Indiana hospice regulations operate on two levels: a state license issued by the Indiana Department of Health under Indiana Code 16-25-3, and, for any program that bills Medicare or Medicaid, the federal Conditions of Participation at 42 CFR Part 418. Both apply at the same time, and both must be satisfied continuously, not just at the point of initial approval.
State Licensing Under IC 16-25-3
No one may offer hospice services in Indiana without a license from the Indiana Department of Health (IDOH). The licensing statute, Indiana Code Title 16, Article 25, Chapter 3, also prohibits unlicensed persons from using the word “hospice” to describe their services at all. Indiana’s Medicaid provider enrollment rules reinforce the requirement, directing that every hospice and its employees be licensed under applicable federal, state, and local laws and citing both 42 CFR 418.72 and IC 16-25-3.1Legal Information Institute. Indiana Code 405 IAC 5-34-2 – Provider Enrollment
Before issuing a license, IDOH conducts an initial survey of the program. Licenses carry an expiration date, and the statute separately addresses employee qualifications and the notice a hospice must give when a third party will handle billing. Providers who want both state licensure and Medicare certification generally go through a combined survey process administered through IDOH’s Hospice Agency Licensing and Certification Program.
Federal Conditions of Participation
Any hospice billing Medicare must meet the Conditions of Participation (CoPs) in 42 CFR Part 418.2Centers for Medicare & Medicaid Services. Hospice These cover organizational structure, staffing, care delivery, patient rights, and quality oversight. Even hospices that do not bill Medicare often align with the CoPs because Indiana’s Medicaid program and many private insurers use them as the benchmark.
Every hospice must have a governing body (or designated persons functioning as one) that holds full legal authority over management, service delivery, fiscal operations, and continuous quality improvement.3eCFR. 42 CFR 418.100 – Condition of Participation: Organization and Administration of Hospice Care One body sits accountable for everything from hiring to clinical outcomes.
That body must also run a data-driven quality assessment and performance improvement (QAPI) program. It has to track quality indicators, analyze adverse patient events, and show measurable improvement in palliative outcomes. Documentation must be available for CMS to review during a survey, and performance improvement projects must concentrate on high-risk or problem-prone areas and track whether corrective actions actually hold.4eCFR. 42 CFR 418.58 – Condition of Participation: Quality Assessment and Performance Improvement
Interdisciplinary Group and Staffing
Clinical care is built around an interdisciplinary group (IDG) that addresses each patient’s physical, psychological, emotional, and spiritual needs. The IDG must include a physician (doctor of medicine or osteopathy, employed or under contract); a registered nurse, with one RN specifically designated to coordinate care and ensure continuous assessment; a social worker, marriage and family therapist, or mental health counselor; and a pastoral or other counselor.
The IDG develops a written, individualized plan of care for each patient in collaboration with the attending physician, the patient or representative, and the primary caregiver. The plan covers pain and symptom management, the scope and frequency of services, measurable outcomes, and necessary medications and supplies.5eCFR. 42 CFR 418.56 – Condition of Participation: Interdisciplinary Group, Care Planning, and Coordination of Services
Medical Director
Every hospice must designate a medical director who is a doctor of medicine or osteopathy, employed or under contract. The medical director, or a physician designee when the director is unavailable, reviews each patient’s clinical information and provides written certification that life expectancy is six months or less if the illness runs its normal course. The certification considers the primary terminal condition, related diagnoses, current findings, medication orders, and any unrelated medical conditions.6eCFR. 42 CFR 418.102 – Condition of Participation: Medical Director
Core Services and the Direct-Provision Rule
Hospices must provide substantially all core services through their own employees rather than through contracts. Core services include nursing care, medical social services, and counseling. Physician services may be contracted, but all contracted and employed physicians work under the medical director’s supervision. Nursing services must be provided by or under the supervision of a registered nurse, and social work services must be directed by a physician and grounded in the patient’s psychosocial assessment.7eCFR. 42 CFR 418.64 – Condition of Participation: Core Services
Volunteer Program
An active volunteer program is mandatory. Volunteers serve in administrative or direct patient care roles under the supervision of a designated hospice employee, and their hours must equal at least 5 percent of total patient care hours provided by all paid employees and contract staff. The hospice must document the cost savings, including what it would have cost to fill those positions with paid workers.8eCFR. 42 CFR 418.78 – Condition of Participation: Volunteers This is a frequent survey citation, because sustained volunteer engagement takes continuous recruitment and tight recordkeeping.
