Insider Audit Advice: How to Survive CMS Reviews According to A Hospice Attorney

Hospices are navigating sharper compliance challenges than ever before. Increased regulatory scrutiny, including heightened audits and denials, is making proactive planning crucial for survival. Brellium hosted a detailed conversation with leading healthcare attorney Zaina Niles, associate at Husch Blackwell, to share actionable guidance and proactive strategies hospice providers can use today to mitigate risk and ensure audit preparedness.

Why Hospices Are Facing a ‘Wave’ of Audits

From fraud investigations to tightened oversight procedures, regulators are very active right now. Zaina Niles, a seasoned expert in hospice audits and appeals, explained the driving forces behind the heightened scrutiny:

"Hospice has always been under the microscope, but recent efforts to root out fraud, waste, and abuse have ramped up the pressure. California, especially Los Angeles County, has been a focal point, dubbed the ‘ground zero for hospice fraud.’"

The focus isn't solely on unethical practices; CMS is casting a wide net that impacts compliant providers too:

"Unfortunately, many long-standing, reputable hospices are getting caught up in this. This can trigger harsh consequences like payment suspensions or even billing privilege revocations."

Where Audit Denials Are Coming From

Hospice providers are frequently cited for clinical and technical reasons during audits. Zaina broke this down into key categories:

1. Misunderstanding Chronic vs. Terminal Illness

Auditors are misinterpreting clinical eligibility standards and forming a false distinction between chronic and terminal illness.

"Reviewers often claim that a chronic illness doesn’t qualify someone for hospice care because it’s ‘not terminal.’ But for many patients, their chronic disease has progressed to a terminal stage—that’s what makes them eligible for hospice," Zaina explained.

2. Clinical Denial Themes

Auditors seem overly focused on measurable decline, misapplying local coverage determination (LCD) guidelines meant to provide flexibility. Zaina elaborated:

"Reviewers often believe there needs to be objective measurable decline in every benefit period to justify continued care. That’s inaccurate—the disease trajectory varies vastly by primary hospice diagnosis. The denial process often errs by treating LCD guidelines as hard requirements rather than flexible parameters."

Auditors also rely too heavily on quantitative data, like FAST scores or weights, ignoring qualitative factors that indicate health deterioration. "Decline isn’t only measured by numbers. You want to document visible signs—markers like loose-fitting clothing, bony prominences, or even temporal wasting," said Zaina.

How Providers Can Strengthen Documentation

Proactive, thorough documentation is an organization’s best defense against audit denials, Zaina emphasized.

For example, physician narratives must explicitly connect clinical observations to prognosis.

"Physicians need to synthesize the clinical data points and explicitly explain why they support a prognosis of six months or less if the illness runs its normal course. Numbers and observations must work hand-in-hand," Zaina said.

Nursing documentation also requires precision:

"Notes should have details—numbers, comparisons across time—not repeated or overly generalized statements."

For more advice about how to build defensible terminal narratives, see Brellium's guide to drafting prognosis documentation.

2. Address Technical Gaps and Election Statements

On technical denials, Zaina outlined frequent pitfalls:

• Missing Documentation: Election statements don’t meet 42 CFR compliance standards.
• Addendums: Late or incomplete addendums hurt claims. Zaina cautioned:

"When detailing unrelated items, drugs, services—these sections must be clear and comprehensive for reviewers."

Concrete Steps to Avoid Risk

Zaina shared specific action steps hospices can implement now to minimize audit vulnerabilities:

1. Audit Proof Key Forms

Start with a compliance review of essential documents:

“Election statements are under scrutiny. Review them carefully or have legal counsel do it," Zaina said. "Husch Blackwell often advises how to tighten forms to both meet CFR rules and reduce human error.”

2. Conduct Prebilling Reviews

Before submitting claims, consider targeted sampling or, better yet, automated review processes:

"Prebilling reviews allow you to catch missed details in records that could lead to denials. Brellium, for example, offers automated solutions to flag deficiencies before claims are denied—it’s a great compliance safeguard," said Zaina.

What the Future Holds for Hospice Compliance

Anticipated Oversight Expansion

With provisional period reviews expanding to new states (Ohio, Georgia in 2025) and MAC involvement increasing, understanding evolving processes is vital. Zaina cautioned:

"Unfortunately, consequences for noncompliance will remain harsh—including prepayment reviews, suspended payments, and revoked billing privileges. Providers need to stay ahead of changes."

Ambiguity from CMS

When asked about interpreting clinical denial standards, Zaina echoed the challenges of operating in an inherently uncertain field:

"Hospice is largely an art rather than a science. It’s forward-looking by nature, asking clinicians to make educated guesses about future benefit periods. Just be sure your clinical staff knows how to work with LCD guidelines effectively."

The Role of AI in Compliance Reviews

While CMS is interested in AI for charts, adoption may be slow:

Zaina Niles: "Healthcare lags compared to other industries in incorporating tech advancements. That said, checking with legal counsel about AI use could be helpful as regulatory priorities evolve."

How Brellium Helps

Hospices face relentless pressure from regulatory audits, driven by oversights in clinical documentation and inconsistencies in technical standards. Zaina Niles advised providers to focus on improved record organization, thorough clinical narratives, and compliance reviews as the most effective strategies. Above all, hospices should aim to "paint the picture" clearly for auditors, ensuring the patient’s decline is understandable and indisputable.

Brellium helps hospices stay on top of their documentation by assessing visit notes, CTI documentation, face-to-face encounters and more to ensure clinical observations support the eligibility narrative and demonstrate ongoing decline.

Our CTI review checks for physician signatures, prognosis documentation, and terminal diagnosis, while face-to-face compliance checks confirm that encounter documentation meets CMS timing and content requirements — one of the most frequently cited technical denial bases auditors are flagging right now.

Beyond individual documents, we assesses whether clinical evidence of decline is specific and substantive, rather than templated or repetitive. We also verify across documents to confirm you tell a coherent, unified eligibility story — because inconsistencies can be used by reviewers to question the accuracy of the record as a whole. See how this works for your organization by booking a 15-minute demo with our team.