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Coverage mechanics for beneficiaries in both Medicare and Medicaid
The coverage mechanics for beneficiaries enrolled in both Medicare and Medicaid, under which Medicare is primary for the hospice per diem and Medicaid may cover room and board or supplemental services depending on the state plan.
Dual eligibility refers to beneficiaries enrolled in both Medicare and Medicaid. For hospice, Medicare is the primary payer for the hospice benefit, and Medicaid's role is chiefly room and board in facilities and services unrelated to the terminal illness.
When a dual-eligible beneficiary elects hospice, Medicare is the primary source of payment for the hospice benefit and the Notice of Election is submitted with Medicare as the primary payer [1]. Electing hospice waives the beneficiary's right to have Medicaid or Medicare separately pay for services related to the terminal illness, because those are now the hospice's responsibility; Medicaid may still pay for services unrelated to the terminal condition [2]. Depending on the state, the hospice may need to complete both a Medicare and a Medicaid hospice election. Medicaid's principal financial role for duals arises in the nursing facility. For a dual-eligible resident, the state pays the hospice a daily room-and-board amount equal to at least 95 percent of the facility rate the state would otherwise have paid, and the hospice passes that payment through to the facility [3]. Because Medicaid is state-administered, the mechanics — election forms, room-and-board rate-setting, and coordination with managed Medicaid — vary by state within the federal framework.
The two failure modes with duals are booking the wrong payer as primary and mishandling the terminal-versus-unrelated coverage line — both are audit-visible. Medicare is unambiguously primary for the hospice benefit, so the NOE goes out Medicare-primary and Medicaid billing is limited to room and board and clearly unrelated services. The judgment call that draws scrutiny is which services are "related" to the terminal illness and therefore the hospice's responsibility versus separately billable to Medicaid; get that determination wrong and you have either a duplicate-payment exposure or an uncollected room-and-board pass-through. For facility-based duals, the 95 percent pass-through must actually reach the nursing facility, since it is a flow-through obligation rather than retained revenue. Multi-state operators face state-specific dual-eligible billing rules that a single national process cannot accommodate.
Medicare is the primary payer for the hospice benefit, and the Notice of Election is submitted with Medicare primary.
Medicaid primarily covers room and board in a nursing facility — at least 95% of the facility rate — and may pay for services unrelated to the terminal illness.
It waives separate payment for services related to the terminal illness, since those become the hospice's responsibility, but Medicaid may continue to pay for unrelated services.
Yes; because Medicaid is state-administered, election requirements, room-and-board rate-setting, and managed-care coordination vary by state within the federal framework.
Vitalis Care is the end-of-life care app that helps hospices deliver compassionate care — while staying on top of schedules, field operations, documentation, compliance, and reimbursement.
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