Hospice Agency Due Diligence: Buyer Checklist

Set the review scope and responsibilities

List the legal provider, locations, service area, branches and any inpatient component in the deal. Match those facts to the ownership, license, payroll and payer records. State whether related home-health or personal-care businesses are included. Shared costs and contracts need a clear treatment when only part of an operation is sold.

Use the hospice multiple guide to check that price and earnings cover the same businesses. It also explains why a missing hospice allocation cannot be supplied by a convenient revenue percentage.

Assign care and eligibility to qualified clinical reviewers, payment calculations to appropriate specialists and legal authority to counsel. Use one issue log so a finding reaches everyone affected. A clinical concern can change the financial review, while an unusual payment pattern may need clinical explanation.

Agree on the periods and sample limits. Set an information cutoff date. Request known surveys, disputes and material staff or vendor changes early. Resolve specific questions while the agency keeps supporting patients and families. Give each document request a purpose and a reviewer.

Trace patient activity through claims and cash

Request admissions, discharges, patient days and care levels. Match them with gross claims, adjustments, refunds and receipts for the same periods. Reconcile the operating reports to the accounts. Keep prior-period collections and reversals identifiable. A rise in bank deposits does not by itself establish better current earnings.

CMS describes daily hospice payments tied to the applicable care level, with duties that extend beyond the visits made on a particular day. A census report therefore cannot establish all revenue or cost assumptions. Read the actual claims and service records together. (Source: CMS hospice benefit and payment)

Separate payer and care-level groups where they affect payment or cost. Review AR aging by payer with later receipts and adjustments. Explain balances that remain open. An appeal in progress, a favorable decision and an actual payment are different stages of evidence.

Use stay patterns to frame the clinical review

Ask for stay-length distributions, admissions, revocations, live discharges and other activity relevant to the selected review. Define the period and population behind each measure. Do not infer improper care from one average or treat a shorter stay as proof that every record supports payment.

CMS describes benefit periods and recertification. A patient must still meet the clinical requirements to remain eligible. Six months is not an automatic maximum stay for every hospice patient. Qualified reviewers should examine a defined sample and explain both their findings and the limits of that sample. (Source: CMS hospice eligibility)

If a record lacks needed support, ask the responsible reviewer to identify the issue and appropriate next step. Do not assume later paperwork cures every historical problem. The buyer's forecast should fund appropriate care and supported operating improvements, without targeting admissions, discharges or service intensity for revenue alone.

Check the length-of-stay definition before comparing completed agency stays with published lifetime measures. The benchmark guide places those cohort distinctions alongside census, payer and labor measures. A historical duration average does not determine a current patient’s remaining care.

Assemble the aggregate-cap evidence by period

Request self-determined cap filings, supporting data, contractor determinations, repayments, appeals and current estimates. Label each period and distinguish a final figure from an estimate. Match the stated amount owed to the accounts and cash already paid. An accrual does not prove that a refund has been made.

Use the hospice cap sale register to connect each notice version with applied payment evidence. The exercise preserves an unfinished-period estimate outside determined balances. That distinction helps reviewers request the missing record without forcing unlike amounts together.

Under 42 CFR 418.308, filing is due within five months after cap-year end using data no earlier than three months after period end. An overpayment due must be remitted, and excess payments are refundable. Review filing status, determinations and later changes with the payment specialist. (Source: 42 CFR 418.308)

Include the period spanning closing. Do not assume the obligation splits simply by days owned, or that an escrow binds the contractor. Counsel should use the supported calculation to address who owes what. Agree on records access, cooperation and the process for later changes. The hospice overview illustrates why a liability and funded cash reserve are distinct.

Keep care levels and other payment limits separate

Review the care levels actually provided and the costs behind them. Request relevant records and contracts for continuous home care, respite and general inpatient care. Each payment category has rules about the care and setting. A higher rate is not permission to select a different level for financial reasons. (Source: 42 CFR 418.302)

Ask the payment reviewer which other limits apply. Keep them separate from aggregate cap exposure. Keep each calculation and period visible. A general line called cap risk can hide unrelated questions and make the parties think one reserve settles every issue.

The hospice earnings exercise holds total patient days fixed and compares revenue with defined costs. It asks how much remains in each fictional period. That result cannot settle the separate payment questions above. Eligibility, limits and open adjustments need their own records and review before the earnings support value.

Cost the whole care team and support network

Match staff and contractor costs to the accounts. Review nursing, clinical leadership, medical director arrangements, social work, counseling, aides and office support as applicable. Include supervision, training and backup cover. Identify the person who handles urgent needs and the plan for absence or turnover.

Inspect pharmacy, equipment, supplies, transport and inpatient arrangements where used. Read fees, open balances, service terms and required sale consents. Check who responds outside ordinary hours. A vendor's past reliability does not establish that the buyer has agreed access on the same terms.

