Hospice Compliance Audit Checklist: 40 Questions to Answer Before Your Next Auditor Arrives

Hospice auditors come in many forms: Medicare Administrative Contractors conducting Targeted Probe and Educate reviews, Unified Program Integrity Contractors investigating potential fraud, the Comprehensive Error Rate Testing program, the HHS Office of Inspector General, state surveyors, and accrediting organizations. In 2026, they are more active than ever, with a nationwide hospice enrollment moratorium, large-scale payment suspensions, heightened oversight of new hospices in several states, and CMS's new Service and Spending Variation Index (SSVI).

The best time to find problems is before an auditor does. This article provides 40 questions, organized by topic, that hospice leaders, compliance officers, and clinical managers can use to test their readiness. Each question includes a short explanation of why it matters and what a strong answer looks like. It is educational and does not replace legal or professional advice.

How to Use This Checklist

• Answer each question honestly, using records rather than assumptions.

• Assign an owner for each question.

• Treat any "no" or "not sure" as a finding that needs follow-up.

• Use a sample of records, not just policies, to test your answers.

• Repeat the checklist at least annually and after major changes.

Section 1: Enrollment and Ownership

1. Is our PECOS enrollment information accurate and current?

Why it matters: Inaccurate enrollment information can lead to deactivation or revocation, and mismatches with state licensing records raise red flags. Strong answer: PECOS matches our legal name, addresses, practice locations, owners, and managing employees, and changes are reported on time.

2. Do our Medicare, Medicaid, and state licensing records match each other?

Why it matters: Regulators compare records across agencies. Strong answer: All records reflect the same ownership, management, locations, and service areas.

3. Have we screened owners, managing employees, staff, and physicians against exclusion lists?

Why it matters: Payments for items or services furnished by excluded individuals are prohibited. Strong answer: We screen monthly against the OIG list and state lists and document results.

4. Do we know whether we are subject to enhanced oversight?

Why it matters: Enhanced oversight affects medical review and, beginning January 31, 2026, prohibits telehealth face-to-face recertification encounters. Strong answer: We have confirmed our status and adjusted processes.

5. Are we ready for an unannounced site visit today?

Why it matters: A site visit finding that a hospice is not operational can lead to revocation. Strong answer: The office is open and staffed during posted hours, signage is posted, and staff know how to respond.

Section 2: Election, Addendum, and Notices

6. Does our election statement include every required element?

Why it matters: Missing elements can invalidate the election. Strong answer: Our current form includes all elements under 42 CFR 418.24(b), including cost-sharing and BFCC-QIO information.

7. Are election effective dates never earlier than the signature date?

Why it matters: Days before a valid election are not covered. Strong answer: Our EHR or process prevents earlier effective dates, and audits confirm compliance.

8. Are we providing the election statement addendum to every patient electing on or after October 1, 2026, within five days?

Why it matters: The FY 2027 hospice final rule made the addendum mandatory. Strong answer: Every patient receives a patient-specific addendum within five days, and updates occur within three days when relatedness changes.

9. Are Notices of Election filed within five calendar days and accepted?

Why it matters: Late NOEs make the hospice liable for days before filing. Strong answer: We track NOEs daily and confirm acceptance.

10. Are attending physician changes supported by signed statements?

Why it matters: Changes without signed statements can create claim and certification problems. Strong answer: Every change has a signed, dated statement with an effective date not before the signature.

Section 3: Certifications and Face-to-Face Encounters

11. Is every certification signed by the right physicians within the allowed timeframe?

Why it matters: Certification timing and sources are conditions of payment. Strong answer: Initial certifications are signed by the hospice physician and attending physician, if any, no more than 15 days before the election, and before billing.

12. Are narratives composed by physicians, individualized, correctly placed, and attested?

Why it matters: Generic or misplaced narratives are a common denial reason. Strong answer: Narratives are written by the certifying physician, sit immediately above the signature with the attestation, and reflect patient-specific findings.

13. Are face-to-face encounters completed within 30 days before every third and later benefit period?

Why it matters: Missing or late encounters invalidate recertification. Strong answer: We track encounter windows and complete encounters on time.

14. Are face-to-face attestations complete?

Why it matters: Missing attestation elements cause denials. Strong answer: Attestations include the encounter date and signature, and, when performed by a nurse practitioner or non-certifying physician, state that findings were provided to the certifying physician.

