Texas Hospice Qlarant Audits: What to Expect and How to Respond

For several years, federal hospice enforcement focused heavily on California, especially Los Angeles County. In 2026, attention expanded to Texas. In April, the Texas Senate Committee on Health and Human Services heard testimony that the number of licensed hospices in Texas had grown from roughly 688 in January 2020 to 1,366 in March 2026. Days later, CMS Administrator Dr. Mehmet Oz said publicly that CMS would examine Texas hospices because of that growth. In May, CMS imposed a nationwide moratorium on new hospice enrollment and listed Texas among the states with heightened oversight of newly enrolled hospices.

Qlarant Integrity Solutions is the Unified Program Integrity Contractor (UPIC) for the Southwestern Jurisdiction, which includes Texas. Attorneys representing Texas hospices have reported that Qlarant has issued payment suspension notices and records requests to Texas hospices in 2026.

This article explains the enforcement context in Texas, the types of Qlarant actions hospices may face, what data patterns appear to draw attention, how to respond to records requests and suspensions, and how to prepare. It is educational and does not replace legal advice. Texas hospices that receive any Qlarant correspondence should engage experienced healthcare counsel immediately.

The Texas Enforcement Context

Rapid Growth

The near doubling of licensed hospices in Texas between 2020 and 2026, reported in state legislative testimony, raised concerns about market saturation and the possible migration of bad actors from California. Federal officials have said publicly that they are watching for fraud schemes moving from California to other states, including Texas, Nevada, and Arizona.

Provisional Period of Enhanced Oversight

In July 2023, CMS announced a Provisional Period of Enhanced Oversight (PPEO) for new hospices in Arizona, California, Nevada, and Texas. Under the PPEO, CMS may conduct medical review of claims from newly enrolled hospices for a period after enrollment. CMS later expanded heightened oversight to Georgia and Ohio. CMS's May 2026 announcement confirmed continued heightened oversight of newly enrolled hospices in Arizona, California, Georgia, Nevada, Ohio, and Texas. Hospices that experienced certain changes of ownership have also been subject to enhanced oversight.

Telehealth Limits

Under the Consolidated Appropriations Act, 2026 and 42 CFR 418.22(a)(4), telehealth may not be used for face-to-face recertification encounters on or after January 31, 2026 if the hospice is subject to enhanced oversight, among other limits. Texas hospices under PPEO should confirm whether they must conduct face-to-face encounters in person.

Nationwide Moratorium

CMS's nationwide hospice enrollment moratorium, effective May 13, 2026, blocks new hospice enrollments and certain changes in majority ownership. CMS can extend it in six-month increments.

What Qlarant Does

As a UPIC, Qlarant performs data analysis, medical review, investigations, site visits, and referrals. For Texas hospices, Qlarant actions may include:

• Records requests for prepayment or postpayment review.

• Payment suspensions based on credible allegations of fraud.

• Site visits and interviews.

• Postpayment reviews that may use statistical sampling and extrapolation.

• Referrals to CMS for revocation or to law enforcement.

Data Patterns That Appear to Draw Attention

Based on CMS's public statements and the FY 2027 hospice final rule, patterns of concern include:

• High live discharge rates, especially combined with long lengths of stay. Attorneys have reported that some 2026 suspension notices referenced live discharge rates over a lookback period, though CMS has not published the specific thresholds used.

• A high share of patients with lengths of stay of 180 days or more.

• Live discharges followed by readmission to the same hospice within seven days.

• High non-hospice Medicare spending during hospice elections.

• Few skilled visits in the last days of life.

• New enrollment, changes of ownership, or rapid census growth.

• Shared addresses, owners, or administrators with other hospices.

• Patients who were unaware they were enrolled in hospice.

CMS's Service and Spending Variation Index, which publishes provider-level scores, includes several of these measures. Texas hospices should review their own scores.

The Types of Qlarant Correspondence

Texas hospices may receive several types of Qlarant correspondence. Each requires a different response.

Records Requests for Prepayment Review

Claims are held until Qlarant reviews records. Responses should be complete and timely to restore cash flow.

Records Requests for Postpayment Review

Qlarant reviews claims that were already paid. Findings may result in overpayment determinations, sometimes extrapolated.

Payment Suspension Notices

Payments are withheld. The notice typically requests a rebuttal within 15 days and may be accompanied by records requests.

Site Visit Notices or Unannounced Visits

Qlarant or other contractors verify that the hospice is operational and may interview staff.

Requests for Information Beyond Medical Records

Requests for policies, contracts, staff lists, or financial information may signal an investigation and require counsel's involvement.

