Hospice Notice of Election / Direct Data Entry Perils

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In October 2014, Medicare adopted new policy (not a statute, not a regulation) requiring hospices to submit any notice of election within five days of admission. Medicare backed this policy (lacking any force of law) with substantial apparent teeth:

“In instances where a NOE is not timely-filed, Medicare shall not cover and pay for the days of hospice care from the hospice admission date to the date the NOE is submitted to, and accepted by, the Medicare contractor.” Change Request 9114 (May 8, 2015).

Arguably, Medicare lacks the authority to enforce a forfeiture of payment on these grounds. Policy is not statute passed by elected representatives, nor even regulation adopted after public notice and comment period.  Courts have held that these policies are not enforceable as law.

The purpose of the NOE policy is to ensure prompt identification of the point in time when a beneficiary elects hospice and therefore waives other Medicare services. While Medicare has an interest in preventing payment of non-covered claims to such beneficiaries, this policy may generate windfalls for CMS by causing hospices to forfeit significant revenue when NOEs cannot be timely submitted.

Although courts will reliably overrule any forfeiture not mandated by law, there is real risk here because Medicare and its contractors are substantially insulated by cumbersome and delayed appeals processes from effective review of forfeiture findings. Such forfeitures may be small (a few days of care), may go uncontested, or, if contested, may take years to reverse.

Read more here.