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.

Medicare set up four broad exceptions to this payment forfeiture rule. Exceptions include natural disasters, a data filing problem, delay in notification of certification or user ID access, or other circumstances beyond the control of the hospice.

Unfortunately, application of these exceptions is left to contractors who have already begun to exhibit a limited willingness to apply these exceptions.

For example, compliance with the NOE policy depends upon reliable access to Medicare’s Direct Date Entry (DDE) system. But as hospices know, DDE access is not reliable, often subject to disruption, including challenges related to system updates, login status, linking existing logins to newly-acquired providers, delay in processing change of ownership, non-use lapse of secondary DDE logins, etc.

Because of these risks, hospices should minimize the NOE / DDE risk by:

• Maintaining at least two active DDE logins at all times. To prevent lapse, for some reason, each login must be used at least every 30 days. If a DDE login lapses, it may be reactivated, but again timing of reactivation depends upon the whim of the contractor and can take months. A second reliable DDE login is a crucial insurance policy; use this login in every billing cycle.

• Carefully manage hospice acquisitions. In an acquisition, hospices necessarily transition DDE access from one entity to another. But, access for the acquiring hospice will not be made available until the CHOW is processed and accepted. This can take a long time, even implicating the one year claim filing rule in some cases. During such time, NOEs cannot be submitted and hospices are at risk of deferred or lost reimbursement. To manage this, hospices should ensure continuous DDE access, for instance by contracting with the seller to ensure ongoing use of the existing DDE login.

• If access is not available, hospices should try to take steps to deliver paper copies of NOEs to contractors, even contractors that say that they will not accept them. Such delivery makes a record of efforts to comply that may be helpful at later stages of the appeal process, where ALJs (trained lawyers who understand forfeiture issues) will reverse the contractor and require payment.

Policies like the NOE filing requirement, coupled with the byzantine and (unlawfully) delayed appeals process, afford CMS and its contractors substantial opportunity to abuse providers.

Providers need to be vigilant in this area to protect their service payments.