15. Are we ready for telehealth face-to-face claims reporting beginning January 1, 2027?

Why it matters: Telehealth encounters must be reported on claims. Strong answer: Our EHR and billing workflows capture and report telehealth encounters.

16. Are all certifying physicians and face-to-face practitioners enrolled in Medicare or validly opted out?

Why it matters: Enrollment is required for certifying physicians and for telehealth encounters. Strong answer: We verify enrollment at onboarding and periodically.

Section 4: Eligibility and Long Stays

17. Does admission documentation support a six-month prognosis?

Why it matters: Eligibility at admission is the foundation of every claim. Strong answer: A hospice physician reviews measurable clinical information before admission.

18. Do we measure clinical indicators consistently over time?

Why it matters: Reviewers look for evidence of decline. Strong answer: We record weights, intake, functional scales, and complications at regular intervals.

19. Do we review long-stay patients regularly for continued eligibility?

Why it matters: Long stays are a key SSVI measure and audit target. Strong answer: We review every patient entering the third benefit period and periodically after.

20. Do our narratives explain periods of stability?

Why it matters: Stable patients may not appear terminally ill. Strong answer: Narratives explain why the prognosis remains six months or less, or the patient is discharged.

Section 5: Levels of Care

21. Is every general inpatient day supported by documented symptoms that could not be managed elsewhere?

Why it matters: General inpatient care is a high-cost, high-scrutiny level. Strong answer: Daily documentation supports each day, and patients transition when symptoms are controlled.

22. Does every continuous home care day meet the eight-hour minimum and nursing majority?

Why it matters: Continuous home care requires at least eight hours in a calendar day, with nurses providing more than half. Strong answer: Time records support every billed day.

23. Are we within the 20 percent inpatient limit?

Why it matters: Excess inpatient days are paid at the routine home care rate. Strong answer: We monitor inpatient days throughout the cap year.

24. Are respite stays documented correctly?

Why it matters: Respite is limited and must be documented. Strong answer: Respite dates, settings, and reasons are documented.

Section 6: Live Discharges and Revocations

25. Do we know our live discharge rate by type?

Why it matters: High live discharge rates combined with long stays may signal ineligible enrollment. Strong answer: We track revocations, no longer terminally ill discharges, moves, and transfers monthly.

26. Are revocations always the patient's own choice?

Why it matters: Hospice-initiated revocations are improper. Strong answer: Every revocation has a signed statement and documented patient reason.

27. Are no longer terminally ill discharges supported by physician orders, clinical findings, and notices?

Why it matters: Discharges require specific documentation and notices. Strong answer: Every discharge has an order from an authorized physician, documented findings, required notices, and a discharge summary.

28. Do we track readmissions within seven days?

Why it matters: Quick readmissions are an SSVI measure. Strong answer: We review every readmission for clinical justification.

Section 7: Nursing Facilities and Relatedness

29. Do we have current written agreements with every nursing facility we serve?

Why it matters: Agreements are required before serving facility residents. Strong answer: Every agreement is signed, current, and includes required provisions.

30. Do our plans of care for facility residents identify each provider's responsibilities?

Why it matters: Coordinated plans of care are required. Strong answer: Plans list hospice and facility responsibilities and are developed with facility input.

31. Are our relatedness decisions individualized and clinically justified?

Why it matters: CMS expects virtually all care to be related. Strong answer: Unrelated determinations are exceptional and documented with clinical explanations.

32. Do we know our non-hospice spending and Part D overlap?

Why it matters: Non-hospice spending is an SSVI measure. Strong answer: We review SSVI results and available data and address patterns.

Section 8: Cap, Billing, and Overpayments

33. Do we monitor our aggregate cap position monthly?

Why it matters: Cap overpayments can be large. Strong answer: We track payments, proportional beneficiary counts, and reserves.

34. Do we file the self-determined cap report on time?

Why it matters: Late filing can lead to payment suspension. Strong answer: We file and pay within five months after the cap year ends.

35. Do we have a process to identify, report, and return overpayments within 60 days?

Why it matters: Retaining overpayments can create False Claims Act liability. Strong answer: We investigate potential overpayments promptly and document reporting and repayment under 42 CFR 401.305.

Section 9: Referral Relationships and Physician Arrangements

36. Are medical director and physician arrangements compliant?

Why it matters: Medical director agreements have been used to disguise kickbacks. Strong answer: Agreements are written, fair market value, documented with time logs, and not tied to referrals.

