Hospice Drugs Billed to Part D: Paying Twice for Medication

Hospice Part D double billing occurs when Medicare pays separately through Part D for a medication already covered by the hospice’s Part A payment. The hospice collects for a package of care while the prescription drug benefit picks up a cost that belongs inside it. For a pharmacist, hospice nurse or plan reviewer, the revealing detail may be the instruction that moved the bill: who called the drug unrelated, what the patient record said, and who paid after that decision.

When a hospice knowingly shifts its drug costs to Part D, the evidence of hospice fraud can sit between records held by different businesses. The hospice has the care plan and medication assessment. The pharmacy submits the prescription claim. The Part D plan receives the statement about whether the drug belongs to hospice care. Connecting those records shows how the cost crossed the payment boundary.

Why the Hospice Payment Includes the Drug

Medicare pays the hospice a daily rate that includes responsibility for care related to the terminal illness and related conditions. Drugs needed for pain relief and symptom management belong in that package. The hospice receives its daily payment whether or not staff make a visit that day, as the Medicare Payment Advisory Commission’s March 2026 report explains.

That payment arrangement puts the cost of providing care on the hospice. A prescription charged elsewhere can leave the hospice with the payment and another payer with the expense. The billing question therefore reaches beyond whether a pharmacy dispensed the medication. It reaches the hospice’s responsibility for that medication.

What Is Not Covered Under Hospice?

A drug for a condition unrelated to the terminal illness and related conditions can remain covered by Part D.

The important distinction is between a drug’s clinical purpose and its place on a hospice’s formulary, the list of medications the hospice uses. A drug does not become unrelated because it is absent from that list.

The Centers for Medicare & Medicaid Services’ guidance on hospice and Part D also addresses drugs the hospice determines are no longer reasonable and necessary for pain relief or symptom management. A decision to stop covering a related drug does not send its cost automatically to Part D.

For a covered palliative outpatient prescription, hospice drug coinsurance is capped at $5. Shifting that prescription to Part D can make taxpayers pay twice and leave the patient with an unnecessary copayment.

Hospice Medication Unrelated Determination Documentation

Hospice medication unrelated determination documentation connects a patient-specific clinical assessment to the statement sent to the Part D plan. Medicare requires a written comprehensive assessment and a drug profile that includes prescriptions, over-the-counter drugs, herbal remedies and other treatments that could affect drug therapy. The care plan follows that assessment.

The statement reaching the payer can be much shorter than the record behind it. Under the revised guidance, a statement that a drug in the four specified categories is unrelated could be as simple as the letter U. The hospice was still expected to retain the clinical basis and produce it on request. A short statement could clear the pharmacy’s payment block. The clinical explanation remained at the hospice.

The memorandum identifies NCPDP reject code A3 for a drug that may belong under Medicare hospice coverage, and code 75 for prior authorization. The rejection and the statement used to clear it connect the pharmacy claim to the hospice’s coverage decision.

The plan’s file may show who supplied the unrelated designation and when. The hospice’s medication profile and assessment show what the designation was supposed to rest on. The guidance also says an unaffiliated prescriber should confirm having coordinated with the hospice and obtained its confirmation that the drug is unrelated. We examine those communications alongside the assessment and the statement sent to the plan.

When Do I Need a Hospice Election Statement Addendum?

For hospice elections beginning on or after October 1, 2026, the hospice must provide an election statement addendum identifying conditions, items, services and drugs it considers unrelated and will not cover. The Centers for Medicare & Medicaid Services’ final rule published in August 2026 changed the earlier arrangement, under which the hospice notified the patient of the right to request an addendum.

The addendum puts the hospice’s coverage decision in a document the patient receives. For a medication sent to Part D, it belongs beside the assessment, prescription and statement supplied to the plan. Those documents describe the same drug at different points: what the patient needed, what the hospice excluded and what the payer was told.

When the Formulary Sends the Bill Elsewhere

The whistleblower’s complaint against MJHS Hospice and Palliative Care alleged a concrete way to shift drug costs: leave a prescription outside the hospice formulary and let Part D pay. It illustrated the alleged practice with a hypothetical prescribing example:

The example turns on a pain medication and the hospice’s formulary. The alleged saving came from leaving the cost outside the hospice benefit. The pharmacy could fill the prescription while the hospice avoided paying for it.

The complaint also alleged that MJHS discharged patients who needed very expensive medications outside its formulary instead of seeking authorization for the hospice to pay for them. That allegation connects the medication decision to the decision to keep caring for the patient. An insider may know both the reason given for the discharge and the drug request that preceded it.

Why Medicare Changed the Pharmacy Check

The Centers for Medicare & Medicaid Services narrowed its hospice drug checks after the initial approach created access problems. Its July 18, 2014 memorandum said requiring prior authorization for all drugs used by hospice beneficiaries had created operational difficulties and, in some cases, barriers to medication access.

The memorandum cited a June 2012 Inspector General report identifying situations where Medicare could pay twice for hospice prescriptions and patients could pay unnecessary copayments. The revised approach focused the special hospice prior-authorization checks on four categories: pain medications, antinausea drugs, laxatives and antianxiety drugs. These treat symptoms commonly experienced near the end of life, regardless of the terminal diagnosis.

Hospices were encouraged to tell Part D plans about the election and any unrelated drugs in those categories before the pharmacy submitted a claim. That information could allow the plan to override the hospice payment block.

The revision narrowed the special payment check. Hospice responsibility still extended to all medications reasonable and necessary for managing the terminal illness and related conditions. A drug outside those four categories could still belong in the hospice’s payment.

Hospice Part D Drugs Billed While Elected

For hospice Part D drugs billed while elected, the election dates, the plan’s notice of enrollment and the clinical reason for each prescription help explain why Part D paid. A paid pharmacy claim shows where the first payment went. Later review and repayment records show where the cost ultimately stayed.

The revised Medicare guidance addressed claims paid before a plan learned that the patient had elected hospice. For drugs in the four categories, it called for retrospective review and contact with the hospice or prescriber to determine payment responsibility. Where the drug belonged to hospice, the plan and hospice were to negotiate repayment.

Medicare directed plans to resolve retail payment disputes with the hospice or beneficiary without requiring the pharmacy to reverse and rebill. The paid claim and the later adjustment can therefore sit in different parts of the transaction history.

For a hospice whistleblower, the useful connection runs from the medication record to the payment decision and the people who made it. The formulary, relatedness statement, election history, claim and repayment correspondence each answer a different part of that question. We work with pharmacy, hospice and health care billing insiders to connect those parts. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When You Know Why Part D Paid

If you know why a hospice drug reached Part D, talk with our whistleblower experts about the prescription, the instruction and the payment. We work beside you to build your strongest hospice whistleblower case around those decisions and bring in hospice fraud whistleblower lawyers who understand pharmacy billing and Medicare payment responsibility.