OIG Sharpens Its Focus on Hospice and Home Health: What Providers Need to Know Now

Key Takeaways

• OIG is intensifying Medicare oversight of hospice and home health providers. Expanded audits and Work Plan reviews increase exposure to payment recoupments, claim denials, and operational disruption.
• Hospice eligibility and home health billing practices face targeted scrutiny. Providers should prioritize documentation supporting terminal prognosis, nursing facility arrangements, and Patient-Driven Groupings Model (“PDGM”) reimbursement.
• OIG’s compliance priorities create immediate governance obligations for provider leadership. Executives should strengthen internal audits, referral relationship oversight, and compliance programs ahead of forthcoming hospice-specific guidance.

The U.S. Department of Health and Human Services Office of Inspector General (“OIG”) is bringing new energy to its oversight of hospice and home health. Over the past several months, OIG has issued a string of audits alleging significant Medicare overpayments, added new hospice and home health projects to its Work Plan, and continued rolling out its modernized compliance guidance, including an industry-specific guidance document for hospices that is now in development. Taken together, these efforts indicate that hospice and home health providers should expect closer scrutiny and should use this window to test the effectiveness of their compliance programs. Moreover, at a recent national home health and hospice conference, OIG representatives shared their compliance recommendations stemming from these initiatives.

OIG Hospice Enforcement Priorities: Eligibility, Nursing Facility Arrangements, and Enrollment

Medicare Hospice Eligibility Audits Target Documentation for New Admissions

In June 2026, OIG reported that Medicare could have saved $255.1 million related to hospice services for certain new hospice enrollees (A-06-22-09003). Of the 100 initial certification periods OIG reviewed for fiscal year 2021, the OIG alleged that documentation for 45 did not meet Medicare hospice requirements. The OIG focused on enrollees with no inpatient or emergency room claims in the 18 months before electing hospice and recommended that Centers for Medicare and Medicaid Services (“CMS”) work with the hospice Medicare Administrative Contractors (“MACs”) to treat this population as a high-risk area, potentially through pre- or post-payment review. CMS concurred. Hospices should expect MAC review activity in this area and should ensure that the terminal prognosis for every new admission, particularly patients without a recent acute-care history, is clearly supported in the clinical record.

OIG Hospice Compliance Audits Identify Medicare Overpayments

OIG’s series of hospice provider compliance audits continues. In July 2026, OIG alleged that Hospice of the Valley – West received at least $8.6 million in Medicare overpayments (A-09-23-03004), with 15 of 100 sampled claims failing Medicare requirements. OIG uses data mining and analytics to select hospices that appear at risk of noncompliance, and providers should assume that size offers no protection. OIG is actively using data and artificial intelligence tools to identify outliers, and enforcement priorities favor pursuing fraud wherever it is found.

OIG Scrutinizes Hospice Payments and Arrangements in Nursing Facilities

The relationship between hospices and nursing facilities remains a long-standing OIG concern, dating back to OIG’s 1998 Special Fraud Alert on nursing home arrangements with hospices. In July 2026, OIG announced a new Work Plan project, Savings in Medicare Hospice Payments for Care Provided in Nursing Homes (OEI-02-26-00180). The OIG asserts that the routine home care rate includes personal care services that nursing homes are already required to provide, a payment structure OIG says can add to the incentives bad actors have to exploit the program. The review will also examine practices of hospices with a high percentage of patients in nursing homes.

Hospices that serve nursing home residents should review OIG’s Nursing Facility Industry-Specific Compliance Program Guidance (November 2024). Understanding the nursing facility’s own resident care, service, and financial obligations helps hospices anticipate the risks on the other side of the arrangement and avoid arrangements that improperly change costs or responsibilities.

New Hospice Providers Face Medicare Enrollment and Payment Scrutiny

The OIG has an active Work Plan project examining trends and patterns in data related to newly enrolled hospice providers (OAS-25-09-034), intended to identify vulnerabilities in new hospice enrollments. This follows CMS’ suspension of payments to nearly 450 Los Angeles-area hospices based on what it says are credible allegations of fraud. The OIG has also continued a series of audits of state Medicaid hospice cap calculations, including an assertion that Texas did not calculate or collect $10.5 million in hospice cap overpayments owed by 174 hospices, and has reported that Medicare improperly paid acute-care hospitals an estimated $190 million for outpatient services to hospice enrollees that should have been covered under the hospice per diem.

