A new Medicare hospice manual update includes instructions for which principal diagnosis codes are acceptable, and clarifies which codes should be used for services in a skilled versus non-skilled nursing facility. Billing staffs should be aware of these changes, which go into effect Oct. 1, the Centers for Medicare & Medicaid Services stated in an educational memorandum sent Friday via email.

A hospice claim should list a principal diagnosis “most contributory” to the patient’s terminal prognosis, the Medicare Learning Network memo states. It identifies several ICD-9 and ICD-10 codes that are not acceptable, including codes for “adult failure to thrive.” A number of dementia-related codes are not acceptable, but some that are listed under “Diseases of the Nervous System” are allowed in certain situations, according to the new instructions.

There also are newly required time frames for submitting information to Medicare Administrative Contractors. When a beneficiary elects hospice coverage, a notice-of-election is to be sent to and accepted by a MAC within five business days. If a notice-of-election is not filed in a timely manner, the non-covered days are not to be billed to the beneficiary but will be a provider liability, the memo specifies. It also describes allowable exceptions to the five-day timeframe, such as if a natural disaster occurs.

The new update does not change the policy regarding site-of-service codes, but it does clarify when certain codes should be used. Q5003 is for hospice care in a long-term care or non-skilled nursing facility; Q5004 is for a skilled facility. There are four listed situations in which Q5004 should be used, including when a person is receiving inpatient respite care in a SNF.

Click here to access the complete MLN memo. Click here for the official instructions about these changes furnished to surveyors.