Hospice Contract Compliance: Avoiding the Most Frequent Survey Citations

Hospice agencies operate in one of the most highly regulated sectors of healthcare, where clinical excellence, compassionate care, and strict regulatory adherence must coexist. Among the most common vulnerabilities identified during state and federal surveys are deficiencies related to contracted services. Hospice contract compliance remains a leading cause of survey citations, payment denials, corrective action plans, and in severe cases, enforcement actions that threaten an agency’s certification status.

Understanding where hospice agencies fail and how to proactively address contract-related risks is essential for leadership, compliance officers, administrators, and interdisciplinary team members. This article provides a comprehensive overview of hospice contract compliance, outlines the most frequent survey citations, and offers practical strategies to remain aligned with Medicare Conditions of Participation while protecting organizational integrity.

Understanding Hospice Contract Compliance

Hospice agencies routinely rely on contracted vendors to deliver essential components of patient care and operational support. These services may include:

• Attending physician or hospice medical director services

• Pharmacy services

• Durable medical equipment (DME)

• Laboratory and diagnostic services

• Therapy services (PT, OT, ST)

• Inpatient hospice or continuous care services

• Volunteer services coordination

• Information technology and billing support

Under hospice regulations, the hospice agency retains full responsibility for all care and services provided under contract. Surveyors do not view contracted vendors as separate entities; they view them as extensions of the hospice provider itself. Any failure by a contracted service is therefore treated as a failure of the hospice agency.

Regulatory Expectations Under the Medicare Conditions of Participation

Hospice agencies must comply with the Medicare Conditions of Participation as enforced by Centers for Medicare & Medicaid Services. Contract compliance requirements are embedded across multiple regulatory sections, including governance, clinical oversight, quality assessment, and administrative control.

At a high level, regulators expect hospice agencies to demonstrate:

• Written, executed contracts for all contracted services

• Clear delineation of roles and responsibilities

• Oversight of clinical and non-clinical contracted services

• Integration of contracted staff into hospice policies and procedures

• Ongoing monitoring, evaluation, and performance review

• Documentation that contracted services meet hospice standards of care

Failure to meet any of these expectations can result in condition-level or standard-level deficiencies.

Most Frequent Hospice Survey Citations Related to Contracts

1. Missing or Incomplete Contracts

One of the most common citations involves the absence of a written contract or the use of outdated agreements. Surveyors frequently identify:

• Expired contracts that were never renewed

• Missing signatures or execution dates

• Contracts that fail to specify scope of services

• Lack of termination clauses or compliance language

A contract must be current, fully executed, and readily available during survey. Informal agreements or verbal arrangements are never acceptable.

2. Contracts That Do Not Reflect Hospice-Specific Requirements

Generic vendor contracts often fail to address hospice-specific obligations. Surveyors routinely cite contracts that lack:

• Hospice philosophy and patient-centered care language

• Compliance with hospice Conditions of Participation

• Requirements for timely response to patient needs

• On-call availability expectations

• Documentation and reporting requirements

For example, pharmacy and DME contracts must reflect hospice responsibility for comfort medications, supplies, and timely delivery aligned with patient plans of care.

3. Lack of Oversight and Monitoring of Contracted Services

Surveyors expect hospice agencies to actively oversee all contracted services. Common deficiencies include:

• No evidence of vendor performance evaluations

• No documentation of quality monitoring

• Failure to track response times or service failures

• No corrective actions when issues are identified

Hospice agencies must demonstrate that they evaluate whether contracted services are meeting patient needs and hospice standards, not merely that a contract exists.

4. Contracted Staff Not Integrated Into Hospice Operations

Another frequent citation arises when contracted clinicians or staff function independently of hospice systems. Examples include:

• Contracted nurses not trained on hospice policies

• Vendors unaware of hospice emergency preparedness plans

• Contracted staff not participating in IDG communication

• Inconsistent documentation practices

All contracted personnel involved in patient care must follow hospice policies, participate in care coordination, and document according to hospice standards.

