The U.S. Centers for Medicare & Medicaid Services’ (CMS) period of enhanced oversight for hospices in California, Nevada, Arizona and Texas has resulted in nearly $456,000 in claims denials to date.

Cumulatively, the Medicare Administrative Contractor (MAC) company Palmetto found 330 claims with edit effectiveness through a pre-payment review, 99 of which were denied. This is a 40% denial rate. The total dollar amount reviewed was more than $1.5 million.

CMS in July 2023 first announced a “provisional period of enhanced oversight” for new hospices in those four states. A key component of the enhanced oversight includes a medical review of claims before a MAC will pay them.

“To combat fraud, waste and abuse under the hospice benefit, CMS will expand prepayment medical review this September in Arizona, California, Nevada and Texas,” the agency indicated in a statement. “To help reduce burden on compliant providers, initial review volumes will be low and adjusted based on results. If you’re noncompliant, we may implement extended review or take additional administrative actions.”

These actions follow reports of potentially unethical or illegal practices among hospices, particularly among new companies popping up in those four states, which have spurred calls for stronger oversight from lawmakers and other stakeholders. CMS and the State of California have already implemented a series of new regulations designed to combat fraud, waste and abuse.

Palmetto did not indicate whether any of the hospices that had claims denials had been implicated in fraud.