Medicare reviewers auditing a hospice claim do not stop at the diagnosis code on the claim form. CGS Administrators, the Medicare Administrative Contractor for a 15-state jurisdiction that includes Pennsylvania, Virginia, and Missouri, states in its current hospice Local Coverage Determination that a qualifying diagnosis alone does not establish a six-month prognosis. The reviewer is testing for documented clinical decline, not a diagnosis code. A hospice that certifies on diagnosis alone, without charted decline indicators in the record, is building a file that collapses the moment it is pulled for review.
The Clinical Record Behind the Six-Month Prognosis
Under 42 CFR 418.22, the certification must state that the patient's life expectancy is six months or less if the illness runs its normal course, and clinical information and other documentation that support the medical prognosis must accompany the certification and be filed in the medical record. The regulation separates the diagnosis from the finding that supports it. CGS's Local Coverage Determination for determining terminal status, L34538, goes further: some patients will not meet the listed clinical guidelines and still have a six-month prognosis, and coverage can still apply when the record documents clinical factors outside those guidelines. The reverse holds too. A diagnosis on the covered list, without decline indicators charted in the record, does not carry the prognosis on its own.
The Decline Indicators a Reviewer Tests
CGS's LCD ties the prognosis finding to measurable decline across several domains. A Karnofsky Performance Status or Palliative Performance Score below 70%, combined with dependence on assistance for two or more activities of daily living, is one functional marker. Progressive weight loss unrelated to a reversible cause, decreasing serum albumin, and dysphagia leading to recurrent aspiration are nutritional markers. The LCD also sets disease-specific criteria: NYHA Class IV heart failure on optimal treatment, FAST stage 7 or beyond for dementia, a glomerular filtration rate under 15 for renal disease. Each marker is a measurement, not an impression. A chart note stating that the patient is declining, without a PPS score, a weight trend, or a lab value attached to it, gives a reviewer nothing to test the conclusion against. For how MACs apply an LCD generally once an audit opens, see Local Coverage Determinations: How MACs Use LCDs in an Audit.
The Narrative Requirement Under 42 CFR 418.22
Every certification and recertification requires a brief narrative explanation of the clinical findings that support a six-month prognosis, written as part of the certification form or as an addendum. The narrative cannot contain check boxes or standard language used for every patient. Starting with the third benefit period, a hospice physician or nurse practitioner must also complete a face-to-face encounter within the 30 days before recertification, and the narrative for that period has to explain why the findings from that encounter support the prognosis. CMS's billing and coding guidance for the LCD describes the standard directly: documentation should paint a picture for the reviewer, with observations and data attached to the conclusion, and any finding that looks inconsistent with a six-month prognosis should be addressed rather than left for the reviewer to notice first.
A prognosis supported by a diagnosis code and a generic narrative is a prognosis the reviewer is equipped to overturn.
Why Early Legal Counsel Is Critical
It is critical that hospices promptly retain experienced healthcare defense counsel when an additional documentation request, a Targeted Probe and Educate review, or a Recovery Audit Contractor (RAC) review names six-month prognosis documentation as the issue. Early legal intervention can protect the hospice's rights, make certain the response addresses the specific decline indicators the reviewer is testing, avoid inadvertent admissions, and preserve the defenses that are available before extrapolation turns a sample of flagged claims into a full-population recoupment demand. Delaying legal representation can significantly affect the outcome of a matter and expose the hospice to unnecessary risk.
Health Law Alliance's attorneys have overseen 2,000+ audits.
How Health Law Alliance Can Help
Health Law Alliance's hospice and home health audit defense attorneys review certification narratives and LCD decline-indicator documentation before an audit response is due, and build the clinical record a reviewer needs to sustain a six-month prognosis finding on appeal. For how an additional documentation request can escalate into a RAC review, see Health Law Alliance's Medicare audit defense practice. For the broader mechanics of a hospice audit and the aggregate cap exposure that follows a pattern of extended stays, see Health Law Alliance's prior explainer, Hospice Medicare Audits and Eligibility Challenges. If your hospice has received a documentation request citing an insufficient prognosis, contact Health Law Alliance for a free, confidential consultation.
