Hospice Billing Instructions - Sequential Billing, Frequency of Billing and Transfers

Published 09/02/2020

Palmetto GBA is providing the following billing information to help ensure proper processing of hospice claims. Complete processing of claims may also involve requests for Additional Documentation Requests (ADRs) from Medical Review. This article will provide hospices with an understanding of this process, helping to reduce the possibility of payment delays.

Sequential Billing
Claims for hospice services are required to be processed in sequence by date of service. This requirement, known as "sequential billing," is essential to the efficient processing of Medicare hospice claims. Hospice claims must be matched by Medicare systems to the appropriate 90-or 60-day hospice benefit period in order to be paid. Without sequential billing, accurate matching of claims to benefit periods would often require the manual cancellation and reprocessing of numerous claims, resulting in increased costs to the Medicare program and unpredictable disruptions to hospice providers’ account receivable.

Claims for the beneficiary are to be submitted in service date sequence. The shared system must edit to prevent acceptance of a continuing stay claim or course of treatment claim until the prior bill has been processed. If the prior bill is not in history, the incoming bill will be returned to the provider with the appropriate error message.

For a hospice claim that is out of sequence, the FI searches their claims history. If the FI finds the prior claim has been received but has not been finalized (for instance, it has been suspended for additional development), they do not cause the out of sequence claim to be returned to the provider. Instead, they hold the out of sequence claim until the prior claim has been finalized and then process the out of sequence claim. Contractors shall perform editing to ensure hospice claims are processed in sequence after any necessary medical review of the claims has been completed.

The Medicare hospice benefit requires that providers submit two types of billing transactions; the Notice of Election (NOE) and the Claim. The NOE is submitted to notify the Medicare contractor, and the Common Working File (CWF) of the start date of the beneficiary’s election to the hospice benefit.

The first Claim is submitted only after the NOE has been submitted. Submitting the NOE will notify the CWF that the beneficiary has elected the Hospice Medicare Benefit. After the first claim posts to the system, the subsequent claim can then be submitted. The Fiscal Intermediary Shared System (FISS) Direct Data Entry (DDE) application allows you to enter NOEs and Hospice Claims. Providers without access to the DDE system must submit a hard copy NOE using the UB-04 claim form.

  • NOE submission: DDE Main menu, 02 — Claims/Attachments; Submenu 49 — NOE/NOA
  • Claims submission:  DDE Main Menu, 02 — Claims/Attachments; Submenu 28 — Hospice Claims

Therefore, a Notice of Election (NOE) is to be submitted and post to the CWF prior to submitting your first hospice claim. In order to verify that the NOE has processed (status/location P B9997), use DDE Main Menu 01 — Inquiries, and then Submenu Option 12 — Claims.

It is recommended that providers ensure that prior claims status/location are processed and paid (P B9997), rejected (R B9997) or denied (D B9997) before submitting the next claim. Processed claims will appear on your remittance advice. Claims that are not submitted sequentially will be moved to your return to provider (RTP) file. Claims in "T" status will not process and pay until the claim is fixed and resubmitted.

Sequential billing also ensures that there is no gap in days between the prior claim "To" date and the subsequent claim "From" date. Any gap in service dates will cause the claim to move to the RTP file (status/location T B9997).

In summary, follow the steps below to ensure compliance and to avoid delays in payment from sequential billing errors.

  • Submit the NOE through Direct Data Entry: DDE Main Menu — 02 Claims /Attachments, Submenu 49 — NOE/NOA
  • Use the DDE Main Menu — 01 Inquiries, Submenu 12 — Claims, to ensure the NOE has been processed (status/location P B9997). Note: If a claim is submitted before the NOE processes, your claim will be sent to the RTP file (status/location T B9997).
  • After the NOE has processed, submit the first claim. Ensure the "From" date and the "Admit" date on your claim matches the "From" date and "Admit date" on the NOE
  • In order to verify that your first claim has posted to the system, use DDE Main Menu 01 — Inquiries, Submenu 12. Look for a status/location P/ B9997, R/ B9997, or D/ B9997
  • After the first claim has processed, submit the next month’s claim. Ensure the "From" date on the claim you are submitting is one day after the "To" date on the previous claim
  • Finally, always check HIQA to ensure that the CWF has been updated with you NOE and claims submissions

Frequency of Billing
Medicare regulations, found in the Medicare Claims Processing Manual (CMS Manual System Pub. 100-04; Chapter 11; Section 90), state that hospice must bill monthly (i.e. limit services to those in the same calendar month if services began mid-month) rather than a 30-day period which could span two calendar months. Billing more frequently will cause the claims to return to provider for correction.

Due to sequential billing, hospices that are transferring a beneficiary to another hospice must submit their last claim, indicating the transfer, prior to the receiving hospice submitting their Notice of Transfer (type of bill 8XC). Receiving hospices who submit their claims before the transferring hospice submits their last claim may have their claims canceled.


  • CMS Manual System, Pub 100-04, Medicare Claims Processing Manual; Chapter 1 — General Billing Requirements; Section 50.2.3
  • CMS Manual System, Pub 100-04, Medicare Claims Processing Manual; Chapter 11 — Processing Hospice Claims


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