A hospice that has just enrolled in Medicare, or that has just gone through a change of ownership, can find every claim it submits routed into medical review before CMS will pay it. The mechanism is the provisional period of enhanced oversight, created under Section 1866(j)(3) of the Social Security Act and implemented at 42 C.F.R. § 424.527. CMS says it opened the program after numerous reports of hospice fraud, waste, and abuse, and concern about market oversaturation from the rising number of hospices enrolled in those states. The practical effect is an audit that does not let up: every claim held for review, every denial a step toward possible revocation.
Who The Provisional Period Reaches
CMS defines a "new" hospice for purposes of the provisional period as one that is newly enrolling in Medicare, has completed a change of ownership meeting the requirements of 42 C.F.R. § 489.18, has undergone a 100% ownership change that does not meet those requirements, or is reactivating Medicare billing privileges after a deactivated status. The trigger is the enrollment event, not the hospice's billing record. A hospice with years of clean claims history can land in the same provisional period as a first-time entrant if it changes hands or reactivates.
Which States Are Covered Today
The provisional period is not a nationwide rule. CMS started it on July 13, 2023 in Arizona, California, Nevada, and Texas, then added Georgia and Ohio on December 30, 2025. CMS has not announced that the program covers any other state. A hospice outside these six states is not presently subject to the provisional period, though the list has already grown once and could grow again without much advance notice.
What Enhanced Oversight Requires
The statute lets CMS set the provisional period anywhere from 30 days to one year, and the hospice's notification letter, mailed to the correspondence address on file in PECOS, states both the effective date and the duration CMS has chosen. During the period, CMS performs medical review of the hospice's claims, including prepayment review, and its own materials describe auditing 100% of a covered hospice's claims for that timeframe. Unlike a RAC review, which examines claims already paid, the provisional period intercepts claims before CMS pays them. A hospice that misses a documentation request, or whose documentation fails review, faces claim denials or recoupment, and persistent noncompliance can lead to revocation under 42 C.F.R. § 424.535. CMS also reserves the right to review claims after the period ends, under Section 1833(e) of the Social Security Act, so the formal end date does not guarantee that scrutiny stops.
Health Law Alliance's attorneys have overseen 2,000+ audits and handled 5,000+ matters, with 25+ years of experience.
CMS can place a hospice under 100% prepayment review for up to a year based on how it enrolled, not on anything the hospice has billed.
Getting Through The Review Period
A hospice shortens the review by treating every documentation request as a first-pass priority: a complete eligibility certification, a dated physician narrative, and an election statement consistent with the certifying diagnosis close the most common reasons a claim gets held, measured against the same standard a local coverage determination applies to any other medical review. A pattern of documentation gaps across denied claims is also the foothold a contractor uses to extrapolate an overpayment demand in a later post-payment review. Denials carry the same appeal path as any Medicare claim, through redetermination, reconsideration, and an administrative law judge hearing; where that hearing goes against the hospice, see Medicare Appeals Council Review After an ALJ Loss. Deciding whether an escalation point in the audit, such as an extrapolated demand, placement on prepayment review, a law enforcement referral, or a revocation notice, calls for counsel is the question addressed in When to Engage a Medicare Audit Attorney.
Why Early Legal Counsel Is Critical
It is critical that healthcare providers promptly retain experienced healthcare defense counsel upon receiving a subpoena, audit notice, investigative request, or other government inquiry. Early legal intervention can protect the provider's rights, ensure appropriate responses to government requests, avoid inadvertent admissions, preserve relevant defenses, and allow counsel to communicate with investigators on the provider's behalf. Delaying legal representation can significantly affect the outcome of a matter and expose the provider to unnecessary risk, particularly once a provisional-period notice has already started a fixed review clock running.
How Health Law Alliance Can Help
Health Law Alliance represents hospices from the moment a provisional-period notice arrives, taking the same proportionate approach to cash flow and appeal deadlines described in Medicare Audit Defense for Small Practices. The firm's attorneys build the certification and documentation record the review requires, pursue denials through every level of appeal, and work alongside the firm's broader medicare audit defense practice. Contact Health Law Alliance for a free, confidential consultation through its hospice and home health audit defense practice.
