CMS Issues Update on Hospice Claims Processing Manual

The Situation Report | March 31, 2025

The U.S. Centers for Medicare and Medicaid Services has recently issued a Medlearn Matters (MM) article MM13882, which provides updated guidance regarding non-reportable principal diagnosis codes within Chapter 11 of the Claims Processing  Manual: Processing Hospice Claims.

As background, hospices must report the principal diagnosis on claims as the diagnosis most related to the terminal prognosis. However, according to the 2025 ICD-10-CM Official Guidelines for Coding and Reporting, “codes for symptoms, signs, and ill-defined conditions from Chapter 18 are not to be used as principal diagnosis when a related definitive diagnosis has been established.”  Diagnosis codes considered as supplementary or additional codes for reporting are unacceptable as principal diagnosis codes.

The Medicare Code Editor (MCE) and Integrated Outpatient Code Editor (I/OCE) detect claim errors, including unacceptable principal diagnosis codes. The MCE defines the unacceptable principal diagnosis list.

CMS will return the claim when hospices that report an unacceptable principal diagnosis as the principal diagnosis. 

For further information, HCANYS encourages our hospice members to review the updated guidance within the Claims Processing Manual here.