What triggers a hospice audit in 2026

Hospice audits don't happen randomly. They're driven by patterns — in claims data, in documentation, in billing behavior — that CMS and its contractors have learned to recognize. Understanding what draws scrutiny is the first step to making sure your agency isn't on the list.

The enforcement environment has intensified considerably. About 668 hospices were subject to medical review under the PPEO initiative as of June 2025, with billing privileges revoked among 122 operators. CMS has signaled that hospice claims will face increased medical review, targeted audits, and enhanced enrollment oversight — especially for providers with recent ownership changes, rapid growth, or atypical utilization patterns. The question for most compliance leaders isn't whether scrutiny is increasing. It's whether their documentation would hold up if an audit letter arrived tomorrow.

Here's what's drawing attention.

Weak or incomplete eligibility documentation

This is the most consistently cited trigger across audit types. The most common Additional Determination Request denial reason is lack of documentation to support a prognosis of six months or less. Auditors aren't just looking for a prognosis statement — they're looking for a complete clinical picture that supports it: functional decline, nutritional indicators, disease progression, the reasoning that connects the patient's condition to a terminal trajectory.

When that narrative is thin, vague, or inconsistent across documents, it raises questions. When it's missing entirely, it's a denial waiting to happen.

Face-to-face encounter problems

Face-to-face encounters are a known audit target, and the compliance bar tightened further with the FY 2026 Final Rule changes to attestation requirements. Every patient file must clearly demonstrate documentation that meets Medicare requirements for eligibility, especially around the six-month prognosis — and the face-to-face encounter is one of the primary places auditors look to confirm it.

Missing signatures, attestations that don't clearly connect clinical findings to the eligibility determination, and telehealth recertifications conducted after pandemic-era flexibilities expired are all common problems that surface during review.

Long lengths of stay and high live discharge rates

Factors that auditors consider red flags include missing signatures for certifying physicians, incomplete or inaccurate documentation, long lengths of stay, and high rates of live discharges. Extended stays aren't automatically problematic — but they attract attention, particularly when the underlying documentation doesn't clearly support continued eligibility at each recertification.

The OIG often focuses on lack of documentation, eligibility issues, and Medicare spending — most notably among patients with a stay of more than 180 days. Agencies with a higher-than-average proportion of long-stay patients should expect that documentation to be scrutinized closely.

Cloned notes and late entries

When progress notes are outright copy-and-paste of previous entries, they lose credibility. Auditors flag identical notes across dates as indicators of inauthentic or retrospective documentation. Similarly, late entries added hours or days later suggest inaccuracies in care delivery.

This is a documentation quality issue that compliance teams often underestimate. A note that looks fine on its face can still trigger additional review if it appears copied, templated, or inconsistent with the clinical picture documented elsewhere in the record.

Rapid census growth and ownership changes

Rapid census growth, ownership changes, or concentrated referral sources raise red flags. CMS's expansion of the PPEO to six states reflects specific concern about new market entrants and agencies undergoing changes in control. If your agency has grown quickly or recently changed ownership, expect closer scrutiny — regardless of your documentation quality.

Contradictions between documents

Auditors review records holistically. A care plan that doesn't align with recent visit notes, or an IDG update that conflicts with what was charted at the last recertification, signals either inconsistent care or inconsistent documentation — neither of which holds up well under review.

If a visit note suggests stability or improvement while the eligibility form indicates decline, it may trigger a review of that patient's entire record. Internal consistency across the clinical record isn't just good documentation practice — it's audit protection.

What audit-ready actually looks like

The agencies that hold up well under audit aren't the ones scrambling to pull records when a request arrives. They're the ones that have already reviewed every chart against CMS requirements before it was billed. They catch eligibility gaps, face-to-face issues, and documentation contradictions upstream — while there's still time to correct them.

That's the standard the current enforcement environment demands. And it's the one that separates agencies that weather audits from agencies that don't.

Brellium reviews every hospice record against CMS requirements before you bill — flagging the documentation issues that draw audit scrutiny before they become a problem. If you want to see how it works for your agency, book a demo.