New Target Area for Hospice PEPPER

Posted on Monday, November 9, 2020

The 2021 release of the Hospice Program for Evaluating Payment Patterns Electronic Report (PEPPER), anticipated spring 2021, will include at least one new target area – Average Number of Part D Claims per Hospice Episode.  This target area will measure the count of Medicare Part D claims for beneficiaries billed during hospice episodes in the report period  as a portion of the count of all beneficiary episodes discharged (by death or alive) by the hospice during the report period (obtained by considering all claims billed for a beneficiary by the hospice).

The report period will cover the federal fiscal years 2018, 2019 and 2020.

In August 2019, the Office of Inspector General (OIG) released a report titled Medicare Part D Is Still Paying Millions for Drugs Already Paid for Under the Part A Hospice Benefit, which detailed concerns and improper payments related to Medicare spending outside of the hospice benefit. The OIG estimated that the Medicare Part D total cost was $160.8 million for drugs that should have been paid for by hospice organizations.  This is an area of long-standing concern of not only the OIG but also the Medicare Payment Advisory Commission (MedPAC) and the Centers for Medicare & Medicaid Services (CMS).

NAHC suggested to RELI Group, the CMS contractor for the PEPPER, that there be a target area related to Part D spending while a patient is enrolled in hospice.  This will provide hospices with data about the types of services their patients are receiving outside of the hospice benefit.  Hospices are frequently not aware that a patient is obtaining drugs under the Part D benefit, perhaps drugs that the hospice identified as not reasonable and necessary.  In these situations, the beneficiary may be financially liable for the drug as Medicare does not cover any item, service or drug that is not considered reasonable and necessary.  If the drug is determined by the hospice to be unrelated to the terminal illness and related conditions, the drug may be covered under Part D.

It is important for hospices to coordinate with Part D plans and non-hospice providers delivering care or items to hospice beneficiaries.  However, hospices must be aware of these other providers.  This information is usually not available to the hospice through CMS data systems and, sometimes, patients/families do not make hospice aware they are seeking services outside of the hospice’s care.  It is in these cases that items, services and drugs may be incorrectly billed to Medicare.

The additional information slated for next year’s PEPPER is useful to hospices to learn about not just how drugs are being billed for their patients but also how this data compares to other hospices at the state, national and Medicare Administrative Contractor (MAC) jurisdiction.

NAHC Report


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