Palliative Care vs. Hospice Billing: Why Growing Programs Struggle to Get Paid

Reimbursement and Revenue Cycle Management

Traditional Medicare only pays for physician and licensed independent practitioner services in palliative care. It doesn’t pay for the full interdisciplinary team. Social workers, chaplains, and family support services are largely unreimbursed, yet they’re core to quality palliative care. The result is that fee-for-service palliative care rarely covers its costs, so many organizations treat it as a strategic or mission-driven service.

The payment landscape is a patchwork. Clinical visits are often paid for by fee-for-service Medicare and commercial plans. Some programs are covered through Medicare Advantage and ACO arrangements. In some states, Medicaid covers palliative care, but that funding is under pressure from federal Medicaid cuts.

Some providers are pursuing value-based and performance-based contracts, but those require proof of quality and cost outcomes that revenue cycle management teams are still learning to measure consistently. When margins are this thin, every missed charge, coding error, or preventable denial matters more than it would in a profitable service line.

Palliative Care vs. Hospice Care Billing

Hospice Billing

Hospice billing is simpler than palliative care billing, but it carries stricter eligibility requirements. Hospice care is generally paid per diem, with one daily rate covering staff, supplies, drugs, and equipment related to the terminal illness. The rate structure has four tiers: routine home care, continuous home care, inpatient respite, and general inpatient care. Eligibility requires a physician-certified prognosis of six months or less if the illness runs its normal course, and the patient must elect hospice instead of curative treatment for that illness.

Palliative Care Billing

Palliative care has no prognosis requirement, but its billing is more complex. Providers bill visit by visit, mostly using standard evaluation and management (E/M) codes. Each visit must stand on its own documentation, which needs to accurately record medical decision-making or total time, medical necessity, and the correct diagnosis codes. Advance care planning codes (99497/99498) can be billed alongside an E/M visit when documented properly, but these charges are frequently missed.

Hospital-Based Palliative Care

The hospital’s facility payment is bundled into the DRG, a flat rate per admission. The palliative physician or NP bills professional services separately under Part B, so consults and follow-up visits are still fee-for-service. Billing for hospital-based palliative care is complex, involving inpatient E/M levels, split/shared visits between physicians and NPs, prolonged services, and coordination with the attending team to avoid duplicate or denied claims.

Hospitalists also treat patients who are enrolled in hospice. When a physician who isn’t employed by the hospice provides that care, modifiers distinguish care related to the terminal illness from care for unrelated conditions, and errors here frequently lead to denials.

Community-Based Palliative Care

Community-based programs are paid purely fee-for-service for visits in homes and facilities. Travel time and care coordination mostly go unpaid.

Newer CMS Serious-Illness Codes

Principal Illness Navigation (G0023/G0024) and Community Health Integration (G0019/G0022) codes pay for navigation and support work by auxiliary staff. These codes are revised in the annual Physician Fee Schedule and are widely underused because their documentation and supervision rules are unfamiliar. They mostly apply to outpatient and community settings.

Palliative Care and the Opioid Epidemic

Pain management is a good example of why palliative care is so time-intensive, and so easy to underbill. Patients with serious illness often have undertreated pain, partly because opioid restrictions created in response to the epidemic made some clinicians hesitant to prescribe. The CDC’s 2022 opioid prescribing guideline explicitly excludes palliative, end-of-life, and cancer-related pain care, recognizing these patients’ different needs.

Palliative specialists are trained in balanced pain management including multimodal approaches, careful dosing, risk screening, prescription monitoring program checks, and safe storage and disposal. Earlier palliative involvement means pain and symptoms are managed before they escalate to a crisis. This approach supports both comfort and safer prescribing. It also takes time and careful documentation, and it’s exactly the kind of work that goes uncaptured when visit time and complexity aren’t recorded accurately.

Where Palliative Programs Lose Revenue and How to Close the Gaps

Much of the revenue palliative programs lose comes from work that was done but never billed correctly. The most common gaps are fixable:

• Unbilled visits. Charges tracked on paper lists or entered days later are easy to lose. Capturing charges at the point of care, on the same day, closes this gap.
• Undercoded visits. Goals-of-care conversations and family meetings take time. When clinicians document total time, visits can be coded at the level they earned, including prolonged services when they apply.
• Missed advance care planning. Advance care planning should be treated as a billable service with its own documentation, instead of being folded into the visit.
• Coding and modifier errors. Split/shared visits, diagnosis order, and hospice modifiers often result in denials. Reviewing claims before they go out catches these issues while they’re still easy to fix.

These fixes don’t require more staff, just workflows and tools that make accurate billing part of the daily routine.

How Claimocity Helps Inpatient Palliative Teams

Most palliative billing guidance focuses on community-based and outpatient care, but inpatient palliative billing has its own rules and workflows. Claimocity is built for inpatient and hospital-based providers, including palliative care teams, SNFists, and hospitalists caring for seriously ill patients.

Claimocity improves revenue cycle management for inpatient practices with a variety of specialized features:

• Point-of-care mobile charge capture allows consults and follow-ups to be billed the day they happen.
• AI-Powered Charge Capture pulls billable services from signed documentation.
• Rules engine and AI-Assisted QA catch coding and modifier issues before claims go out.
• Smart Central Census tracks patients across units and facilities.
• EHR integration and support for all inpatient specialty billing, not just palliative care.

Book a demo of our software and RCM services to learn more about what Claimocity can do for your inpatient practice.