Responding to a Qlarant Records Request

Read the Request Carefully

Identify whether the review is prepayment or postpayment, which claims are involved, what records are requested, and the deadline. UPIC records requests generally allow 30 days, but check each request.

Assemble Complete Records

Include the election statement and addendum, certifications and narratives, face-to-face encounters and attestations, the plan of care, interdisciplinary group notes, visit notes from all disciplines, physician orders, medication records, level of care documentation, discharge and revocation records, and signature logs.

Review Before Submitting

Check each packet for completeness and compliance with election and certification requirements. Never alter or backdate documents.

Submit on Time and Keep Proof

Use the method Qlarant specifies and keep a complete copy.

Involve Counsel

Because UPIC reviews can lead to suspensions, revocations, or referrals, counsel should be involved from the start.

Responding to a Payment Suspension

Key Rules

Under 42 CFR 405.371, payments may be suspended based on credible allegations of fraud. Notice may be concurrent with the suspension. The notice typically requests a rebuttal within 15 days, and under 42 CFR 405.375 the contractor considers the rebuttal and makes a determination that is not appealable through the Medicare administrative appeals process. Fraud-based suspensions may continue until resolution, with CMS reviewing at least every 180 days and an 18-month limit subject to exceptions.

Records Requests With Suspensions

Attorneys have reported that some suspension notices are accompanied by requests for documentation related to reopening previously paid claims. Hospices should calendar every deadline in the notice.

Rebuttal Strategy

• Engage counsel the day the notice arrives.

• Preserve all records.

• Address each stated basis with specific evidence.

• Explain live discharge and length of stay patterns with clinical facts, such as patient diagnoses and documented improvement before discharge.

• Show operational legitimacy: location, staff, licensure, accreditation, interdisciplinary group activity, and patient care records.

• Explain referral sources and physician relationships.

• Argue good cause based on beneficiary access where appropriate, and propose alternatives such as prepayment review.

• Submit an accurate, organized rebuttal by the deadline.

Texas Licensing Considerations

Texas hospices are licensed by the Texas Health and Human Services Commission as home and community support services agencies with hospice services. State licensing standards, surveys, and complaint investigations operate alongside federal Medicare requirements. Texas hospices should:

• Keep state license information consistent with Medicare enrollment information.

• Prepare for state surveys and complaint investigations.

• Report changes in ownership, administrators, and locations as required by state rules.

• Monitor state legislative and regulatory developments, especially following the 2026 Senate committee testimony.

Preparing Before Qlarant Contacts You

Know Your Data

• Calculate live discharge rates by type: revocations, no longer terminally ill, moves, and transfers.

• Calculate the share of patients with stays over 180 days.

• Track readmissions within seven days.

• Review your published SSVI scores and PEPPER data.

Audit High-Risk Patients

• Review long-stay patients for continued eligibility.

• Review recent live discharges for proper documentation and reasons.

• Review revocations to confirm they were the patient's choice.

Strengthen Admissions

• Require physician review of eligibility before admission.

• Verify that patients and families understand hospice and the election.

• Watch for referrals from sources with unusual patterns.

• Never pay for referrals or use recruiters.

Check Enrollment and Ownership Records

• Keep PECOS information current.

• Make sure ownership and managing employee information matches state licensing records.

• Screen owners, staff, and physicians against exclusion lists.

Prepare for Site Visits

• Keep the office open and staffed during posted hours.

• Train staff on how to respond to site visitors.

• Keep records accessible.

Prepare a Response Plan

• Identify counsel.

• Designate an internal response team.

• Prepare a document preservation process.

• Maintain cash reserves where possible.

Responding to a Site Visit

UPICs and CMS contractors may conduct unannounced site visits to verify that a hospice is operational. Texas hospices should:

• Keep the office open and staffed during posted hours.

• Verify the visitor's identity and organization.

• Notify the administrator, compliance officer, and counsel.

• Provide requested records within the scope of the visit.

• Document the visit, including names, questions, and documents provided.

• Be honest and accurate in all responses.

A site visit finding that a hospice is not operational can lead to revocation, so readiness matters.

Interviews of Staff and Beneficiaries

UPICs may interview staff, patients, and families. Hospices should:

• Inform staff, through counsel, that they may be contacted and of their rights.

• Never discourage staff or patients from cooperating with investigators.

• Never coach witnesses or provide scripted answers.

• Make sure patients and families understand hospice care and their election, which reduces the risk that a patient tells an investigator they did not know they were in hospice.