5. Inadequate Credentialing and Competency Validation

Surveyors often find that hospice agencies fail to maintain proper credentialing for contracted staff. Deficiencies may include:

• Missing licenses or expired credentials

• No competency assessments

• Lack of orientation to hospice care principles

• No documentation of ongoing education

Hospice agencies must maintain the same level of credentialing oversight for contracted staff as they do for employed staff.

6. Failure to Retain Ultimate Responsibility for Care

Perhaps the most serious contract-related citation occurs when hospices defer responsibility to vendors. Surveyors cite agencies when:

• Vendors make independent care decisions without hospice oversight

• Care plans are modified without IDG involvement

• Service failures are blamed on vendors

• Patient or family complaints are redirected rather than resolved

Regulators are clear: the hospice agency remains fully accountable for all care provided under contract.

Best Practices for Maintaining Hospice Contract Compliance

Develop a Centralized Contract Management System

Hospice agencies should maintain a centralized repository for all contracts, including:

• Executed agreements

• Renewal and expiration tracking

• Scope of services documentation

• Performance evaluation records

This system ensures survey readiness and prevents last-minute scrambling during inspections.

Standardize Hospice-Specific Contract Language

Every contract should include hospice-specific provisions, such as:

• Compliance with Medicare hospice regulations

• Alignment with hospice policies and procedures

• Participation in quality improvement activities

• Documentation standards

• Confidentiality and HIPAA compliance

• Emergency preparedness coordination

Using standardized contract templates significantly reduces compliance risk.

Implement Routine Vendor Audits and Performance Reviews

Hospice agencies should conduct regular evaluations of contracted services, including:

• Review of response times

• Patient and family feedback

• Incident and complaint tracking

• Documentation audits

• Compliance with care plans

These reviews should be documented and incorporated into the hospice’s Quality Assessment and Performance Improvement (QAPI) program.

Train and Orient All Contracted Staff

Orientation for contracted staff should include:

• Hospice philosophy and goals of care

• Policies and procedures

• Documentation requirements

• Emergency preparedness protocols

• Communication expectations with the IDG

Training should be documented and repeated periodically.

Integrate Contract Oversight Into Governance and QAPI

Hospice leadership and governing bodies must remain actively involved in contract oversight. Surveyors expect to see:

• Governing body awareness of contracted services

• QAPI data related to vendor performance

• Corrective action plans when deficiencies are identified

Contract compliance is not an administrative task alone; it is a governance responsibility.

Preparing for Surveys: A Proactive Compliance Mindset

Survey readiness requires ongoing diligence rather than last-minute preparation. Hospices that perform well during surveys typically:

• Conduct routine mock surveys

• Maintain up-to-date contract binders

• Educate staff on regulatory expectations

• Track trends in survey deficiencies nationally

• Address issues before they escalate

A proactive approach reduces stress, improves care quality, and protects organizational reputation.

The Cost of Non-Compliance

Failure to maintain hospice contract compliance can result in:

• Standard-level or condition-level deficiencies

• Plans of correction

• Payment suspensions or denials

• Civil monetary penalties

• Termination of Medicare certification

Beyond regulatory consequences, non-compliance undermines patient trust and compromises care delivery during some of life’s most vulnerable moments.

Partnering With Experts to Strengthen Compliance

Hospice contract compliance is complex, evolving, and unforgiving of oversight gaps. Many agencies benefit from external expertise to assess vulnerabilities, strengthen systems, and ensure alignment with regulatory expectations.

HealthBridge provides specialized consulting and management solutions for hospice agencies nationwide. Their services include contract audits, mock surveys, regulatory compliance reviews, QAPI program development, and leadership support designed to keep hospices survey-ready and operationally strong. By partnering with experienced consultants, hospice agencies can focus on delivering compassionate care while maintaining confidence in their compliance posture.

References:
https://www.cms.gov/medicare/provider-enrollment-and-certification/hospice-care
https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/som107ap_m_hospice.pdf
https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-418
https://www.cms.gov/medicare/health-safety-standards/certification-compliance
https://www.cms.gov/medicare/quality/hospice
https://www.nhpco.org/hospice-care-overview/hospice-regulations/
https://oig.hhs.gov/compliance/compliance-guidance/
https://www.cdc.gov/infectioncontrol/index.html