Hospice Fraud Investigation: Who Investigates and What Gets Missed?

A hospice fraud investigation can involve the Centers for Medicare & Medicaid Services and its contractors, the Department of Health and Human Services’ Office of Inspector General, the Department of Justice and state Medicaid fraud units. A whistleblower case can bring the conduct inside a hospice to the government’s attention. State survey agencies and private accreditors inspect the care. Someone inside it may know why the chart changed before a survey, why a patient stayed enrolled after a physician recommended discharge, or why a medical director’s payment rose with referrals. Those connections can explain hospice fraud that a finished claim or a survey report leaves out.

Are CMS and DOJ Investigating Hospice Fraud?

Yes. The Centers for Medicare & Medicaid Services oversees Medicare enrollment, payment and care requirements, while the Department of Justice pursues civil False Claims Act cases over false government billing. The HHS Office of Inspector General audits the program, investigates suspected fraud and can exclude providers from federal healthcare programs. State Medicaid fraud units handle the Medicaid side and investigate patient abuse or neglect.

The work can overlap. A payment review may lead to a referral for further investigation. An employee’s account may connect a claim to instructions from management. A civil settlement can sit alongside an agreement with the inspector general governing the provider’s future conduct.

What the Patient Record Has to Explain

The patient record connects the hospice’s payment to the care and clinical judgment behind it. Medicare pays routine home care by the enrolled day, including days without a visit. Costs tend to be highest around admission and death, leaving a less expensive stretch between them. The financial incentive reaches admissions, staffing and discharge decisions.

Eligibility and recertification turn on the patient’s condition and the information supporting the physician’s certification. The benefit requires a prognosis of six months or less if the illness runs its normal course. Investigators examining an allegedly false certification need to understand what the physician received, what staff observed and whether anyone changed the account of the patient’s condition.

Billing for a higher level of care adds another comparison: the patient’s needs, the care delivered and the level claimed. Payments for referrals bring compensation agreements and patient referrals into the same picture.

The 2026 working paper Quality, Reputation, and Reimbursement Design in the Hospice Industry, from Kansas State University, models competition among California hospices. Its findings connect visit quality, reputation and payment incentives:

Daily revenue and the work delivered can move differently. The clinical and staffing records put the care back into the payment picture.

The Medicare agency identifies long stays, hospices sharing a location and high rates of discharge alive among the patterns drawing its scrutiny. The next comparison reaches the patients and the business: the clinical basis for continued enrollment, the services delivered and who actually operates the hospice.

State Surveys and Accreditation: Who Inspects the Care?

State survey agencies and approved accrediting organizations inspect hospice care against Medicare’s requirements. The Centers for Medicare & Medicaid Services sets those requirements. A hospice can choose private accreditation and pay the organization conducting its survey.

The HHS Office of Inspector General’s report Hospice Deficiencies Pose Risks to Medicare Beneficiaries, published in July 2019, describes the work behind a survey. Surveyors review clinical records, observe operations, visit patients and interview patients and staff. They can also investigate complaints.

The most urgent findings concern failures that have caused, or are likely to cause, serious harm to patients.

The hospice must submit a plan explaining how it will correct the deficiencies and keep them corrected. The survey agency or accreditor decides when the deficiencies are resolved. That process gives an insider several distinct records: what the survey found, what the hospice promised and what happened afterward.

The inspector general found poor care planning, mismanaged aide services and inadequate patient assessments among the common deficiencies. The patients who depend on hospice bear the harm when the care falls short. Taxpayers bear the cost when the government pays false claims.

Who Checks the Accreditors?

The Medicare agency approves the accrediting organizations and compares their findings with state survey results. The Government Accountability Office’s 2024 review of hospice oversight reported a 20 percent disparity rate between accreditor and state survey findings in fiscal 2020. The paid inspectors and the state surveyors did not always find the same problems.

The Government Accountability Office also recorded the Medicare agency’s acknowledgment of a conflict it had historically allowed:

The Medicare agency proposed restrictions on those consulting arrangements.

For an insider, the survey preparation matters alongside the result. Who selected the records, who changed them and what the surveyors received can explain the difference between the hospice the staff knew and the one presented for inspection.

Medicare Contractors Follow the Claim

Medicare Administrative Contractors process claims and perform payment review. Program-integrity contractors examine suspicious billing patterns and referrals. Those functions can connect a paid claim to a request for the underlying medical records and then to a wider investigation.

The Congressional Research Service’s 2011 account of Medicare payment review describes review before or after payment, requests for medical records and referrals of suspected fraud to the inspector general.

The Medicare agency’s February 2026 enhanced-oversight fact sheet describes medical review, including prepayment review, for newly enrolling hospices in designated states. The agency says it may review all claims during that oversight period and may deny claims or revoke enrollment when a hospice fails to respond to requests.

In a 2018 amended complaint against Heartland Hospice, a whistleblower alleged that management withheld documentation because accepting denial of a monthly claim would keep reviewers from seeing eligibility problems in earlier months. The allegation connects the requested record, the withheld response and the older payments that management allegedly wanted to protect.

OIG Examines Providers and the Oversight System

The HHS Office of Inspector General investigates providers, audits their Medicare payments and evaluates how hospice oversight works.

Its deficiency report brought together state and accreditor survey findings and recommended stronger oversight of hospices with serious problems.

The inspector general can bar a provider from federal health care programs, impose financial penalties and require changes in how the business operates through an agreement accompanying a civil settlement.

