General

Published 08/04/2026

No. Non-affirmed PCR decisions are not appealable. Providers have two options when a PCR request is non-affirmed:

  • Resubmit the PCR request before submitting a claim
  • Submit the claim, receive the denial, and then file an appeal for the denied claim

If the provider submits the claim without first obtaining an affirmed PCR decision, the claim will be subject to a 25% payment reduction, and it may also be selected for an Additional Documentation Request (ADR).

Resource: Review Choice Demonstration FAQ (PDF).

Last Reviewed: 08/04/2026

Reason code U5136 indicates that a hospice facility submitted a Notice of Transfer (type of bill 8XC) with an admission date that is earlier than a previously submitted 8XC from the same provider.

To resolve this issue:

  • If the 8XC was submitted in error as a duplicate, no further action is required
  • If the 8XC was intended to correct a previously submitted notice, submit a new 8XC with the correct coding and information

Resource: Notice of Transfer (TOB 8XC) Billing Job Aid (PDF).

Last Reviewed: 08/04/2026

Hospices use occurrence code (OC) 27 and the date on all notices of election (NOEs) and initial claims following a hospice election. OC 27 and the date are also required on all subsequent claims when the claim's dates of service overlap the first day of the next benefit period.

Claims are assigned reason code U5181 if the occurrence code 27 is present and either of the following is true:

  • The beneficiary is not being certified for a third or continuing a hospice benefit
  • The occurrence code 27 date is incorrect and does not match the hospice benefit period start date

Ensure that the beneficiary is continuing a hospice election from the third benefit period or the occurrence code 27 date matches the hospice benefit period start date.

Resource: Reason Code U5181.

Last Reviewed: 08/04/2026

The NOA is a one-time submission to establish that the beneficiary is under a home health period of care and triggers home health consolidated billing edits. The NOA covers continuous 30-day periods of care until the individual is discharged from Medicare home health services.

Medicare does not allow facilities to adjust the notice of admission for home health. The MAC will allow the facility to cancel and rebill the notice of admission with a notice of cancellation (TOB 32D).

Resources

Last Reviewed: 08/04/2026

Diagnosis code F02.80, is included in an existing Medicare Code Editor edit, which does not allow these diagnoses to be coded as principal. This Medicare Code Editor edit will be implemented as a “Manifestation code as principal diagnosis” edit in the Integrated Outpatient Code Editor (IOCE). The Medicare Code Editor (MCE) and Integrated Outpatient Code Editor (I/OCE) is used to detect claim errors, including unacceptable principal diagnosis codes. The unacceptable principal diagnosis list is defined by the MCE and if an unacceptable principal diagnosis is reported as the principal diagnosis on a claim, the claim is returned to the provider.

Resource: CR 13882 (PDF).

Last Reviewed: 08/04/2026

All lines that were medically denied must be left in non-covered. These lines cannot be removed from the claim or moved to covered. An appeal must be submitted to adjust these lines. It is not sufficient to just enter comments, "Not adjusting medically denied lines." The lines must be submitted in non-covered exactly as they were on the original claim. If there is a HCPCS GZ modifier on any line on the original claim, it must be present with charges in non-covered on the new claim also.

Resource: Appeals and Clerical Error Reopenings Module.

Last Reviewed: 07/29/2026

When Medicare is notified of a settlement, judgment, award or other payment, including Ongoing Responsibility for Medicals, the recovery contractor will search the Medicare paid claims history. When related claims are identified, the recovery contractor issues a demand letter advising the debtor of the money owed to the Medicare program and how to resolve the debt by repayment. The demand letter also includes information on administrative appeal rights.