37. Are our marketing and referral practices free of inducements?

Why it matters: Paying for referrals violates the Anti-Kickback Statute. Strong answer: We do not pay per referral, provide free services to referral sources, or use recruiters.

Section 10: Audit Response Readiness

38. Do we have a process to log and respond to every ADR on time?

Why it matters: Missed ADRs result in denials. Strong answer: ADRs are logged on arrival, assigned, reviewed, and submitted before deadlines, 45 days for MACs and generally 30 days for UPICs.

39. Do we have counsel and a payment suspension response plan ready?

Why it matters: Suspension rebuttals typically must be submitted within 15 days. Strong answer: Counsel is identified, and we have a document preservation and rebuttal plan.

40. Do we audit ourselves regularly and act on findings?

Why it matters: Internal audits find problems before auditors do. Strong answer: We audit high-risk areas at least quarterly, track corrective actions, and report results to leadership and the governing body.

Bonus Questions for Specific Situations

For New Hospices

• Are we subject to a Provisional Period of Enhanced Oversight, and do we understand its medical review and telehealth implications?

• Have we built compliant processes from the start, rather than relying on templates from other hospices?

For Hospices Considering a Transaction

• Do we understand the nationwide enrollment moratorium, the Medicare 36-month rule, and any state licensing restrictions?

• Have we evaluated our audit history and affiliation risks?

For Hospices Serving Assisted Living Facilities

• Are visit frequencies appropriate and documented separately from facility care?

• Are referral relationships with facilities free of inducements?

For Hospices With Inpatient Units

• Do inpatient units meet staffing and physical environment requirements?

• Is every general inpatient day supported?

Using Data to Answer the Questions

Many questions can be answered faster with data:

• SSVI scores and the underlying measures.

• PEPPER reports.

• Internal reports of length of stay, live discharges, readmissions, levels of care, and visit patterns.

• Cap and inpatient day tracking.

• ADR and denial tracking.

Data identifies where to look. Record reviews confirm what is actually happening.

Common Gaps Found With This Checklist

• Outdated election statement forms.

• Late or generic addenda.

• Templated physician narratives.

• Late face-to-face encounters.

• No tracking of live discharges by type.

• Expired nursing facility agreements.

• Missing time logs for medical directors.

• No written suspension response plan.

Turning Answers Into Action

Prioritize

Rank findings by risk: payment risk, legal risk, and patient care risk. Address items that affect eligibility, certifications, and enrollment first.

Assign and Track

For each finding, assign an owner, a deadline, and a measure of success. Track progress in a corrective action log.

Verify

Re-test findings after corrective actions to confirm they worked.

Report

Report results to the compliance committee and governing body, consistent with OIG's General Compliance Program Guidance.

Building the Checklist Into the Compliance Program

• Include the checklist in the annual compliance work plan.

• Assign each section to a responsible leader.

• Use the results to set internal audit priorities.

• Report results and corrective actions to the compliance committee.

• Update the checklist when regulations change, such as new requirements in annual hospice rules.

Documentation to Have Ready

When an auditor arrives, hospices should be able to produce quickly:

• Enrollment records and ownership information.

• Current policies and procedures.

• Election statements, addenda, certifications, and face-to-face documentation for sampled patients.

• Interdisciplinary group meeting records.

• Nursing facility agreements.

• Medical director agreements and time logs.

• Internal audit reports and corrective action logs.

• Training records.

• Cap reports.

A Hypothetical Example

A hospice completes the 40-question checklist and finds gaps in seven areas: its election statement form lacked updated BFCC-QIO language, addenda were sometimes provided on day six or seven, two nursing facility agreements had expired, narratives for one physician were templated, its live discharge rate had not been tracked by type, readmissions were not reviewed, and it had no written suspension response plan.

The hospice fixes its forms, sets an addendum due date of day three, renews agreements, provides physician education and removes narrative templates, builds a live discharge dashboard, and engages counsel to prepare a response plan. Six months later, it repeats the checklist and finds all seven items resolved.

A Quick Self-Scoring Method

To prioritize, score each question:

• 2 points: fully compliant, confirmed by records.

• 1 point: partly compliant or not confirmed.

• 0 points: not compliant or unknown.

