Home Health & Hospice Week

Wait for written guidance, legal expert cautions.

CMS has taken some of the pressure off hospices implementing the new election statement addendum requirement that hits Oct. 1 — at least unofficially.

In the 2020 and 2021 final rules implementing the requirement and other documents, the Centers for Medicare & Medicaid Services specified that the addendum is a “condition for payment.” But CMS hasn’t spelled out what the financial penalty will be for failing to comply, either in part or whole.

Worst case scenario: Industry experts have worried that if hospices make a minor mistake such as missing the five- or three-day deadline by a day or leaving one item off the addendum, CMS would disallow payment for the patient’s entire stay (see HCW by AAPC, Vol. XXIX, No. 33).

Now Medicare officials are giving hospices some reas­surance on the issue. CMS has told the National Association for Home Care & Hospice that “the only financial penalty that should be imposed for the new condition of payment is when an addendum has been requested and there is not evidence in the medical record of the addendum being provided to the beneficiary/legal representative,” the trade group reports. “CMS told NAHC that it will not be looking to determine if the addendum was provided within the required number of days or if all content requirements are met,” NAHC says in its member newsletter.

This clarification should ease hospices’ minds as they bring the addendum process online in the coming weeks.

But, problems and questions remain.

For example: CMS still hasn’t specified exactly how large the penalty will be if the hospice fails to furnish an addendum when requested, NAHC’s Theresa Forster points out.

That’s “the main outstanding question hospices have,” NAHC’s Katie Wehri agrees. “What, exactly, is the penalty when an addendum is requested but is not provided?”

Attorney Brian Daucher with Sheppard Mullin in Costa Mesa, California, hopes CMS will clarify situations where an addendum is requested and not issued, but the patient doesn’t have any services or items that the hospice didn’t cover. “In my view, the only time the absence of a requested addendum should come into play [financially] is when there are in fact services that the hospices refuse to cover as unrelated,” Daucher contends. But “the words ‘condition of payment’ are meant to set up the ability of CMS to recover all fees for service,” he adds.

Failing to issue addendums when required should trigger a survey citation and corrective action plan, Daucher allows. But “in a typical breach of contract situation, the aggrieved party can only recover damages ‘proximately caused’ by the breach,” he argues. “If there are no damages (no uncovered services), or if the damages are unrelated to the breach (i.e., because the patient without hospice knowledge obtained additional services from a non hospice context), then the breaching party should not be subject to a forfeiture (i.e., giving up all fees for service),” Daucher tells AAPC.

“It is pure government overreach to try to recover payment for services on the basis of technicalities which do not actually cause either the patient or CMS actual harm of some kind,” Daucher insists. “Basic fairness dictates that the punishment match the crime, and not be excessive.”