Assessment of Interest and Failure to Respond

  • Interest accrues from the date of the demand letter. The only way to avoid the interest assessment is to repay or otherwise resolve the demanded amount within the specified time frame.
  • Payments are applied to interest first and then to the principal
  • Interest is assessed on unpaid debts even if a debtor is pursuing an appeal or a beneficiary is requesting a waiver of recovery
  • If the waiver of recovery or appeal is granted, the debtor will receive a refund
  • Interest is due and payable for each full 30-day period the debt remains unresolved. If there is no response after 30 days, a second demand letter is sent out.
  • If there is no response to the second demand letter, a third demand letter will be sent with current interest calculations. The third demand letter will also include the intent to refer debt to the Department of Treasury's Debt Collection Center for cross servicing, and offset of Federal payments and certain eligible State payments information.
  • If there is no response on day 61, the matter will be referred the Department of Justice for legal action and/or the Department of the Treasury Debt Collection Center. The provider will also remain on payment withholding at the contractor level.
  • If the debt is discharged, it may be reported to the IRS as potential taxable income
  • During the collection process, interest will continue to accrue on the debt, and the provider will remain legally responsible for any amount not satisfied through the collection efforts

The Debt Collection Center will use various tools in debt collection, including:

  • Offset
  • Demand letters
  • Phone calls
  • Referral to a private collection agency or the Department of Justice for litigation
  • Federal salary offset
  • Administrative wage garnishment
  • Income tax return offset through the Internal Revenue Service (IRS)

Resources

Last Reviewed: 07/29/2026

You may stop recoupment at two points:

  • When a valid and timely request for a redetermination (i.e., within 30 days from the date of the overpayment letter) is received. Recoupment stops or is delayed, pending results of the appeal
  • When there is receipt of an unfavorable or partially favorable redetermination decision, and there is notification that the qualified independent contractor received a valid and timely request for reconsideration within 60 days of the redetermination

Note: Interest continues to accrue even when recoupment stops.

Resource: I Received a Demand Letter for an Overpayment.

Last Reviewed: 07/29/2026

The 5% calculation is based on your prior six-months' claim volume. When the new cycle begins, the number of claims that will be pulled has already been determined. It is common for providers to feel that they are receiving too many ADRs in the first few months of a new cycle, but the amount of ADRs typically decreases in the latter half of the cycle.

Last Reviewed: 07/29/2026

If you are buying a home health agency in a Review Choice Demonstration (RCD) state, there are a few things you need to know before, during and after the process is complete. Please review our website for detailed steps.

Resource: RCD Providers Going Through a Change of Ownership: Here Is What You Need to Know.

Last Reviewed: 07/29/2026

Beneficiary eligibility changes on the CWF record update FISS once the first claim is processed after the update in CWF occurs. Eligibility updates flow directly into the HIPAA Eligibility Transaction System (HETS), and those updates are then viewable in Palmetto GBA’s eServices portal which it receives from HETS. Once the DOD is corrected, hospices will need to adjust the claim, if necessary.

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Last Reviewed: 07/29/2026

Yes. In the CY 2024 Home Health Prospective Payment System Final Rule (CMS-1780-F), the Centers for Medicare & Medicaid Services (CMS) clarified that hospice administrators and medical directors must be reported as Managing Employees on the CMS-855A Medicare Enrollment Application.

Resource: Reporting Hospice Administrators and Medical Directors as Managing Employees on CMS-855A

No. You must list your medical director(s) or physician(s) in an administrative role. CMS recognizes an individual “who directly or indirectly manages, advises or supervises any element of the practices, finances, or operations of the facility” as a managing employee.

Last Reviewed: 07/29/2026

"For purposes of enrollment, such a person is considered a managing employee [which] is any individual, including a general manager, business manager, office manager or administrator, who exercises operational or managerial control over the provider's business, or who conducts the day-to-day operations of the business. A managing employee also includes any individual who is not an actual W-2 employee but who, either under contract or through some other arrangement, manages the day-to-day operations of the business."

Last Reviewed: 07/29/2026

The Palmetto GBA Medical Review staff will contact you within two weeks of receiving your TPE Final Results Letter. If you are moving on to a subsequent round, you'll have 45 to 56 days before it begins, starting from the date of your education session. The reviewer will make a maximum of three attempts to contact the designated individual(s) for your office. If these attempts are unsuccessful, it will be your responsibility to initiate contact with the Medical Reviewer regarding your education session. If this occurs, you will move on to a subsequent round and the 45 to 56-day period will begin on the date of the third missed attempt.

