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Volume 23.13

We have been continuously reporting on the numerous hospice provider integrity measures being considered.

CMS is now proposing as part of the Calendar Year (CY) 2024 Home Health (HH) Prospective Payment System Rate Update numerous hospice integrity measures including the following:

  • Recategorize initially enrolling hospices and those hospices submitting Medicare enrollment updates to report any new owner into the “high” level of categorical screening.
  • Categorize hospices completing revalidation to “moderate” risk level screening.
  • Require all hospice owners with five percent (5%) or greater direct or indirect ownership to submit fingerprints for a criminal background check.
  • Subject hospices to the thirty-six (36) month rule consistent with the rule already in place for home health agencies.

We will be providing information regarding these changes in greater detail over the next few weeks and at our upcoming Hospice Financial Management and Administration Conference.  Given the significant amount of consolidation in the hospice industry, the 36-month rule needs to be carefully understood if the proposed rules are finalized as written.

The 36-month rule deals with changes in majority interest, including asset sales, stock transfers, mergers, and consolidations, within 36 months after the effective date of the initial enrollment or within 36 months after the most recent change in majority interest. The provider agreement and, accordingly, Medicare billing privileges will not be conveyed to the new owner under certain circumstances.  Instead, the prospective provider/owners may need to enroll in the Medicare program as a new provider and obtain a state survey or an accreditation from an approved accreditation organization.

A change in majority ownership, under the 36-month rule, occurs when an individual or organization acquires more than a fifty percent (50%) direct ownership interest in a provider.  This includes an individual or organization that acquires majority ownership through the cumulative effect of asset sales, stock transfers, mergers, or consolidations during the 36-month period after Medicare billing privileges are conveyed or the 36-month period following the providers most recent change in majority ownership.

There are exceptions to the 36-month rule, which include:

  • The provider submitted two consecutive years of full cost reports since initial enrollment or the last change in majority ownership, whichever is later. For purposes of the exception, low utilization or no utilization cost reports do not qualify as full cost reports.
  • A provider’s parent company is undergoing an internal corporate restructuring, such as a merger or consolidation.
  • The owners of an existing provider are changing the provider’s existing business structure (for example, from a corporation to a partnership (general or limited); from an LLC to a corporation; from a partnership (general or limited) to an LLC and the owners remain the same.
  • An individual owner of a provider dies.

Changes in ownership will require enhanced planning and meeting increased reporting requirements because of any implementation of the 36-month rule as well as other proposed hospice integrity changes.  The proposed rule is available here.


The Health Group, LLC is accepting registrations for the 2023 Hospice Financial Management and Administration Conference.  The program will be held at the beautiful Lago Mar Beach Resort, Fort Lauderdale, Florida on November 9-10, 2023.   Program information, including registration information, is available here.

We are encouraging anyone who expects to attend to make room reservations at their earliest opportunity.  Many individuals planning on attending the program have already reserved their rooms.  The Lago Mar Beach Resort will sell out for the days of our conference.  Special rates have been secured with the Lago Mar Beach Resort & Club; however, to secure these rates, call (855) 829-2923 and inform the hotel that you are attending “The Health Group, LLC Hospice Financial Administration Conference” or online at www.lagomar.com.

When making reservations online, go to reservations, click on group code, and enter 2311THEHEA.  Select the dates you will be staying, even if the dates are indicated as not available, select them and your room type.  All attendees are being offered Executive One Bedroom Suites at $235/night.  Resort fees have been waived for our attendees.  If you have a problem, please call the hotel.  The hotel is making the $235/night available for two (2) days prior and two (2) days after the program dates.