Volume 26.11
In September 2025, we reported that the Office of Inspector General (“OIG”) released a report, “Texas Did Not Calculate or Collect Hospice CAP Overpayments Totaling $10.5 Million”. A copy of the OIG report is available here. At that time, we warned Texas hospices, and hospices in other states, that depending on the respective state’s Medicaid plans, hospices may be required to remit CAP overpayments resulting from services to Medicaid beneficiaries.
In the last few days, we have seen numerous letters from the Texas Health and Human Services Commission (“HHSC”) demanding repayment of Medicaid CAP liabilities going back to the 2020 CAP Year. The 2020 CAP Year is the earliest year mentioned in the OIG report. It appears that HHSC is starting with the oldest CAP Years and moving forward to recover these Medicaid funds, part of which is due to the federal government.
The repayment demands include the following:
“In accordance with the Centers for Medicare and Medicaid Services (CMS) Medicaid Hospice Guidelines, 42 Code of Federal Regulations (CFR) §418.302, Payment Procedures for Hospice Care and 26 Texas Administrative Code (TAC) §266.217 Medicaid Hospice Payments and Limitations, the Health and Human Services Commission (HHSC) completed an aggregate cap review for cap year 2020.”
The repayment demand provides the CAP calculated amount for the CAP Year and reimbursement made to arrive at the CAP liability owed to the State of Texas.
Hospices are provided the options of accepting the obligation, or appealing the proposed recoupment as provided in 26 TAC §52.351. Hospices are given fifteen (15) calendar days from the date of the repayment demand to either accept the amount of the obligation or appeal. The appeal requires a request for an administrative hearing in accordance with 1 TAC §357.484. These can be accessed here and here.
In most cases, the amount of any Medicaid CAP overpayment would not be a large amount; however, we are concerned that HHSC provided no calculations or details supporting the CAP liability calculation. We recommend that hospices receiving these demands consider appealing on the basis that HHSC has not provided any details regarding the calculation, or the calculation itself, of the CAP liability. These hospices may want to consult with legal counsel regarding drafting the appropriate appeal.
HOME HEALTH PAYMENT PROPOSED RULE PROVIDES FOR ENROLLMENT AND REVOCATION CHANGES APPLICABLE TO HOSPICES
The proposed rule provides Medicare-wide program integrity rules, including making all Medicare enrollment revocations retroactive to the date of the noncompliance. Additionally, agencies undergoing specific changes in majority ownership, must enroll as new providers.
Under current regulations, certain Medicare enrollment revocations become effective thirty (30) days after the date that CMS or the CMS contractor mails notice of the revocation to the affected provider or supplier (hereafter “provider”). However, other revocations take effect retroactively to the date the provider’s noncompliance began. CMS is proposing to make all revocation grounds retroactive.
CMS is proposing to add several new grounds for revocation or denial of enrollment and to expand some of the existing grounds. Among these proposals are the following:
- Change in Majority Ownership–Hospices, HHAs, and suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) must reenroll in Medicare as a new provider and undergo a survey/accreditation if they experience certain changes in majority ownership. CMS proposes to deny or revoke enrollment if this requirement is violated.
- Program or License Suspension/Termination – CMS currently may deny or revoke enrollment if a provider: (1) has a suspended/revoked license in another state; or (2) is suspended/revoked from Medicaid or another federal healthcare program. The agency proposes expanding this to include similar suspensions/revocations involving the provider’s owners or managing employees/organizations.
In the next few weeks, we will be reporting on these and other compliance related matters.
LAS VEGAS PROGRAM FILLING RAPIDLY
The 2026 “Hospice Financial & Compliance Management Conference” is now available for registration. Early registration has been great. Space at this program is limited to enhance the quality of the program and networking opportunities for the attendees. The two-day program is being held at the Paris Las Vegas on October 1-2, 2026.
As always, this annual program offers the most extensive hospice financial coverage available. The integration of finance and compliance is critical to survival and success of any hospice. This year, compliance and the associated financial risks are critical. Initial information and registration information is available here. Discounted room rates are available here or by calling (877) 603-4389. Make certain to inform Paris Las Vegas that you are attending The Health Group program. See you in Las Vegas.