Home Health & Hospice Week

How confident are you in the new hospice visit charges you're putting on your Medicare claims? If you're like many hospices, not very.

The Centers for Medicare & Medicaid Services began requiring new claims data including visit charges from hospices July 1 (see Eli's HCW, Vol. XVII, No. 23, p. 181). A major sticking point in these requirements is how hospices must arrive at the per-visit charge amount.

Now CMS has offered guidance on reporting hospice charges, but providers may not be happy with the lack of specifics.

The question: "Can CMS provide further guidance as of how to report 'charges' on the hospice claim?" a hospice asks in a new Question & Answer on CMS' Web site.

The answer: Medicare's Claims Processing Manual and Provider Reimbursement Manual agree on only one basic rule -- "the CMS policy is for providers to bill Medicare on the same basis that they bill other payers."

Otherwise, CMS just offers that "charges should be related consistently to the cost of the services," according to the Q&A.

The Q&A probably doesn't provide "the specific direction for which many hospice agencies might be hoping," observes billing expert M. Aaron Little with BKD in Springfield, MO.

Many hospices are struggling to determine per-visit charges because they never actually bill anyone by the visit. Instead, Medicare and most other payors pay a daily rate. Visit numbers aren't even required on the CMS hospice cost report, Little points out.

Why it matters: In the short run, the per-visit charge doesn't impact a hospice's Medicare reimbursement directly. But in the long term, CMS and other policy-makers, such as the Medicare Payment Advisory Commission, are likely to use the charge data included on Medicare claims to figure things like hospice costs and profit margins, experts predict.

Per-visit charges are also important for hospices that actually do bill other payors per visit.

Little offers these tips for arriving at an accurate per visit charge for your billing:

1. Make sure your charges are the same for everyone. CMS says over and over in the new Q&A that hospices must charge Medicare patients and non-Medicare patients the same rate for services. "Whatever charge a hospice decides to adopt ... it needs to be the same as the charge it bills to those insurance companies that pay based on visits instead of a daily rate," Little advises.

2. Calculate your costs. If you have the resources, analyze your up-to-the-minute data to arrive at your true per-visit cost, Little counsels. But if you lack the means to do that, you can use your most recently filed Medicare cost report to arrive at a rough estimate.

"For a simplified approach, divide the total hospice nursing care costs computed on the Medi-care cost report by the number of visits provided during the cost reporting period to come up with an estimated average cost per visit," Little instructs.

The catch: Because the Medicare hospice cost report doesn't contain hospice visits, you might have to use visit estimates for the time period.

This calculation won't capture all the costs that may go into a nursing visit, Little tells Eli. But "it would provide an estimate as a starting point for further analysis."

3. Add in other costs. After determining the nursing costs, be sure to add in other expenses from the cost report like drugs and medical equipment, Little offers. And don't forget indirect costs.

4. Set charges higher than costs. Finally, add a customary mark-up to the per-visit cost you arrive at to determine the final charge amount that you'll put on your claim.

Know its limits: "This is somewhat of an oversimplified approach," Little acknowledges. But "it utilizes data that all Medicare certified hospice agencies have available."

Note: A link to the new Q&A is at www.cms.hhs.gov/center/hospice.asp under "Spotlights."