OIG Developing New Hospice Industry-Specific Compliance Guidance

As part of its guidance modernization initiative, the OIG is replacing its Federal Register-era compliance program guidance with web-based, more easily updated documents. The foundation is the General Compliance Program Guidance (“GCPG”) (November 2023), supplemented by industry-specific guidance (“ICPGs”). To date, OIG has issued ICPGs for nursing facilities and Medicare Advantage. A hospice ICPG is under active development, and the information-gathering phase, which has included outreach to industry groups, is nearing completion. Publication is anticipated in the relatively near future. Until then, OIG’s 1999 Compliance Program Guidance for Hospices remains a useful resource, and existing guidance will stay available on OIG’s Compliance Guidance page after new ICPGs are issued.

OIG Home Health Enforcement Priorities: Medicare Billing, PDGM Coding, and Referrals

The OIG’s nationwide series of home health provider compliance audits continues to produce findings. In August 2026, OIG’s audit of Deistic Home Health Care, Inc. (A-05-24-00007) alleged that 37 of 100 sampled claims were billed incorrectly, primarily for billing and coding errors and face-to-face encounter deficiencies, because the agency purportedly did not always review medical record documentation before billing. OIG noted that CMS’ 2023 improper payment rate for home health claims was 7.7%, or about $1.2 billion.

The OIG’s Work Plan also reflects targeted attention to PDGM payment drivers. A nationwide audit of home health claims billed with an institutional admission source (OAS-26-05-056) will test claims coded with occurrence codes 61 or 62, which yield higher reimbursement. Prior OIG audits found agencies reported institutional admissions based on emergency room visits or observation stays that do not qualify as inpatient stays. OIG has also announced work on home health comorbidity adjustments and outlier payments triggered by excessive visit units.

On the referral side, OIG issued an unfavorable advisory opinion (AO 26-15) in June 2026 regarding a home health agency’s payments to a vendor for online referral management software, a reminder that technology and marketing arrangements that touch referrals receive the same Anti-Kickback Statute scrutiny as traditional arrangements. OIG’s criminal enforcement work in home health also remains active, as reflected in its Spring 2025 Semiannual Report to Congress.

Key OIG Compliance Expectations for Hospice and Home Health Providers

The GCPG and OIG’s current enforcement posture point to several themes that are especially relevant to hospice and home health organizations:

• Independent, empowered compliance leadership. OIG favors a compliance officer whose primary focus is compliance, who is structurally independent from legal, finance, and operations, and who meets regularly in executive session with the board. Smaller, single-location providers may use a part-time compliance lead who is removed from day-to-day operations and coding.
• Quality as a compliance issue. OIG treats quality of care and patient safety as core compliance concerns. Quality leaders should sit on the compliance committee, and both functions should report to the board. Billing for substandard care remains a False Claims Act theory.
• Incentives that reward compliance. Compensation and performance metrics based solely on speed or volume, such as admissions or visits, can encourage poor documentation and cutting corners.
• Following the money. Organizations should track every financial arrangement with referral sources, including medical directors and nursing facilities, conduct fair market value and legal review before signing, monitor performance, and reassess at renewal rather than relying on automatic renewals. There is no dollar threshold below which Anti-Kickback Statute risk disappears, and safe harbor protection requires meeting every element.
• Exclusion screening and overpayments. Routinely screen staff and contractors against OIG’s List of Excluded Individuals/Entities, and promptly evaluate and repay identified overpayments, considering OIG’s Health Care Fraud Self-Disclosure Protocol where appropriate.
• Meaningful risk assessments. OIG expects thoughtful, documented risk assessments rather than check-the-box exercises.
• Artificial intelligence and new entrants. Compliance should have a defined role in AI governance, including how the organization, its EHR vendor, and its partners use AI. Due diligence on private equity investors, startups, and nontraditional vendors should confirm that they understand federal health care program requirements.

What Hospice and Home Health Providers Should Do Now

Hospice and home health providers should consider the following:

1. Auditing eligibility documentation for recent admissions, particularly patients without recent hospital utilization;
2. Reviewing nursing facility agreements and services in light of the new OIG review;
3. Testing PDGM coding, including admission source and comorbidity coding, against medical records;
4. Inventorying and re-validating referral source arrangements, including technology and marketing vendors; and
5. Benchmarking their compliance programs against the GCPG now so they are prepared when the hospice ICPG is issued.

The OIG continues to invite public feedback on its compliance guidance, and providers can monitor new releases through OIG’s What’s New page and Work Plan.

If you have questions about these developments or would like assistance evaluating your organization’s compliance program, please contact AGG Post-Acute & Long-Term Care co-chair Jason Bring.