Postpayment Reviews and Extrapolation

Qlarant may conduct postpayment reviews of past claims and use statistical sampling to estimate overpayments. If a Texas hospice receives an extrapolated overpayment:

• Request the sampling methodology and data.

• Consider engaging a statistician.

• File timely appeals, including redeterminations within 30 days of the demand letter to limit recoupment under 42 CFR 405.379.

• Submit all evidence by the reconsideration level.

Medicaid in Texas

Many Texas hospice patients are dually eligible for Medicare and Medicaid. Federal Medicaid rules at 42 CFR 455.23 require state Medicaid agencies to suspend payments when there is a pending investigation of a credible allegation of fraud, unless good cause exists. Texas hospices should expect that Medicare enforcement actions may be shared with state agencies and should keep Medicaid enrollment information consistent with Medicare and state licensing records.

Building a Texas Hospice Compliance Dashboard

A simple monthly dashboard can help leadership track the measures regulators watch:

• Live discharge rate by type.

• Share of patients with stays over 180 days.

• Readmissions within seven days.

• Average and median length of stay.

• Visits in the last days of life.

• General inpatient and continuous home care use.

• Top referral sources and their share of admissions.

• Audit results for certifications and narratives.

Live Discharges in Texas: Getting It Right

Because live discharge rates appear to be a focus, Texas hospices should make sure every live discharge is:

• Based on a clinical determination that the patient is no longer terminally ill, or on the patient's choice to revoke, a move, a transfer, or a for-cause reason.

• Supported by a physician discharge order from an authorized physician, with consultation of the attending physician when involved.

• Accompanied by required beneficiary notices and discharge planning.

• Documented with clinical findings, such as improvement or stabilization.

• Not timed to avoid costly care or manage the aggregate cap.

High live discharge rates combined with long stays can suggest that patients were not eligible when admitted. Strong admission practices are the best way to reduce both.

A Hypothetical Example

A Houston-area hospice that has operated for eight years receives a Qlarant payment suspension notice citing its live discharge rate. Counsel is engaged immediately. An internal analysis shows that the hospice's live discharge rate rose after it began serving several assisted living facilities, and that many discharged patients had dementia with stable weights and function. Some revocations occurred shortly before hospitalizations.

In its rebuttal, the hospice provides operational evidence, explains its patient population, provides records for the cited claims, and describes corrective actions: stronger admission review, interdisciplinary review before every live discharge, staff education that revocation is solely the patient's choice, and a long-stay audit. It argues that a full suspension would harm access for its current patients and proposes prepayment review. Counsel also advises on whether earlier periods for discharged patients created overpayment obligations.

Admission Practices That Reduce Risk

Many risk indicators, such as high live discharge rates and long stays, begin with admissions. Texas hospices can reduce risk by:

• Requiring a hospice physician to review clinical information before every admission.

• Documenting measurable indicators of terminal prognosis at admission.

• Avoiding admissions based on marketing or referral pressure.

• Confirming that the patient and family understand hospice and want it.

• Verifying that the attending physician has a real treatment relationship with the patient.

• Reviewing referral sources for unusual patterns, such as many referrals from one source with patients who later stabilize.

Ownership Changes and New Hospices in Texas

Texas hospices that are new, recently acquired, or planning a transaction face additional risk:

• New hospices may be subject to enhanced oversight, including medical review and limits on telehealth face-to-face encounters.

• The nationwide moratorium blocks new enrollments and certain changes in majority ownership.

• The Medicare 36-month rule may require new enrollment after a change in majority ownership.

• Buyers that accept assignment of a provider agreement may inherit overpayment liability.

Any Texas hospice transaction should include thorough due diligence on live discharge rates, length of stay, audit history, and affiliations.

Working With Physicians and Medical Directors

• Make sure the hospice medical director and physician members of the interdisciplinary group actively review eligibility.

• Provide physicians with measurable clinical data before certifications and recertifications.

• Confirm that all certifying physicians are enrolled in Medicare or validly opted out.

• Make sure any physician compensation arrangements comply with the Anti-Kickback Statute and physician self-referral law.

A Qlarant Readiness Checklist for Texas Hospices

• PECOS and state license information match and are current.

• Owners, staff, and physicians screened against exclusion lists.

• Live discharge and long-stay data reviewed monthly.

• Long-stay patients audited for eligibility.

• Live discharges and revocations audited for documentation and patient choice.

• Admission eligibility review in place.

• Face-to-face encounters scheduled in person if under enhanced oversight.

• Site visit procedures trained.

• Counsel identified and a response plan in place.

• Cash reserves available.

