Increasingly, the last days of a person’s life are being spent in a hospital or other medical setting. Hospice is medical care specifically oriented around easing a patient’s end of life transition. As rural communities grow older, the demand for these services will only increase in many cases making this a viable and necessary service line.


To qualify under CMS’s definition of Hospice Care, services must be provided by a hospice employed provider for a patient with a prognosis of six months or less conditional on: (1) the care must be provided by an approved hospice program, and (2) the patient waives rights to Medicaid payments for services related to the terminal illness unless provided by the hospice.


Many states require accreditation to qualify for hospice licensure; for example, Texas requires accreditation from CHAP (some like states like Oklahoma only encourage accreditation).  Three organizations provide hospice accreditation dependent on facility location:

Qualified Services

CMS has an expansive list of services that can qualify as hospice care detailed below. There are two important exclusions to hospice billing: (1) CMS will not pay for services by other hospices except the one designated by the patient, and (2) CMS will not pay at hospice rates care billed from an emergency room, standard hospital in- or outpatient care. Billable hospice services include:

  • Nursing care
  • Medical equipment
  • Medical supplies
  • Drugs for pain and symptom management
  • Hospice aide and homemaker services
  • Physical therapy
  • Occupational therapy
  • Speech-language pathology services
  • Medical social services
  • Dietary counseling
  • Spiritual counseling
  • Grief and loss counseling for the patient and their family before and after death
  • Short-term inpatient care for pain control, symptom management, and respite care
  • Other Medicare hospice benefits considered reasonable and necessary specified in the patient’s plan of care (POC) and furnished or arranged by the hospice

Importantly, hospices are unable to bill for life-prolonging pharmacotherapy.

Determining Community Need

Understanding how new service lines fit into the needs of your community is critical to their long-term financial success as well as the impact they will have on your community. Beginning a service line that does not reflect community need can expose your practice to bad debt and lead to financial distress.

         Quantitative assessments of need

Certain states have Certification of Need laws that govern the opening of new practices within their territory: http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx. Even if your state does not require this assessment, utilizing the following two data sources, can help to identify your service area’s needs.

  1. Census data (inspect mortality rates)
  2. Hospital Data (comparing number of referrals with number of deaths)

Qualitative assessments of need

Working with leaders in the community helps in determining perceptions of need within your community. Balance community perceptions with existing financial capabilities; see: https://www.optimizingruralhealth.org/eight-steps-to-community-engagement-for-rural-hospitals/

  • Civic groups
  • Faith organizations
  • Community organizations
  • Civic questionnaires

A useful question to ask is “how many patients are being referred out for hospice care?” If your geographic region is devoid of hospices then that number might be relatively high.


Designing an Affordable Hospice Service Line

Two resources that are helpful when considering how to create hospice services are listed below. Moreover, mandated accreditation processes will help your practice best optimize services for your patients.
1. NAHC (National Association for Home Care & Hospice) Palliative Care White Paper:                  http://www.nahc.org/assets/1/7/FM15-102.pdf

  1. Advisory Board Information on Palliative Care: https://www.advisory.com/topics/performance-improvement/methodologies/palliative-care

         Outreach to Benefitting Populations

Many people may be in need of hospice services and will look to your hospice workforce to explain available services.  Populations who may benefit from these discussions are: patients in the hospital; patients discharged into hospice; patients at a high risk of mortality; and local medical staff.

By reaching out to these people, your hospice can ease concerns while explaining the availability of a vital service. Educating medical staff that might or might not be affiliated with your practice will increase the likelihood of referrals.


Considering which staff will work as part of your hospice services is an important consideration. Hospice services may be billed to any physician, nurse practitioner, or physician’s assistant (as of 2019). Legally, there are two important considerations when determining staffing:

  • The physician providing hospice care is not able to have provided the initial prognosis (they are able to reaffirm the prognosis as mandated by CMS).
  • Neither nurse practitioners nor physician assistants are able to provide a prognosis.

Hospices will often also provide social work and counselling services to both patients and the patient’s family; these services are eligible for CMS hospice billing if provided by a hospice employee.

Hospice Billing

A helpful guide for CMS hospice billing guidelines codes can be found at: https://www.cgsmedicare.com/hhh/education/materials/pdf/Hospice_Medicare_Billing_Codes_Sheet.pdf

A full list of CMS regulations can be accessed at https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/clm104c11.pdf

Contracting with a Critical Access Hospital

A hospice may contract with a CAH to provide the Medicare hospice hospital benefit. Reimbursement from Medicare is made to the hospice. The CAH may dedicate beds to the hospice, but the beds must be counted toward the 25-bed maximum. However, the hospice patient is not included in the calculation of the 96-hour annual average length of stay. The hospice patient can be admitted to the CAH for any care involved in their treatment plan or for respite care. The CAH negotiates reimbursement through an agreement with the hospice.


Hospice Resources & Educational Material

National Hospice and Palliative Care Organization https://www.nhpco.org/

Palliative Care Network of Wisconsin https://www.mypcnow.org/

Although created by Wisconsin, the site offers FastFacts resources useful for any state.


Center to Advance Palliative Care https://www.capc.org/

Tools and training for clinicians caring for people with serious illness. Get access to tools and technical assistance for new and established palliative care programs.


Advancing the Business of Healthcare (AAPC) https://www.aapc.com/blog/44501-hospice-billing-and-reimbursement-essentials/

This article, Hospice Billing and Reimbursement Essentials, and other hospice related articles can be found in the AAPC’s Knowledge Center.[/vc_column_text][/vc_column][/vc_row]