The Hospice Clinician Blog

After a recently completed investigation, the Office of the Inspector General (OIG) has issued a report entitled “Medicare Could Be Paying Twice for Prescription Drugs for Beneficiaries in Hospice.” This report draws attention to the fact that hospices may not be paying appropriately for their patients’ medications.

Hospice care is a Medicare Part A benefit. To be eligible for Medicare hospice care, a beneficiary must be entitled to Part A of Medicare and be certified as terminally ill (i.e., having a life expectancy of 6 months or less). The Medicare hospice benefit includes a per diem payment made by the Centers for Medicare & Medicaid Services (CMS) to a hospice organization for each day that a beneficiary is in hospice care, regardless of the number of services furnished. Drugs used primarily for symptom control and the relief of pain related to the individual’s terminal illness are covered under the hospice benefit, and the cost of providing these drugs is included in the per diem rate. As a result, hospice organizations should pay the dispensing pharmacies for these drugs.

Medications NOT related to the patient’s terminal diagnosis or to general end-of-life symptom management are paid for by the patient’s Medicare Part D benefit, another private insurance plan, or out-of-pocket by the patient themselves. But what the OIG has found is that Medicare Part D has been paying for medications that should have been paid for by the hospice, out of the per diem provided by CMS. In other words, the Medicare program paid twice for these medications. In addition, patients may have paid a copay that they shouldn’t have had to pay.

During calendar year 2009, the OIG identified 198,543 hospice beneficiaries who received 677,022 prescription drugs through the Medicare Part D program that potentially should have been covered under the per diem payments made to hospice organizations. These drugs were prescription analgesic, anti-nausea, laxative, and anti-anxiety drugs, as well as prescription drugs used to treat COPD and ALS. Medicare Part D paid pharmacies over $33 million for these prescription drugs, and beneficiaries paid nearly $4 million in copayments.

In response to these findings, the OIG has made a number of recommendations to CMS. The OIG recommends that CMS:

• educate hospices, pharmacies and Medicare Part D sponsors that Medicare Part D should NOT pay for drugs related to a hospice patient’s terminal illness

• perform oversight to ensure that Part D is not paying for drugs that Medicare has already covered under the per diem payments made to hospice organizations

• require Medicare Part D sponsors to develop controls that prevent Part D from paying for drugs that are already covered under the per diem payments.

What might this report mean for your hospice? The government has already been cracking down on hospices due to increasing reports of Medicare fraud, and with this new alert issued by the OIG, it is likely that these investigations will continue, if not increase in frequency. It is extremely important that hospices make the correct determination regarding which of a patient’s medications to cover, and that they document the rationale behind each coverage decision made. Once coverage decisions have been made, the hospice should have procedures in place to assure that billing is happening properly, so that medications are not inadvertently being paid for twice.

The decision of whether to pay for a particular medication is often a complicated one. We have guidelines that may help. In the last two editions of the Outcome Resources drug information newsletter, The Clinician, we have reviewed, in a two-part series, our Guidelines for Covered Medications in Hospice Patients. These guidelines may help your hospice ensure that you are making the proper decisions regarding medication coverage for each of your hospice patients. If you don’t have a copy of the newsletter, please contact us to request one.

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