The Government Accountability Office examines the government’s oversight as well. Its hospice reports have tested whether the Medicare agency has the authority it needs, whether surveys happen on time and whether it uses its enforcement tools.

DOJ Pursues the False Claims Act Case

The Justice Department’s Civil Division and U.S. Attorneys’ offices pursue False Claims Act cases involving hospice billing. A whistleblower can bring a qui tam case on the government’s behalf, and the government can join it. The case connects the claims to the conduct and knowledge inside the business.

In its 2014 civil complaint announcement concerning Creekside Hospice, the Department of Justice alleged that staff were discouraged from documenting patient improvements, records were changed after claims had been submitted, and physician visits were made to appear to have occurred. The alleged manipulation concerned what Medicare would see and what it had already paid.

That is where an insider’s account becomes valuable: who requested the change, what the original note said and how the revised record supported continued billing. We work with you to connect those decisions to a civil whistleblower case. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

What Triggers a Medicaid Fraud Investigation?

External referrals and a unit’s own data analysis can trigger review for a Medicaid fraud investigation. State Medicaid Fraud Control Units assess the information and decide whether to investigate. A unit is separate from the state Medicaid agency, which can send it referrals. The units investigate Medicaid provider fraud and patient abuse or neglect, and can coordinate with the inspector general and other federal and state agencies.

The HHS Office of Inspector General’s Medicaid Fraud Control Units Fiscal Year 2023 Annual Report, published in March 2024, describes that referral process and the units’ civil settlements and judgments.

The Medicare and Medicaid claims can meet in the same civil case. In August 2020, MJHS Hospice settled allegations over higher levels of care. The case began with a whistleblower, and the federal and New York governments joined part of it. The alleged billing included unsupported continuous home care for Medicare and Medicaid patients and unsupported general inpatient care for Medicare patients.

The settlement required $4,850,000 to the United States and $375,000 to New York. The alleged overbilling reached Medicare and New York’s Medicaid program, putting both federal and state healthcare funds at stake.

Where Hospice Oversight Falls Short

Government reports show hospices waiting past their survey deadlines, new enforcement tools used sparingly and a special oversight program stopped after it was finalized.

Surveys Can Be Years Overdue

The standard survey interval moved from seven years to three in 2015. Yet the Government Accountability Office found that 325 of 3,284 hospices enrolled for more than three years were overdue for a survey at the end of May 2023. Among the overdue hospices, 33 had gone more than six years without one.

The review found that the Medicare agency had given no direction on prioritizing overdue surveys. Much of the early work cleared hospices overdue by the shortest time. The system could reduce its backlog while leaving the longest gaps open.

Congress Added Remedies, but CMS Barely Used Them

The Medicare agency once had only one survey enforcement remedy for hospices: ending their participation in Medicare. The Government Accountability Office described that limitation in its 2019 hospice oversight report. Congress subsequently authorized additional remedies through the Consolidated Appropriations Act, 2021, including civil money penalties, payment suspensions for new admissions and temporary management.

The Government Accountability Office found 981 hospices with at least one serious quality deficiency between 2017 and 2022. By January 2024, the Medicare agency told the reviewers it had used the additional enforcement tools only three times: two payment suspensions and one civil monetary penalty. Congress had supplied alternatives to shutting a hospice out of Medicare. The agency had barely used them.

The Special Focus Program Stopped

The Hospice Special Focus Program was finalized in November 2023. The Medicare agency’s posted program notice says implementation for calendar 2025 ceased effective February 14, 2025, while the agency evaluated the program further.

The program’s regulation stayed on the books.

Enrollment Controls Took a Different Path

The Medicare agency expanded claims review while Special Focus implementation stopped. By December 2025, its enhanced oversight covered Arizona, California, Nevada, Texas, Georgia and Ohio, with prepayment review also extended to existing hospices.

In its January 2026 Hospice Fast Facts, the agency reported that 817 hospices had undergone medical review through December 2025 and that it had revoked 181 enrollments. The same document describes site visits checking operational status, ownership, staffing and medical records.

The Centers for Medicare & Medicaid Services then imposed a six-month nationwide moratorium on new Medicare hospice enrollment, effective May 13, 2026. It covered new hospices and new practice locations, with an exception for applications received before the effective date. These measures address entry into Medicare and payment review. The survey backlog concerns oversight of the care already being delivered.

What an Insider Can Connect

An insider can connect the patient record before review with the version an agency received. The complaint against Care Alternatives alleged that missing records were recreated and that a consultant preparing for a state audit or accreditation review directed staff to rewrite them:

The same complaint alleged that an administrator dismissed concerns about an ineligible admission because a surveyor would not look that far back. That allegation and the Heartland allegations expose the same question: what earlier care and payments did the reviewer never get to examine?

For hospice employees who know how the records were prepared, the valuable connection may be an original assessment and its replacement, a request for records and the instruction answering it, or a discharge recommendation and the billing that continued. Marketing and finance staff may see the referral list alongside the compensation formula. We bring those parts together with you so the case explains both the claim and the decision behind it.

When You Know What the Review Missed

If you know how a hospice kept its original patient records, billing decisions or referral payments out of an outside review, speak with our whistleblower experts about what happened inside the business. We build the case with you and bring in hospice fraud whistleblower lawyers who understand clinical records and Medicare payment disputes. We stay beside you from the first assessment through the case.