CMS Utilizing Enhanced Oversight of Hospice Providers to Reduce Fraud Waste and Abuse

May 2026
By: Rolf Lowe, Wachler & Associates, PC

In 2023, the Centers for Medicare and Medicaid Services (CMS) introduced a new enforcement tool, Provisional Period of Enhanced Oversight (PPEO), specifically aimed at newly enrolled hospice providers. PPEO was implemented under the Social Security Act and is intended to apply enhanced oversight to new providers in high-risk categories. The PPEO program was developed due to CMS’ concerns about program integrity in the hospice program including potential fraud (criminal and civil), improper claim submissions and delivery of services that do not meet Medicare’s requirements for medically reasonable and necessary services.

The PPEO program was initially rolled out in Arizona, California, Nevada and Texas on September 17, 2024. Georgia and Ohio were added to the program beginning on December 30, 2025. Further expansion of the program into other states in the future is anticipated.

While the PPEO program is geared at newly enrolled providers, in some instances it may also apply to existing providers reporting a change of ownership as required by CMS’ conditions of participation. The PPEO process involves Pre-Payment Review (PPR) of selected providers, with the effective date of the PPEO beginning on the date a provider submits it first claim to Medicare Administrative Contractor (MAC). Providers selected for PPR will receive a letter notifying them they have been selected, which will include the notice of the review and the claims selected for review. Failure to respond to the notice may result in the denial of claims or revocation of Medicare enrollment. CMS, in its February 2026 Medicare Learning Network Fact Sheet, indicated providers in other states may be subject to PPR if aberrant billing behaviors are identified.¹

The primary focus of PPEO is beneficiary eligibility for services. CMS and its contractors will be reviewing services to ensure documentation clearly supports a terminal prognosis, progression of the disease, continued clinical decline, a patient centered and appropriate care plan , compliance with the Medicare Online Provider Manual and Policies, the  Medicare Program Integrity Manual (MPIM) and other applicable Medicare coverage requirements. Some of these requirements include, but are not limited to, documented face to face encounters, certifications and recertifications and measurable clinical evidence supporting continued hospice services for palliative care.

While the PPEO process is currently geared at Medicare’s hospice program, it is foreseeable that it will be introduced to other high -risk programs and other types of providers, who are already subject to other audit activity, including, Targeted Probe and Educate  (TPE), Unified Program Integrity Contractor (UPIC) and Supplemental Medical Review Contractor (SMRC) audits.

While hospice providers who fail the PPEO process are subject to revocation of their Medicare enrolment, failing the initial review in any of CMS’ audit programs can lead to further scrutiny, such as expanded audits, statistical sampling overpayment estimation audits, payment suspensions and revocation of Medicare enrolment and billing privileges.  These actions can have an immediate impact on providers, particularly those who do not have a diversified payer mix. Providers subject to additional scrutiny can see a disruption in their receivables, an increase in their administrative resources for gathering and preparing documentation, not to mention the time and expenses that may be associated with appealing identified overpayments, or other administrative actions CMS may pursue.

As with any payer reimbursed service that may be subject to an audit, providers who may be subject to PPEO and the PPR process need to ensure they have complete documentation in the patient’s medical records, since the audits are primarily conducted as desk reviews. Incomplete documentation may delay payments and trigger additional scrutiny from CMS and its contractors. Providers should treat every encounter as though it may be subject to review, making sure the clinical documentation clearly supports the services provided and that regulatory requirements are met. Provider staff should have standardized clinical documentation expectations, and there should be an internal review process ensuring both the clinical records and accompanying claims are compliant with the Medicare requirements.

Providers should also consider adopting a plan to deal with the prospect of an additional documentation request (ADR), treating it as a “when” and not “if” scenario. Being prepared ahead of time for an ADR will minimize its impact on day-to-day operations, allowing staff to have a clear plan for the response, as well as identifying any outside clinical and compliance professionals that may be able to be brought in and assist in the review process early on.

For additional information on CMS’ PPEO process  for hospice providers please contact Rolf Lowe of Wachler & Associates at (248) 544-0888. 

1. Center for Medicare and Medicaid Services Medicare Learning Network Fact Sheet MLN7215293 February 2026. ↩︎