Last Reviewed: 07/29/2026

Hospices should use the beneficiary count from the most current Beneficiary Summary report pulled from the PS&R System available at the time of Self-Determined Hospice Cap (SDHC) filing. Hospices do not have the ability to accurately account for their beneficiary counts outside of the PS&R system. This is because beneficiary allocations are constantly updated as more paid claims are included in the data pool.

The beneficiary allocations reported on the Beneficiary Allocation Summary report pulled at the time of SDHC filing is not a final beneficiary allocation number. This number almost always continues to drop as more claims are processed for beneficiaries that were on service in the reporting cap year that continue to receive service in the subsequent cap year(s). Do note that hospice services rendered by other hospices to the same beneficiary are included in the beneficiary count allocation, which is the biggest reason hospices cannot accurately account for their beneficiary count outside of the PS&R system.

Resource: Hospice Caps.

Last Reviewed: 07/29/2026

Palmetto GBA is required by CMS to do a "look-back" review of the three prior years from the initial cap determination being issued. For example, the initial cap determination of September 30, 2024, cap year includes revisions to the 2023, 2022 and 2021 cap years. The provider is only notified of such revisions if the result is an additional overpayment or refund.

Last Reviewed: 07/29/2026

The Home Health and Hospice Billing When a New Medicare Beneficiary Identifier Is Assigned article provides direction on using the eServices MBI Lookup tool to receive the current MBI. This should avoid billing delays.

Last Reviewed: 07/29/2026

For Medicare payment purposes, an election for Medicare hospice care must be made on or after the date that the hospice provider is Medicare-certified. As with any election, the hospice must fulfill all other admission requirements, such as certification or recertification, any required face-to-face encounters, or Conditions of Participation (CoP) assessments.

Resource: Publication 100-02, Medicare Benefit Policy Manual, Chapter 9 — Coverage of Hospice Services Under Hospital Insurance (PDF).

Last Reviewed: 07/29/2026

The original claim will reject if diagnosis code(s) on DDE/FISS page 3 appears to be related. The provider will need to submit an adjustment with remarks specifying the services are unrelated. The processing unit will review comments and diagnosis codes reported on the claim when making their determination. Please call customer service if you need assistance in preparing the claim.

Resources

Last Reviewed: 07/29/2026

Yes, both the transferring and receiving hospice can be paid for the date of transfer when a beneficiary changes hospice is permitted to bill and each will be reimbursed at the appropriate level of care for its respective day. For claims purposes the “from" date for the receiving hospice’s claim must be the same as the “through" date for the transferring hospice’s claim. Since both hospices can be reimbursed for the date of transfer, it counts as two days when calculating the hospice routine home care (RHC) high/low rates. When a transfer occurs in the first 60 days of a hospice election, a hospice day billed at the RHC level on day 60 (instead of 61) or later of the hospice election is paid at the low RHC rate.

Resources

Last Reviewed: 07/29/2026

When one hospice transfers a beneficiary to another hospice with any gap following the date of transfer, this is deemed a gap in care and therefore, would not be considered a continuous hospice election. CMS considers any gap, even one day, to be a discharge and readmission rather than a transfer, and the beneficiary would have to re-elect hospice care with the new hospice.

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Last Reviewed: 07/29/2026

If the patient travels outside of the service area, you may discharge the beneficiary. This way, if the patient requires medical treatment while in the process of transferring, he or she can access it under his or her Traditional Medicare fee-for-service coverage. This would end the patient’s current benefit period and require the patient to re-elect hospice coverage at the new hospice and begin a new benefit period.

Resource: Hospice Transfer Requirements.

Last Reviewed: 07/29/2026

Hospice payment rates are updated annually and published by CMS in the Federal Register before October 1 each year. To assist hospices in obtaining their current hospice rates, Palmetto GBA provides a Hospice Rate Calculator which is available for every state.

Last Reviewed: 07/29/2026

You can find information about the hospice caps, including the annual cap amounts, Hospice Cap/Inpatient Day Limitation Calculator, beneficiary allocation and case studies (PDF) on our website.

