New edit targets improper payments for hospice services
CMS recently created a new system edit to help reduce improper Medicare payments for outpatient services provided by acute care hospitals to hospice patients. The edit will automatically compare primary diagnosis codes on the outpatient and hospice claims through an exact diagnosis match, according to the agency.
CMS created this edit in response to a recent Office of Inspector General (OIG) audit of Part B claims. The OIG determined that Medicare improperly paid over $190 million between 2017 and 2021 to acute care hospitals for outpatient services provided to hospice enrollees. CMS covers these services under hospice per-diem payments, and hospices should provide them either directly or under an arrangement with an acute care hospital.
The audit highlighted widespread billing errors with condition code 07, which is used to report that a service is not related to a hospice enrollee’s terminal illness and related conditions. The new edit will deny both hospital inpatient and outpatient claims when there is a hospice claim for the same beneficiary within the same covered period with condition code 07 or modifier -GW with the same primary diagnosis, according to CMS.
The edit will take effect on April 1, 2026. Revenue integrity professionals can view One-Time Notification Transmittal 13446 for more information.