The hospice purchase guide compares a fictional telephone agreement, pharmacy contract and respite arrangement. Each supports a different part of the network. The pain or symptom-management pathway still needs evidence. Use that missing answer to focus the next review before describing the available documents as a complete service plan.

List the owner's duties and price any necessary replacement. Check skills, credentials and hours available. Confirm lawful system access. A fictional seller may coordinate every urgent equipment request while the written staff chart assigns only routine ordering. That hidden work needs an assigned owner and funded cover; it does not disappear with the seller's salary.

Follow oversight matters through to their current status

Request surveys, complaints, correction plans, medical-review requests, denials, appeals and sanctions. Track each notice, reply and current status. Separate promised work from completed work. Check agency acceptance where required. A submitted response is not itself a settled matter.

CMS maintains separate hospice medical-review and oversight processes. Identify their scope and the target's actual correspondence. A change to one program does not prove that all other review has ended or that the agency has no exposure. Avoid drawing that conclusion from public search alone. (Source: CMS hospice medical review)

OIG's voluntary guidance helps organize questions about oversight and reporting channels. Ask how staff raise concerns and what the records show about management's response. A written policy should be assessed against practice, rather than presented as certification of compliance. (Source: OIG guidance)

Review referral evidence without assuming future patients

Define referral concentration by period and outcome. A count of inquiries differs from admissions, patient days or receipts tied to those services. Review trends and explanations for major changes. A single large source may expose a dependency that the overall census hides.

Identify relationships maintained mainly by the seller or a departing employee. Ask what contact the continuing team already has and how service issues are handled. Future patient choices and referral volume cannot be guaranteed through a purchase agreement or a planned introduction.

Have healthcare counsel review relevant arrangements. Keep business expectations separate from lawful care and patient choice. A growth case needs evidence of demand and the capacity to serve it. Show the added costs. It should remain a scenario until the underlying steps and assumptions are supported.

Establish enrollment and state authority independently of price

Use the records to trace initial Medicare enrollment and later majority changes. Under 42 CFR 424.550, hospice is within the relevant 36-month rule and its listed exceptions. A stock deal is not automatically exempt. Counsel should assess the actual facts and proposed sequence. (Source: 42 CFR 424.550)

CMS's current page dates the HHA and hospice moratorium to May 13, 2026. Its FAQs explain the scope, including initial applications and non-exempt majority changes. Confirm whether the deal requires an affected application. An assumed expiry or a requested individual exception cannot support the plan. (Sources: CMS moratorium status, CMS FAQs)

Use the moratorium guide alongside the actual contractor and agency responses. Track state licenses, payer terms and other consents separately. Give each requirement a status and a supporting record. One completed application does not prove every operating right is in place.

Protect records, patients and family communication

Pre-NDA outreach should omit financials, identity, exact location and identifying patient, worker, vendor or referral details. Later authorized financial diligence can use grouped or coded records, but small groups can still identify people. Name removal alone is not proof of de-identification. (Source: HHS de-identification)

Use the hospice transfer record review within that protected workflow. Its fictional sample separates unchanged-provider records from requested hospice changes and unresolved identity questions. The anonymous deal summary supports follow-up without replacing the authorized clinical record.

Clinical reviewers need a lawful basis for record access. Define the users, purpose, safeguards and handling of copies. HHS minimum necessary has scope and exceptions. A general NDA does not replace that analysis. Use the records-custody guide to plan both review and handoff. (Source: HHS minimum necessary)

The hospice seller exercise follows a fictional death before closing and planned family support afterward. The patient has left active census. Support and record duties remain separate questions. Use the timeline to assign that work without treating the archived chart or family contact as a new patient day.

Plan truthful communication with staff, patients, representatives and families. Required notices remain part of the process. Do not promise the same services or staff unless the buyer has agreed and can deliver. Visits and interviews should respect care routines and the seller's approved process.

Turn findings into a funded closing recommendation

Use the issue log to separate earnings gaps, uncertain AR, past obligations, one-time costs and required approvals. Record the evidence, effect on the deal, assigned adviser and next action. A reserve for one dispute is not the same as cash for ongoing care, and a discount cannot supply missing authority.

Use the working-capital plan to test payroll, pharmacy, equipment and other cash needs. State how old invoices, refunds and mixed-period payments will be handled. Keep the purchase price and specific settlement reserves separate from money required to run the agency.

Connect the recommendation with the LOI and first 90 days plan. Jason Taken can coordinate commercial decisions while qualified reviewers assess their fields. Record the cutoff date and refresh material facts before closing so the decision reflects the hospice the buyer will actually operate.

Use the hospice cap bridge to track a defined obligation after refunds. The live-discharge example addresses a different question: which endings and transfers a report counts.

The 36-month-rule definition covers hospice as well as home health. Its short ownership example helps prepare the timeline for the transaction team; the facts, exceptions and current enrollment restrictions still need review.

Use the hospice proceeds example to connect open diligence questions with the offer’s actual cash schedule. A note, an earn-out and a holdback have different timing and collection risks even when a headline adds their stated amounts.