Hospice Medicare Benefit—How It Works & What It Covers

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If you have Medicare, the Hospice Medicare Benefit pays for hospice care when you're terminally ill. Image © Brad Wilson/The Image Bank/Getty Images

The Hospice Medicare Benefit is a special part of Medicare that pays for hospice care. If you or a loved one have Medicare and are considering enrolling in hospice care, here's what you need to know about hospice and the Hospice Medicare Benefit.

Not everyone can get hospice; you must qualify for it. To be eligible for hospice, you must have a life expectancy of less than six months. Additionally, you must agree to forgo further curative treatment options for your terminal illness, instead choosing treatment options aimed at keeping you comfortable and maintaining as good a quality of life as possible.

If you have Medicare and choose a Medicare-certified hospice organization to provide your hospice care, the costs will be paid by the Hospice Medicare Benefit.

What the Hospice Medicare Benefit Covers

The Hospice Medicare Benefit covers all of the care related to your terminal illness and necessary to keep you comfortable. It pays for:

  • Hospice physicians and nurses.
  • Medications necessary to keep you comfortable and control or prevent your symptoms.
  • Hospice home health aides to help with bathing and bed changes.
  • Medical equipment like a wheelchair or hospital bed necessary to keep you comfortable.
  • Social workers to help you get your affairs in order and to help you and your family with deal with emotional difficulties and grief.
  • Respite care needed to give your caregiver an break.
  • Speech, occupational, or physical therapy needed to keep you comfortable or teach you how to cope with the changes your body is undergoing.
  • Dietician services if necessary.
  • Grief counseling for both you and your loved ones.
  • Inpatient admission if necessary for crisis management, approved by the hospice team, and received at a hospital or hospice facility contracted with your hospice organization.
  • Anything else the hospice team feels is necessary and related to keeping you comfortable and limiting the symptoms of your terminal illness.

    What the Hospice Medicare Benefit Doesn't Cover

    The Hospice Medicare Benefit doesn’t cover anything aimed at curing your terminal illness. For example, it might cover the cost of radiation therapy aimed at shrinking a tumor that is pressing against your spinal cord causing pain. But, it wouldn’t cover radiation therapy aimed at curing your disease. The key is whether the treatment is to control your symptoms so you can be comfortable (covered), or whether the treatment is an attempt to cure your terminal illness (not covered).

    It doesn’t cover the cost of room and board. This isn’t usually a problem if you’re in your own home. But, if you are in a nursing home, assisted living facility, board and care home, or living at a hospice facility, you’ll be responsible for covering your board and care costs. If it’s clear that you need to live in a nursing home, assisted living, or hospice house but can’t afford room and board, some hospice organizations will use charitable donations to assist you with those costs.

    This is usually done on a case-by-case basis, so if you predict this may be an issue, ask about it as you’re choosing which hospice organization to use.

    Emergency room and ambulance services aren’t covered by the Hospice Medicare Benefit unless your hospice team feels they’re necessary, related to your terminal illness, and arranges for you to use receive those services.

    What You'll Have to Pay

    You will have a small copay of $5 for medications, although some hospice organizations waive this copay. You will have a 5% coinsurance for the cost of any respite care, but not more than $12 per day. You will pay the Medicare Part B deductible and coinsurance for any physician services you receive from a doctor that isn’t working for your hospice organization. You'll need to continue paying any Medicare premiums you were paying before you signed up for hospice. For example, if you were paying a Medicare Part B premium, or a premium for a Medigap policy, you'll need to continue paying those premiums.

    How To Get the Hospice Medicare Benefit

    Only Medicare recipients can get the Hospice Medicare Benefit. When you choose to enroll in a hospice program, part of the process of enrolling in hospice will be switching from your current Medicare plan to the Hospice Medicare Benefit. The hospice personnel who assist you with enrolling in the hospice program will also assist you with enrolling in the Hospice Medicare Benefit.

    How the Hospice Medicare Benefit Works

    The Hospice Medicare Benefit is part of Medicare Part A. When you sign up for hospice, whether you’re on Original Medicare or a Medicare Advantage Plan like a Medicare HMO, you’ll automatically be switched to Original Medicare. Original Medicare Part A will then pay the hospice organization a set dollar amount for every day you’re their patient. This set dollar-per-day rate is known as a per-diem rate.

    The hospice organization pays for all of your necessary hospice care out of its per-diem rate. It gets this money every day whether or not the hospice nurse or home health aide came to visit you that day.

    The hospice organization now acts a bit like an HMO in that you’re only allowed to get healthcare services related to your terminal illness from that hospice organization, or from another healthcare provider it contracts with. For example, if you need home oxygen and a hospital bed, you can’t get them from any medical equipment provider you choose. Instead, you must get them from the medical equipment provider your hospice organization contracts with, and your hospice must agree that you need these items.

    You may still get healthcare services that aren’t related to your terminal illness from non-hospice providers. For example, if your terminal illness is cancer, you may continue to see your cardiologist for treatment of your heart arrhythmia since it has nothing to do with your terminal illness. Hospice won’t pay for the cardiologist out of its per-diem since that doctor’s visit wasn’t related to your terminal illness. However, Original Medicare Part B will pay for the cardiologist visit as it has in the past.

    In another example, if your terminal illness is pulmonary hypertension and you need to be hospitalized because you tripped and broke your hip, Original Medicare Part A would pay for your hip-related hospitalization, and Original Medicare Part B would pay for the doctor bills associated with your hip. In this way, hospice and Medicare work together to cover the costs of your terminal illness (with the Hospice Medicare Benefit) as well as healthcare costs unrelated to your terminal illness (with Medicare Parts A and B.)

    What Happens if You Change Your Mind About Hospice After Starting on the Hospice Medicare Benefit

    If you change your mind about hospice after you’ve signed up, you may revoke the Hospice Medicare Benefit and go back to Original Medicare.

    If you want to continue to receive hospice services, but change your mind about the hospice organization you’ve chosen, you may switch to a different hospice organization. However, you can’t switch hospice organizations any time you wish. You may switch one time during the first 90 days of your care, one time during the second 90 days of your care, and once every 60 days thereafter. Hopefully, you’ll choose a hospice organization you’ll be happy with and not need to change.

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