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Person is currently on Medicare. We were at a cousins funeral yesterday, she died from cancer. She was placed in a hospice care facility and we were told by her family member that Medicare doesn't pay for hospice. They explained that because she was at end stage and no hope of getting better, that Medicare doesn't pay. Is this true?

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Anyone who is on hospice is at end stage. That's what hospice is for. People who are expected to recover are not eligible for hospice. And Medicare does pay for hospice fully realizing that the person is dying.
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