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Medicare & the Cost of Hospice

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Does Medicare cover hospice?

Hospice is covered by Medicare, Medicaid/Medi-Cal and most private insurance

Congress established the Medicare hospice benefit in 1982 to provide patients with life-limiting illnesses compassionate, coordinated care to manage the symptoms and consequences of their disease. Medicare's hospice benefit was designed to help terminally ill patients with the often significant expenses incurred at the end of life, including prescription and over-the-counter drugs, medical equipment and supplies, hospital copayments and grief support for the family.

While the benefit offered a lifeline to terminally ill patients covered by Medicare (later extended to Medicaid/Medi-Cal and to most private insurance plans), it enacted a number of requirements that providers must meet in order to be certified as hospices by Medicare and qualify for payment from Medicare. These include the mandate to provide or manage all services needed to manage the terminal illness.

Read more: Who Pays for Hospice?

Other features of the Medicare hospice benefit include a limit on the proportion of days of care a hospice can provide in an inpatient setting rather than the patient’s home; a global cap on total average payment per patient; and a requirement that dedicated and trained volunteers must contribute at least 5 percent of the hospice provider’s services.

Medicare Hospice Criteria 

To qualify for Medicare hospice coverage, a patient must:

  • Be eligible for Medicare Part A
  • Consent to hospice care and agree that he/she wishes to receive “palliative, not curative care”
  • Be certified by his/her physician and the hospice medical director as having a “medical prognosis that his/her life expectancy is six months or less if the illness runs its normal course”
  • Continue to have a six-months-or-less prognosis, although some individual patients may receive hospice services for longer than six months as long as they continue to have a limited life expectancy throughout that time

VITAS hospice patients who meet those qualifications will have their hospice care covered by Medicare. For care unrelated to a patient’s terminal illness, Medicare and Medicaid continue to provide their usual benefits. Since each private insurance company has its own policies regarding hospice coverage, VITAS can contact the patient’s insurer to ask about coverage provided. However, VITAS is committed to admitting and caring for all hospice-appropriate patients who are referred to us, regardless of their insurance coverage or ability to pay.

How Much Does Hospice Cost?

Hospices are paid a daily per-diem rate for their services in one of four levels of care:

  1. Routine home care
  2. Continuous care (Intensive Comfort Care®)
  3. Inpatient care
  4. Respite care

Out of this basic per-diem rate, the hospice is responsible for the following:

  • All prescription drugs
  • Over-the-counter medications
  • Medical equipment and supplies
  • Labs and other tests related to comfort and management of the terminal illness, as designated by the hospice team.

In addition, patients receive regular visits from nurses, hospice aides, chaplains, social workers, rehabilitation therapists,  counselors, volunteers and physician services, as needed. Organized bereavement services are provided to surviving loved ones for at least one year after the patient’s death, again at no cost to the patient's family.