Hospice Respite Billing and the 20 Percent Inpatient Cap: One Stay, Two Different Limits

Hospice inpatient cap and respite billing rules limit both the consecutive days paid at the respite rate and the hospice’s total inpatient days. Respite gives the caregiver a break. General inpatient care pays for pain or symptoms that cannot be managed elsewhere. Both count toward the hospice’s inpatient cap. Billing Medicare for a higher level of care than a patient needs takes taxpayer money meant for health care. For a nurse or biller examining hospice billing fraud, the useful question starts with the stay itself: why was the patient there, and what did the hospice charge Medicare for that day?

What Is Hospice Respite Care?

Hospice respite care is short-term inpatient care that relieves the patient’s caregiver. The patient receives care in an approved facility while the caregiver gets temporary relief.

Medicare pays the hospice a daily amount for the level of care furnished. Its hospice payment rule allows payment for only one level on a particular day.

In its report on hospice in assisted living, the Office of Inspector General at the Department of Health and Human Services explains that routine home care and continuous home care can take place in assisted living facilities, while general inpatient care and inpatient respite cannot. An assisted living residence can be the patient’s home for hospice purposes without becoming an approved inpatient setting.

How Long Can Hospice Respite Care Last?

The hospice respite care billing limit is five consecutive days at a time. Medicare pays the sixth and subsequent days of the same respite stay at the routine home care rate.

The payment rule also answers the day-counting questions that a stay’s total length can hide. The inpatient rate applies on the admission day and subsequent inpatient days, except the discharge day. On discharge, the appropriate home care rate applies. If the patient dies as an inpatient, the inpatient rate applies to that day, subject to the respite duration limit.

The limit applies to each consecutive period of respite. Each episode must meet the caregiver-relief purpose and approved-setting requirement.

What Are the Criteria for a GIP Hospice?

General inpatient care requires inpatient pain control or management of acute or chronic symptoms that cannot be managed in another setting. Respite responds to the caregiver’s need for relief. General inpatient care responds to the patient’s need for that level of symptom care.

The distinction reaches the claim. Revenue code 0655 identifies inpatient respite days, while 0656 identifies general inpatient days. The code table in Milliman’s Hospice Medicare Margins report identifies days as the units for both.

A whistleblower’s complaint against Serenity Hospice and Palliative Care alleged that the company failed to support the choice between the levels:

An inpatient bed and a hospice enrollment leave the crucial question unanswered: what required the higher level that day?

Covenant Hospice agreed to a $10,149,374 settlement announced in June 2015 over allegations that it billed general inpatient care when routine home care was appropriate. The government alleged that the company billed for a level of care its own medical records did not support.

The financial incentive is plain. The inspector general’s review of general inpatient billing reported that in 2012 Medicare paid $672 per day for general inpatient care, compared with $151 for routine care.

What Is the 80/20 Rule in Hospice?

The 80/20 rule in hospice limits general inpatient and inpatient respite days to 20% of the hospice’s total Medicare hospice days for the cap period. It applies across the hospice’s Medicare patients.

The hospice inpatient cap calculation combines general inpatient and respite days in the numerator. The denominator is all Medicare hospice days for that hospice during the same cap period, including routine and continuous home care days. It counts days of care, rather than people admitted, beds occupied or dollars received.

The rule is specific about the inpatient count: only days provided and billed as general inpatient or respite count as inpatient days. The billed level matters too. Respite days paid as routine home care after the consecutive-day limit have to be distinguished from days provided and billed at the respite level.

Switching a day between general inpatient care and respite leaves it within the inpatient categories counted by the cap. Those levels have different purposes and payment rates, but they share the same inpatient-day limit. The clinical justification for a level and the hospice’s total inpatient use are separate questions.

The cap accounting year follows the federal fiscal year, October through September. The days in the numerator and denominator must belong to the same hospice and period.

Chemed’s annual report describes Medicare caps as applying by billing number. Several hospice programs can share a provider number. An insider who knows which locations feed that number can explain why a local census and the cap calculation cover different populations.

How Does the Medicare Hospice Cap Work?

The aggregate hospice cap is a separate dollar limit. It uses the annual per-beneficiary cap amount and the hospice’s allocated beneficiary count, with fractional shares where required. The inpatient cap compares days, while the aggregate cap compares payments with a dollar ceiling.

What Happens If a Hospice Exceeds Medicare’s 20% Inpatient Cap?

Medicare recalculates allowable inpatient payment and requires the hospice to refund excess reimbursement. The Medicare Administrative Contractor makes that calculation at the end of the cap period.

The contractor divides the maximum allowable inpatient days by the actual inpatient days. It applies that ratio to the total inpatient reimbursement, then adds the excess inpatient days multiplied by the routine home care rate. It compares the resulting allowed payment with the inpatient payments already made.

The rule uses the hospice’s total inpatient reimbursement in the adjustment. That matters when the total contains both general inpatient and respite payments at different rates.

The consecutive-day respite limit changes payment for an individual stay. The inpatient cap reconciles payment across the hospice’s cap period. A billing review needs both views: the claim showing the stay, and the period calculation showing how inpatient payments were adjusted and what was refunded.

What OIG Found About Respite in Nursing Facilities

The inspector general identified cases in which inpatient respite for nursing-facility residents may have been inappropriate, as its January 2015 report on hospice in assisted living facilities recounts. Respite exists to relieve a caregiver. For an insider reviewing these bills, who needed that relief is a central question.

The inspector general’s review of general inpatient care, published in March 2016, projected $268.1 million in inappropriate general inpatient payments for 2012. It found stays in which patients never needed that level of care and stays in which they needed it for only part of the time billed. The reason for admission can stop supporting the billed level before the stay ends.

The Records Behind a Respite Claim and a Cap Adjustment

The useful evidence connects the reason for care, the claim and the payment adjustment. Nurses, care coordinators and healthcare billing staff can see different parts of that connection.

The election and certification support hospice eligibility. Care plans, caregiver circumstances and symptom notes explain the level of care. The facility record and claim connect that care to the setting, dates and billed days. We work with the reader to connect those records with the hospice’s Medicare day totals, inpatient payments, contractor adjustment and refunds.

Instructions to change a level, complaints about unsupported billing and the company’s response can connect the payment discrepancy to the decisions behind it. For hospice whistleblowers, that is where knowledge of the business adds something the claim alone cannot show. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Why National Inpatient Use Does Not Answer One Hospice’s Cap Question

Low national inpatient use does not establish that a particular hospice stayed below its inpatient cap. Routine home care accounted for 98.8% of Medicare-covered hospice days in 2024, according to MedPAC’s March 2026 report. That national day share describes the program, while the cap calculation concerns one hospice.

Milliman’s Hospice Medicare Margins, published in July 2019, analyzed Medicare claims and hospice cost reports but omitted the inpatient cap adjustment because it found so few inpatient days overall. The contractor still has to apply Medicare’s inpatient calculation to the hospice’s own days and payments.

When the Stay and the Bill Tell Different Stories

If you know why a hospice billed caregiver relief as GIP, extended respite billing or kept an inpatient overpayment, talk with our whistleblower experts about those decisions. We work with you to connect the care records, claims and payment decisions into your strongest hospice whistleblower case. We bring in hospice fraud whistleblower lawyers who understand hospice level-of-care and cap billing and stay beside you through the case.