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Centers for Medicare & Medicaid Services Rule Complicates Long-Term Care Facility and Hospice Relationships

Final rule aims to improve the quality and consistency of care between long-term care facilities and hospice providers but may increase conflict between facility and provider staff.

On June 27, the Centers for Medicare & Medicaid Services (CMS) published its final rule "Medicare and Medicaid Programs; Requirements for Long Term Care Facilities; Hospice Services."[1] The final rule requires long-term care (LTC) facilities, such as skilled nursing facilities (SNFs) and nursing facilities (NFs), to enter into written agreements with hospice providers to clearly delineate which services each entity will provide to nursing home residents who are receiving hospice care. Formerly, the regulations provided LTC facilities with the option of having a written agreement with one or more hospice providers for Medicare-eligible residents who elect hospice services. A companion final rule for Medicare-certified hospices was promulgated by CMS on June 5, 2008 and required written care coordination agreements.[2] This new final rule largely seeks to harmonize those requirements with regard to LTC facilities.

Overview of the Final Rule

The rule intends to improve the quality and consistency of care between LTC facilities and hospice providers by requiring each of these entities to enter into agreements that set forth definitive guidelines for the roles and responsibilities of each provider. Rather than impose requirements for LTC facility care coordination agreements that would mirror the existing hospice requirements at 42 C.F.R. § 418.112, CMS adopted a complementary approach in the final rule that reflects the difference in roles between these provider types and speaks to the role of LTC facilities in providing care to residents who elect to receive hospice services at the LTC facility. This delineation of duties better enables LTC facilities to demonstrate compliance with the Anti-Kickback Statute and beneficiary inducement laws by affirmatively prohibiting hospice staff from performing duties otherwise performed by LTC facility personnel.

In addition to provisions requiring care coordination agreements between LTC facilities and hospices, the final rule heightens patient transfer notification requirements for LTC facilities. The approach outlined in the final rule also finalizes language from the proposed rule that requires LTC facilities to notify their hospice counterparts about a need to transfer a resident from the facility for any condition.

The final rule places a premium on close coordination and communication between LTC facilities and hospice providers to enhance the quality and coordination of hospice care provided in LTC facilities. These improvements, however, may come at the cost of increased conflict between hospice staff and LTC facility staff. An extensive list of comments and responses in the final rule examines many challenging operational issues, such as whether the LTC facility or hospice provider would assume the role of primary decisionmaker as well as how providers would handle disagreements between hospice staff and LTC facility staff due to hospice providers changing orders unrelated to palliative care for a patient's terminal diagnosis. LTC facilities and hospices attempting to reconcile the final rule's care coordination agreement and patient transfer notification requirements with those already in effect for hospices may want to examine whether the changes require them to reexamine and perhaps renegotiate their contracts.


While the final rule represents the latest iteration in CMS's ongoing effort to improve care coordination and communication between different types of providers and facilities, many hospice providers and LTC facilities may be left wondering how the new regulations will be affected by the implementation of the reforms to Medicare hospice payments required by section 3132 of the Affordable Care Act. The new requirements on LTC facilities outlined in the final rule may need to be revisited following hospice payment reform, especially if that reform affects Medicare payments for hospice services furnished to residents of LTC facilities.

The final rule is set to become effective on August 26, 2013.

[1]. View the final rule here.

[2]. Medicare and Medicaid Programs: Hospice Conditions of Participation, 73 Fed. Reg. 32152 (June 5, 2008), available here.

Copyright © 2022 by Morgan, Lewis & Bockius LLP. All Rights Reserved.National Law Review, Volume III, Number 183

About this Author

Howard Young, Morgan Lewis, Healthcare lawyer

A nationally recognized leader in healthcare fraud and abuse and regulatory issues, Howard J. Young leads the Morgan Lewis healthcare practice and co-leads the healthcare industry initiative where he advises a range of healthcare clients on government investigations, regulatory, and transactional matters. Healthcare organizations turn to Howard to address their most critical legal, compliance and strategic business issues and to assist with internal and government investigations and self-disclosures. Howard regularly advises investors, including private equity firms, on...

Kathleen McDermott, Healthcare attorney, Morgan Lewis

Katie McDermott defends healthcare and life sciences clients throughout the United States in government investigations and litigation matters relating to criminal, civil, and administrative allegations, including violations of the False Claims Act related to off-label promotion, anti-kickback, reimbursement, privacy, and quality of care violations. Katie also advises on compliance matters relating to voluntary government disclosures, consent decrees, and corporate integrity agreements with the Office of Inspector General (OIG) and US Department of Justice (DOJ), as well...

Holly Barker, Healthcare Attorney, Morgan Lewis

Holly C. Barker counsels clients on US federal and state healthcare fraud and abuse enforcement and regulatory matters, primarily defending companies in False Claims Act (FCA) actions. Holly represents pharmaceutical and medical device manufacturers, hospital systems, long–term care facilities, clinical laboratories, physicians, and senior healthcare executives in complex criminal, civil and administrative fraud and abuse matters before US Attorneys’ Offices, the HHS Office of Inspector General, and state MFCUs.