terminally ill Medicare beneficiaries can live more than 210 days, and not fear loss of coverage for their hospice care.[1]

Since this change, use of hospice care by Medicare beneficiaries has grown significantly. In the year 2007, Medicare spent three times more on hospice care than it did in the year 2000. In March 2009, MedPac issued a report to Congress summarizing earlier findings as follows: “Medicare’s hospice payment system contains incentives that make very long stays in hospice profitable for the provider, which may have led to inappropriate utilization of the benefit among some hospices.” To address this issue, MedPac concluded, “Greater physician engagement is needed in the process of certifying and recertifying patients’ eligibility for the Medicare hospice benefit.”[2]

Based on the MedPac Report, Section 1814(a)(7) of the Social Security Act was amended by §3132 of the Affordable Care Act to require a face-to-face encounter by a hospice physician or nurse practitioner with every hospice patient to determine the continued eligibility of that patient prior to the 180-day recertification, and prior to each subsequent recertification. Furthermore, the law requires that the hospice physician or nurse practitioner attest that such a visit took place.

To implement the new statutory requirement, the Centers for Medicare and Medicaid Services (CMS) made changes to 42 C.F.R. §418.22(a)(3), (a)(4), (b)(3), (b)(4), and (b)(5). The new rules were scheduled to become effective January 1, 2011.[3] However, on December 23, 2010, CMS issued a memorandum delaying full implementation until the second quarter of CY2011 due to:

…concerns that some providers may need additional time to establish operational protocols necessary to comply with face-to-face encounter requirements mandated by the Affordable Care Act (ACA)…

New Regulations May Improve Care Quality… Yet Limit Access

If implemented as currently written, the new regulations will potentially limit access to hospice care for terminally ill beneficiaries. Paradoxically, these same changes may potentially improve the quality of care for those who do access it.

1. Access to Real Time Benefit Period Information Not Always Available

The required face-to-face encounter must occur prior to the start of the beneficiary’s third hospice benefit period and all subsequent benefit periods. Frequently hospices receive referrals for patients who are in great distress in their homes. For instance a patient dying of chronic obstructive pulmonary disease may have untreated pain and anxiety and not have the necessary durable medical equipment to ensure her safety in her home. As Medicare beneficiaries have an unlimited amount of hospice benefit periods available to them, hospice providers will not necessarily, know at the time of referral, which hospice benefit period the potential patient will be in. Thus, prior to admitting such patients, the hospice provider will first have to determine whether the patient requires a face-to-face encounter.

CMS has directed providers to use the Common Working File. The Common Working File operates from 6:00 am to 6:00 pm, Monday through Friday. It operates on Saturdays from 6:00 am to noon. It does not operate on Sundays. Based on this system, if a terminally ill beneficiary has the misfortune of receiving a hospice referral on Saturday afternoon at 1:00, she may have to wait until Monday morning for her hospice admission. Obviously that is a long time to suffer pain and anxiety and to risk unnecessary falls due to lack of proper equipment. It is likely that beneficiaries such as the one described will end up in the hospital prior to their actual hospice admission. This will result in additional costs to Medicare and serious harm to Medicare beneficiaries.

To remedy this problem, prior to implementation of the new regulations, CMS must create a computer system containing real time data that is available to hospice providers 7 days a week and 24 hours per day.

2. Providers Will Not Receive Reimbursement for Face-to-Face Encounters

Providers are paid the same per diem for Medicare beneficiaries in their first two benefit periods as they are for beneficiaries in their third and subsequent periods. Once the new rule is implemented, however, providers will have the additional burden of providing face-to-face encounters with either hospice physicians or hospice nurse practitioners for beneficiaries in their third and subsequent benefit periods. This will result in additional cost to hospices, and it is a possibility that hospices may choose to avoid these costs by inappropriately discharging beneficiaries who reach their third benefit period, or by not admitting patients who are in their third benefit period or are likely to live into their third benefit period. Though this will control costs for Medicare, it will decrease access to hospice care for Medicare beneficiaries.

To prevent this unjust result, CMS should pay hospices for the mandated face-to-face visits. To do otherwise creates a two-tiered system in which providers are compensated better for beneficiaries under the 180-day recertification requirement than for beneficiaries who require the face-to-face visits.

3. Medicare Beneficiaries Who are Actively Dying May Not Be Admitted to Hospice Care

As a result of the new face-to-face encounter requirement, many hospice patients may be discharged from hospice care when they reach their third benefit period – appropriately or inappropriately. A few weeks later, it is likely that discharged beneficiaries, particularly those with chronic illnesses such as congestive heart failure or chronic obstructive pulmonary disease, will end up at the emergency room on a Friday night while they are actively dying and very much in need of hospice care. However, prior to an admission to hospice care during the third or subsequent benefit periods, a face-to-face encounter must occur. Given that a hospice physician or hospice nurse practitioner may not be available to make the face-to-face encounter, the beneficiary may die, either in the emergency room or the hospital, prior to the time she is admitted to hospice. Given the cost of hospital care relative to hospice care, this is an expensive consequence for Medicare. And it is a poor result for Medicare beneficiaries, as studies consistently show that beneficiaries have better deaths with hospice care than without.

CMS must address this serious problem. The new regulation should be amended to waive the “face to face” requirement for beneficiaries who require the face-to-face encounter, but die within one week of a new hospice admission/election.

4. Possible Improvement to Quality of Care

Despite the difficulties outlined above, more physician involvement is a good idea for all hospice patients. Hopefully the new regulations will engender such engagement and thus promote higher quality of care for those hospice patients who will require a face-to-face visit. Further, the regulations require that for the third and subsequent benefit periods, the physician compose a narrative that includes an explanation as to how the clinical findings gathered during the face-to-face encounter support a life-expectancy of six months or less. Such analytic thinking and documentation should decrease inappropriate discharges and create a strong record for successful appeals when hospice services are inappropriately denied coverage.


Since CMS has already delayed implementation of the new regulations due to provider concerns, they should also take this opportunity to address the issues discussed above. Since ensuring expert care for dying Medicare beneficiaries is a paramount concern, prior to implementation of the new regulations, CMS should remove these unnecessary barriers to hospice care.

[1] 42 C.F.R. § 418.21
[2] Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy (March 2009)
[3] 75 Fed.Reg. 70,372 (November 17, 2010)