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Reimbursement Details of Bereavement Services by Medicaid and Medicare

In response to numerous calls regarding the reimbursement of bereavement services, NFDA has compiled the following information.


The Medicare program does not cover bereavement services unless they are provided by a hospice in connection with hospice care. For an entity to be recognized as a hospice under the Medicare law, it must meet a series of specific requirements and be enrolled with the Medicare program. We would note that hospices provide care to beneficiaries who elect the "hospice benefit," but these beneficiaries must waive any other medical benefits provided under general Medicare coverage. Therefore, bereavement services not provided by a hospice organization will not be reimbursed by Medicare.


Medicaid is required to provide certain services to individuals who fall under the statutorily defined group of "categorically needy." States also have the option of providing services to people who do not necessarily meet the specific income criteria for the categorically needy group, but who are deemed "medically needy." Services provided to these groups of individuals fall into two categories – mandatory services and optional services. Mandatory services are those that must be provided for a state to receive federal matching funding. Optional services are those that states may provide and receive federal funds. Hospice care is an optional service. According to the Federal Medicaid Rules, a hospice must be primarily engaged in providing care to terminally ill individuals and meet the Medicare conditions of participation for hospices.

Each state has the option to provide hospice care solely to categorically needy individuals, to both categorically needy and medically needy individuals, or to neither. According to the relevant federal Medicaid rules, in states that have elected to provide hospice care, bereavement counseling is included in this covered service under Medicaid. Hospice benefits offered under Medicaid cannot be less comprehensive than hospice benefits provided under Medicare. Counseling services provided to a terminally ill patient, family members, and other people close to that individual are covered under the hospice benefit of Medicaid. Bereavement counseling (counseling services provided after the individual’s death) must also be provided a part of hospice care, but, similar to the Medicare approach, bereavement counseling is not a separately reimbursable service. We would note specific rules applying to the offering of hospice services vary by state. Due to these rigorous requirements, it is unlikely that a funeral home would meet federal or state requirements to be regulated as a hospice.