Limitation on Liability for Certain Hospice Coverage Denials

50 - Limitation on Liability for Certain Hospice Coverage Denials (Rev. 188, Issued: 05-01-14; Effective: 08-04-14; Implementation: 08-04-14) Section 1879 of the Act provides beneficiaries with liability protections from unexpected charges for certain denied claims when items or services are furnished by Medicare Part A hospice providers. Hospice providers may also be protected from liability under §1879 of the Act when certain conditions apply to a claim denial. The limitation on liability protections applies when a hospice claim denial is expected because: • the beneficiary is determined to be not “terminally ill” as defined in §1879(g)(2) of the Act; • specific items or services billed separately from the hospice per diem, such as physician services, are not reasonable and necessary as defined in either §1862(a)(1)(A) or §1862(a)(1)(C); or • the level of hospice care is determined to be not reasonable or medically necessary as defined in §1862(a)(1)(A) or §1862(a)(1)(C), specifically for the management of the terminal illness and/or related conditions. A/B MACs (HHH) will apply the usual procedures of the limitation on liability provision when a claim denial is based upon one of these reasons. When limitation on liability protections applies, the hospice provider must issue the Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131, per CMS guidelines in order to transfer liability to the beneficiary. See Pub. 100-04, Medicare Claims Processing Manual, Chapter 30, “Financial Liability Protections," particularly Section 50, “Advance Beneficiary Notice of Noncoverage.”