On March 10, 2014 CMS published its highly anticipated final guidance on Part D entitled Part D Payment for Drugs for Beneficiaries Enrolled in Hospice - Final 2014 Guidance (Guidance). Hospice providers were hoping this promised document would help resolve some of the more challenging components of the Part D vs hospice struggle. Did it? You decide...
This whole Part D/hospice situation has become so convoluted, I needed to reread CMS' December 6, 2013 memo - Part D Payment for Drugs for Beneficiaries Enrolled in Hospice - Request for Comments - and NHPCO's 22 page well-crafted comment letter (available here) in order to figure out if the latest Guidance is good, bad and/or ugly. I decided to not be dramatic and to just go with the good and the bad and forget the ugly.
What it is all about
Before describing the good and the bad, let's first review what the Part D issue is all about. The bottom line has to do with payment responsibility: when a Medicare beneficiary has Medicare Part D and then elects hospice, who pays for the drugs he or she receives? Since drugs related to a patient's terminal illness or related conditions are covered under the Medicare Hospice Benefit per diem, CMS does not want to pay twice (i.e. under Part D as well). Payment responsibility belongs to the hospice, Medicare Part D, or the beneficiary. This is how it is supposed to work when a Medicare beneficiary with Part D coverage elects hospice:
- The hospice pays when the drug is related to the palliation and management of the patient's terminal illness or related conditions, as identified in the patient's plan of care;
- Medicare Part D pays when the drug is for the treatment of a condition that is completely unrelated to the patient's terminal illness or related conditions; and
- The beneficiary pays when he/she wants the drug but 1) it is not considered reasonable or necessary by the hospice to palliate or manage the patient's symptoms; and/or 2) the patient wants a specific drug instead of its equivalent that is on the hospice's formulary.
The delineation of payment responsibility is straightforward but the entire process of ensuring payment is made correctly has been and continues to be quite messy.
How it became such a mess
The history of this Part D vs hospice situation is relatively recent so it does not take too long to describe. Beginning in 2007 (and every year thereafter until 2012), the Office of the Inspector General (OIG) included concerns regarding duplicate payment for drugs for hospice beneficiaries in the Part D section of its annual Work Plan. Nothing really heated up until CMS sent a memo to Part D plan sponsors in October 2010 alerting them to the fact that they might be paying for drugs that were the responsibility of hospice providers. Then all was relatively quiet until the OIG released its seminal report in June 2012 entitled Medicare Could Be Paying Twice For Prescription Drugs for Beneficiaries in Hospice. The goal of the report was to implement what it had been proposing in the Work Plans and determine whether Medicare Part D paid for prescription drugs that likely should have been covered by hospice providers.
The findings of the OIG report were substantive enough to indicate that inappropriate Part D payments for drugs for hospice patients were potentially being made on a national level and that the issue warranted CMS' attention. Indeed it got CMS' attention and that is when things became such a mess. For some unknown reason, in an August 2013 memo to Part D plan sponsors, CMS dug back to 1983 and came up with something in the preamble (not the statute or the regulatory text) to the original final rule for the very first hospice regulations that stated:
"...hospices are required to cover virtually all the palliative care needed by terminally ill patients (48 FR 56010)." [emphasis added]
By predicating their guidance to Part D plan sponsors on this notion of "virtually all," CMS essentially ignored the changed nature of hospice patients, medical advances, physician and IDG input into developing a patient's plan of care, and the complexity and nuance associated with determining what is and is not related to an individual's terminal illness and related conditions. This was then exacerbated by CMS' directive to Part D plan sponsors to recoup payment going back through 2011 for any analgesics that were covered under Part D to hospice patients. In its October 30, 2013 memo to Part D sponsors regarding prescription analgesics, CMS stated they "presume that all drugs were used for the palliation and management of the terminal illness and/or related conditions. They are, therefore, considered to be related to hospice care and thus a case-by-case analysis to determine relatedness is not required."
So all of this has been happening in the very recent past - within the past year. Finally CMS began communicating directly with hospices (and not just Part D sponsors) but by then (November 2013) much damage had been done in terms of significant confusion across the land regarding how to sort this all out. The Guidance that was issued last December continued the confusion and that brings us right to the present with the March 10, 2014 Final Guidance.
So let's look at the good and the bad with regard to this latest addition to the issue.
Posted by Heather P Wilson, PhD, CEO, Weatherbee Resources, Inc