Hospice, News, Payment/economy

Hospice, hospital readmissions and penalty implications

Editorial note: This blog post has been republished from Reg’s Blog: Senior and Post-Acute Healthcare News and Topics, with permission from the author.

Late yesterday, a reader posed this question to me: “When hospitals discharge to hospice and if the hospice has to readmit to the hospital, the hospital doesn’t get penalized for the readmit…Is this true?”  Since this question is not one that I have been asked before, my guess is that others may have a similar query.  My answer is as follows:

The short answer is that the readmission penalty issue is not applicable for a hospice to acute hospital transfer/admission, assuming one single caveat is present: The patient in question must be on the Medicare Hospice benefit, rather than be covered by traditional Medicare Part A and receiving services under some other Hospice offered program such as a Palliative Care program (a home health care style offering). Below is the regulatory reason why the readmission penalty is not applicable.

  • When a patient elects and is qualified under the Medicare Hospice benefit, the patient opts (effectively) out of his/her traditional Medicare benefit structure – including the assumed coverage for inpatient hospital coverage offered under Medicare Part A.
  • The issue or applicability for readmission penalties for hospitals is only under traditional Medicare fee-for-service or qualified Medicare Advantage plans. It is also only applicable to certain originating DRGs (not all readmissions qualify for a penalty).
  • When a patient enrolls in the Medicare Hospice benefit, the assumptive relationship under Medicare with regard to the patient and his/her provider relationship changes. The assumption becomes that the patient is effectively now the “property” of the Hospice. This is so much so that no patient can receive the Hospice benefit under Medicare without becoming a patient of a qualified, certified Hospice provider. Unlike the relationship under traditional or managed Medicare, the patient care is thus the property and coordinated responsibility of the Hospice.  Prior to enrollment, the patient had no connective relationship to any provider – free (for the most part) to seek care from any qualified provider (Med Advantage networks notwithstanding).
  • By his/her enrollment in the Hospice benefit with a Hospice, the patient agrees to a set of covered benefits tied to his/her end-of-life care needs. He/she also elects to have his/her care effectively provided exclusively by or through the Hospice.  In fact, the patient can’t really show up at a hospital for an admission and expect to be admitted without the approval of the Hospice. The only option a patient has to receive care in this fashion is to “opt out” of the Hospice benefit.
  • Once a patient is enrolled in Hospice, there is effectively no “hospital” benefit left. The use of a hospital by a Hospice patient is exclusively through the Hospice and any hospital or inpatient use is only technically via a GIP or other contracted event/need.  In fact, the hospital has no DRG or admission code nor does the hospital record the GIP stay as a “hospital” admission. The hospital can’t create a bill to Medicare for this event and must seek all payment through the Hospice.  As no bill is generated to Medicare Part A with a corresponding DRG and billing code, no inpatient admission occurred and thus, no readmission occurs either applicable (or not) for a penalty.

Like most things Medicare, you won’t find a succinct “memo” to this effect.  Instead, you have to know and go through the details on the program benefit side and understand how billing, coding and benefit eligibility/program payments work for each provider segment.