Last Reviewed: 07/29/2026

Federal regulations require that Medicare fee-for-service contractors maintain payment responsibility for managed care enrollees who elect hospice; specifically, regulations at 42 CFR Part 417, Subpart P, 42 CFR 417.585 Special Rules: Hospice Care (b) and 42 CFR 417.531 Hospice Care Services (b).

While a hospice election is in effect, certain types of claims may be submitted to the Medicare Administrative Contractor (MAC) by either the hospice provider or a provider treating an illness not related to the terminal condition. The claims are subject to Medicare rules of payment.

  • Hospice services covered under the Medicare hospice benefit are billed by the Medicare hospice
  • Institutional provider types may submit claims to Medicare with the condition code "07" when services provided are not related to the treatment of the terminal condition
  • MA plan enrollees that elect hospice may revoke hospice election at any time, but claims will continue to be paid by the MAC as if the beneficiary were enrolled in Medicare until the first day of the month following the date hospice election was revoked

Last Reviewed: 07/29/2026

There is no need to launch an investigation as the 32I TOB is valid. When your staff sees claims with that bill type it indicates that the Medicare Administrative Contractor (MAC) initiated the claim adjustment. Common reasons that 32Is occur include:

  • During the quarterly reconciliation process that occurs when an outlier, which was previously unpayable because it exceeded 10% of the HHA's total Home Health Prospective Payment System (HH PPS) payments, is now payable due to the subsequent processing of HH PPS claims over the calendar year
  • There has been an error identified in previous processing that facilitates the need for the MAC to adjust claim on behalf of the provider community

There is no action that is needed on the behalf of providers when 32I TOBs appear on remittance advice.

Last Reviewed: 07/29/2026

The Palmetto GBA website is a great tool to find out a magnitude of information regarding RCD including appropriately responding the ADRs received. The checklist can be found using the link Responding to a Home Health Additional Documentation Request (ADR) (PDF). Be sure to follow all the instructions on the ADR to ensure you are providing the information being requested and send to the correct address.

Resources

Last Reviewed: 07/29/2026

The information found in CMS IOM Publication 100-08, Medicare Program Integrity Manual, Chapter 3 Section 3.3.2.4 (PDF) describes what meets the signature requirements to avoid receiving related denials. “For medical review purposes, Medicare requires that the person(s) responsible for the care of the beneficiary, including providing/ordering/certifying items/services for the beneficiary, be identifiable as such in accordance with Medicare billing and coverage policies, such as the Social Security Act §1815(a) and §1833(e). Medicare contractors shall consider the totality of the medical record when reviewing for compliance with the above.

Signatures are required upon medical review for two distinct purposes:

  1. To satisfy specific signature requirements in statute, regulation, national coverage determination (NCD) or local coverage determination (LCD); and
  2. To resolve authenticity concerns related to legitimacy or falsity of the documentation

If review contractors find reasons for denial unrelated to signature requirements, the reviewer need not proceed to signature authentication.

Last Reviewed: 07/29/2026

The Consolidated Appropriations Act of 2023 (Pub. L. 117–328) (CAA, 2023), was signed into law on December 29, 2022. Division FF, Section 4121 of the CAA, 2023 (PDF) which established new benefit categories. One of those new benefits were for Mental Health Counselor (NHC) services furnished by and directly billed by the MHC. Section 4121(b)(2) of the CAA, 2023 (PDF) specifically adds these services to covered hospice care services under Section 1861(dd)(2)(B)(i)(III) of the Act.

The CAA, 2023 revised section 1861(dd) of the Act to state that the hospice interdisciplinary group (IDG) is required to include one social worker, MFT, or MHC. To implement Division FF, section 4121 of the CAA, 2023, in the CY 2024 Physician Fee Schedule final rule CMS finalized changes to the regulations at §§ 418.56 and §§ 418.114 to permit MFTs or MHCs to serve as members of the hospice IDG.

Resources

Last Reviewed: 07/29/2026

You can't adjust a claim to correct a medically denied line. You must submit a Redetermination: 1st Level Appeal form along with a corrected claim.

Last Reviewed: 07/29/2026


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