A score below 70 out of 80 suggests significant work is needed. Any 0 in Sections 2, 3, 4, or 10 should be treated as urgent, because those areas most directly affect payment and audit outcomes.

Pairing the Checklist With Record Reviews

For each section, pull a small sample of records to confirm the answer. For example, for Section 3, review ten recent recertifications; for Section 6, review ten recent live discharges; for Section 7, review five nursing facility agreements and plans of care.

Prioritizing When Resources Are Limited

Small hospices may not be able to address every gap at once. Start with:

• Election statements and Notices of Election.

• Certifications, narratives, and face-to-face encounters.

• Eligibility documentation for long-stay patients.

• Enrollment accuracy.

• A suspension response plan.

These areas carry the most immediate payment and enforcement risk.

Using the Checklist After an Audit

If an auditor has already found problems, use the checklist to look for related gaps. Findings in one area often point to weaknesses in others, such as certification problems that also appear in long-stay eligibility or live discharges.

Final Tip

Keep a copy of each completed checklist, with dates and owners, as evidence of an active compliance program.

Key Takeaways

• Auditors in 2026 focus on enrollment, elections, certifications, eligibility, levels of care, live discharges, facility coordination, relatedness, the cap, referrals, and audit readiness.

• Answer every question with records, not assumptions.

• Treat every gap as a finding with an owner and deadline.

• Repeat the checklist regularly and after major changes.

• Involve counsel for serious findings and potential overpayments.

Questions Leadership Should Ask After Completing the Checklist

• Which findings carry the greatest payment or legal risk?

• Do we have the resources to address them quickly?

• Which findings require counsel's involvement?

• When will we re-test?

Frequently Asked Questions

How often should we use this checklist?

At least annually, and after major changes such as new regulations, ownership changes, or audit findings.

Who should complete it?

Compliance, clinical leadership, billing, and administration, with input from the medical director.

Should we answer from policies or records?

From records. Policies matter, but auditors look at what actually happened.

What if we find serious problems?

Engage counsel, address root causes, and evaluate overpayment obligations.

Does passing this checklist guarantee an audit will go well?

No, but it significantly reduces risk and improves readiness.

Conclusion

In 2026, hospice auditors are looking at enrollment, election documentation, certifications, eligibility, levels of care, live discharges, nursing facility coordination, relatedness, the cap, referral relationships, and audit readiness. Answering these 40 questions honestly, using real records, and acting on every gap is one of the most effective ways to prepare. Hospices that make this checklist part of their routine compliance program will be ready when the next auditor arrives.

How HealthBridge Can Help

HealthBridge is a healthcare management consulting firm that helps hospices complete compliance readiness assessments, audit records against each area of this checklist, build corrective action plans, and prepare for MAC, UPIC, OIG, and survey reviews. If you would like an independent assessment, please get in touch with us. We will be happy to help you with this topic.

References

• Electronic Code of Federal Regulations. 42 CFR Part 418, Hospice Care. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-418

• Electronic Code of Federal Regulations. 42 CFR 401.305, Requirements for Reporting and Returning of Overpayments. https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-A/part-401/subpart-D/section-401.305

• Centers for Medicare & Medicaid Services. Medicare Benefit Policy Manual, Chapter 9, Coverage of Hospice Services Under Hospital Insurance. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c09.pdf

• Centers for Medicare & Medicaid Services. Medicare Claims Processing Manual, Chapter 11, Processing Hospice Claims. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/clm104c11.pdf

• Centers for Medicare & Medicaid Services. State Operations Manual, Appendix M, Guidance to Surveyors: Hospice. https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_m_hospice.pdf

• Federal Register. Medicare Program; FY 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements (August 3, 2026). https://www.federalregister.gov/documents/2026/08/03/2026-15686/medicare-program-fy-2027-hospice-wage-index-and-payment-rate-update-and-hospice-quality-reporting

• Centers for Medicare & Medicaid Services. Home Health and Hospice Nationwide Moratorium Q&As. https://www.cms.gov/files/document/hh-hospice-moratorium-faqs.pdf

• Centers for Medicare & Medicaid Services. Additional Documentation Request. https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-education/additional-documentation-request

• U.S. Department of Health and Human Services, Office of Inspector General. General Compliance Program Guidance. https://oig.hhs.gov/compliance/general-compliance-program-guidance/

• U.S. Department of Health and Human Services, Office of Inspector General. Exclusions Program. https://oig.hhs.gov/exclusions/