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Hint: Coders should look to medical directors for information on related conditions.

Hospice regulations have strict guidelines about how to code diagnoses relevant to hospice services and coverage.

Here are some expert tips on navigating related and unrelated diagnosis coding for hospice and home care situations from Amy Smith, COC, CPC, CPCO, CPMA, which she shared during her HEALTHCON Regional 2025 presentation “Home Health and Hospice: Tips and Tricks.”

Don’t Miss the Background Context on Related Diagnoses

Smith quoted a 1983 hospice final rule that describes how the Centers for Medicare & Medicaid Services (CMS) define and categorize conditions related and unrelated to whatever is qualifying a Medicare beneficiary for hospice care, which says that conditions are assumed to be related unless proof that a condition is not related. (Medicare pays for hospice services, but commercial carriers do as well, and their policies may differ.)

There’s usually a group of people who decide which conditions may be related and therefore affect a patient’s hospice care, including a medical director, interdisciplinary group, and the clinician who does the assessment, which is usually a registered nurse (RN), Smith said.

“They discuss the patient, and they can figure out what’s related, what’s unrelated. They determine the diagnoses every month. If there’s something new that pops up, that’s what’s used to manage their covered services,” she said.

In the 2016 hospice final rule, CMS said hospices should report all diagnoses identified on the claim, she said; but the medical director has the final decision in determining what’s unrelated and they must provide clear documentation why. This may be particularly relevant for emergency services, because getting reimbursed for care can be complicated when hospice patients experience a health crisis and families enlist emergency services, as emergency departments may not know if a patient is in hospice care and if any conditions present are related to their terminal condition.

Get the Specifics on ICD-10-CM Coding

Coders need to report all of the conditions related to the reason for treatment, she said. “Anything that changes, of course, has to be documented in the record and a rationale for why we’re making the change.”

Coders should remember history codes, which can be used as secondary codes if they impact current treatment or care, and manifestation codes as well.

For Medicare beneficiaries, the principal diagnosis should be the same across all documents, including the Certification of Terminal Illness (CTI), the plan of care, and the notice of election, unless the coding guidelines require a change.

If the primary diagnosis changes from what’s on the CTI or doesn’t meet criteria, then a new CTI should be signed, she said. If there’s conflicting documentation in the nursing assessment compared to other parts of the hospice record or insufficient specifics, it’s appropriate to query the physician.

There are coding guidelines that hospices specifically need to keep in mind, Smith said. The general guidelines apply: Do not report any Z codes as principal, don’t list symptoms when the condition or disease is known, and don’t list uncertain diagnoses as primary. However, coders should also keep in mind that debility, failure to thrive, and unspecified dementia codes also cannot be used as principal diagnoses for hospice care.

For example, dementia itself is not a terminal diagnosis for hospice, and senile or vascular dementia are not supposed to be used as a primary diagnosis for home health care or a terminal diagnosis for hospice, Smith said. “We’re supposed to code the underlying condition as the principal, and then dementia would be secondary.”

Navigate Reporting the Gray Area of ‘Comfort Care’

During the presentation, several attendees asked Smith what specialty practices or emergency services should do when a patient pursues care and their hospice status isn’t obvious or known. The attendees said their practices were losing money because they were performing services in sites like nursing homes and billing for their services, but their claims were denied because the patient is in hospice. This can be complicated by the fact that patients can go in and out of hospice care, so coding and billing requirements for claims can also fluctuate. In such situations, some coders end up using modifier GW (Service not related to the hospice patient's terminal condition), which can make reimbursement more complicated to achieve.

“It seems like it’s a really gray area. Especially when you start using that GW modifier. So, I guess the best thing we could do would be to clearly document the discomfort the patient has because of the condition, why we’re doing it, and then hopefully that’s defensible. If we’re audited and they look at our medical records, it’s clinically indicated, it’s uncomfortable for them,” she said.

In such situations where a patient is in hospice care, the provider may be able to bill the hospice agency if the services are for a related condition. Ultimately, providers in these situations should coordinate with the hospice team to determine if the condition they’re providing services for is related or not related to the patient’s terminal condition.

Rachel Dorrell, MA, MS, CPC-A, CPPM, Production Editor, AAPC