Questions Texas Hospice Leaders Should Ask

• What is our live discharge rate, and how does it compare with peers?

• What share of our patients have been on service more than 180 days?

• Are any of our revocations initiated by staff rather than patients?

• Are we subject to enhanced oversight?

• Do our state license and Medicare enrollment records match?

• Do we have counsel and a response plan ready?

Common Mistakes Texas Hospices Make

• Assuming enforcement will stay focused on California.

• Ignoring live discharge and long-stay data.

• Using telehealth for face-to-face encounters while under enhanced oversight.

• Responding to Qlarant without counsel.

• Missing rebuttal or records deadlines.

• Allowing state and federal records to drift out of alignment.

Staying Focused on Patients

Even under intense scrutiny, the hospice's mission is to serve terminally ill patients and their families. Accurate eligibility decisions, honest documentation, and respect for patient choice are both good care and the best defense.

Key Takeaways

• Texas is now a focus of federal hospice enforcement.

• Qlarant is the Southwestern UPIC and may issue records requests, suspensions, and site visits.

• Live discharge rates and long stays are prominent risk indicators.

• Enhanced oversight limits telehealth for face-to-face encounters.

• Preparation, accurate records, and early counsel involvement are essential.

Frequently Asked Questions

Who is Qlarant?

Qlarant Integrity Solutions is the UPIC for the Southwestern Jurisdiction, which includes Texas, and the Western Jurisdiction, which includes California.

Why are Texas hospices being targeted?

Federal officials have pointed to the rapid growth in Texas hospices since 2020 and concerns that fraudulent operators are moving from California.

What is the PPEO?

A Provisional Period of Enhanced Oversight under which CMS may review claims from newly enrolled hospices. Texas has been included since July 2023.

How long do we have to respond to a Qlarant suspension?

The notice typically requests a rebuttal within 15 days. Records requests generally have their own deadlines, often 30 days.

Can we use telehealth for face-to-face encounters?

Telehealth is allowed through December 31, 2027 for recertification encounters, but not if the hospice is subject to enhanced oversight or other statutory limits apply.

Conclusion

Texas hospices are entering the same enforcement environment that California hospices have faced, with Qlarant as the front-line program integrity contractor. Live discharge rates, long stays, new enrollments, ownership changes, and rapid growth are visible risk indicators. Hospices that know their data, audit long-stay patients and live discharges, strengthen admissions, keep enrollment records accurate, prepare for site visits, and have counsel and a response plan ready will be best positioned to respond to Qlarant reviews and suspensions.

How HealthBridge Can Help

HealthBridge is a healthcare management consulting firm that helps Texas hospices prepare for and respond to Qlarant reviews through data analysis, long-stay and live discharge audits, ADR packet preparation, admission process reviews, and support for counsel during suspensions. If your Texas hospice wants to prepare or needs help responding, please get in touch with us. We will be happy to help you with this topic.

References

• Centers for Medicare & Medicaid Services. CMS Announces Aggressive Nationwide Crackdown on Fraud with Six-Month Hospice and Home Health Agency Enrollment Moratoria (May 13, 2026). https://www.cms.gov/newsroom/press-releases/cms-announces-aggressive-nationwide-crackdown-fraud-six-month-hospice-home-health-agency-enrollment

• Centers for Medicare & Medicaid Services. Provisional Period of Enhanced Oversight for New Hospices in Arizona, California, Nevada, and Texas (MLN7867599). https://www.cms.gov/files/document/mln7867599-period-enhanced-oversight-new-hospices-arizona-california-nevada-texas.pdf

• 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. Medicare Program Integrity Manual, Chapter 4, Program Integrity. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c04.pdf

• Centers for Medicare & Medicaid Services. Medicare Program Integrity Manual, Chapter 8, Section 8.3, Suspension of Payment. https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/pim83c08.pdf

• Electronic Code of Federal Regulations. 42 CFR 405.371, Suspension, Offset, and Recoupment of Medicare Payments. https://www.ecfr.gov/current/title-42/section-405.371

• Electronic Code of Federal Regulations. 42 CFR 405.375, Time Limits for, and Notification of, Administrative Determination After Receipt of Rebuttal Statement. https://www.ecfr.gov/current/title-42/section-405.375

• Electronic Code of Federal Regulations. 42 CFR Part 418, Subpart B (including 418.22 and 418.26). https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-418/subpart-B

• 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

• Texas Health and Human Services Commission. Home and Community Support Services Agencies. https://www.hhs.texas.gov/providers/long-term-care-providers/home-community-support-services-agencies-hcssa