Four Levels of Care the Program Must Offer
Every Medicare-certified hospice must be able to provide four distinct levels of care:9Medicare.gov. Medicare-Certified 4 Levels of Hospice Care
- Routine home care, the most common level, for patients who are generally stable with symptoms adequately controlled.
- Continuous home care, short-term crisis-level care in the home when pain or symptoms are out of control. It requires at least eight hours of predominantly nursing care within a 24-hour period.
- General inpatient care, also crisis-level, but delivered in an inpatient setting such as a hospital or skilled nursing facility.
- Respite care, temporary inpatient care so a family caregiver can take a break. It is tied to caregiver needs rather than patient symptoms and is limited to five consecutive days at a time.
Billing the wrong level is one of the most common hospice compliance errors. General inpatient care, for example, requires documented evidence that symptoms could not be managed at home; billing it simply because the patient happens to be in a facility invites audit scrutiny.
Certification and Recertification Timelines
Medicare hospice eligibility rests on a physician certification that the patient has a terminal illness with a life expectancy of six months or less. Benefit periods run as two initial 90-day periods followed by an unlimited number of 60-day periods.10eCFR. 42 CFR 418.22 – Condition of Participation: Certification of Terminal Illness
For the first 90-day period, both the hospice medical director (or physician designee or IDG physician member) and the patient’s attending physician, if the patient has one, must sign the certification. For every subsequent period, only a hospice physician needs to sign. Written certification generally must be in hand before the claim is submitted. If written certification cannot be obtained within two calendar days after a period starts, an oral certification within that window will serve, provided the written version follows before the claim is filed. Recertifications can be completed up to 15 calendar days before the next benefit period begins.
Election and Revocation
An eligible patient elects hospice by filing an election statement with the hospice of their choice. If physical or mental incapacity prevents the patient from signing, a representative may file on their behalf. The statement must acknowledge that hospice care is palliative rather than curative, that certain regular Medicare benefits related to the terminal illness are waived during the election, and must spell out cost-sharing and the right to contact a quality improvement organization.11eCFR. 42 CFR 418.24 – Election of Hospice Care
The waiver trips up many families. For the duration of the election, the patient gives up Medicare coverage for any services related to the terminal illness unless those services are provided by or arranged through the designated hospice. Services unrelated to the terminal condition stay covered under regular Medicare.
A patient or representative may revoke the election at any time by filing a signed statement with the hospice indicating the revocation date. Revocation cannot be backdated. Once revoked, hospice coverage ends for the remainder of that election period, normal Medicare benefits resume, and the patient may re-elect hospice for any future period.12eCFR. 42 CFR 418.28 – Revoking the Election of Hospice Care The hospice must file a notice of termination with its Medicare contractor within five calendar days after the effective revocation date.
Patient Rights and Privacy
Federal regulations list patient rights that the hospice must explain during the initial assessment visit, before care begins. The notice must be given verbally and in writing, in a language and manner the patient understands, and the patient or representative must sign confirming receipt.13eCFR. 42 CFR 418.52 – Condition of Participation: Patient’s Rights Those rights include:
- Effective pain management and symptom control for conditions related to the terminal illness
- Involvement in developing the plan of care
- Refusing care or treatment
- Choosing an attending physician
- A confidential clinical record, with access and release governed by HIPAA
- Freedom from mistreatment, neglect, and any form of abuse, including misappropriation of property
- Information about covered services and any limitations on them
Indiana law adds another layer through IC 16-36-1, which governs health care consent. The hospice must also comply with federal advance directive requirements and give written information about its advance directive policies, including a description of applicable Indiana law.
HIPAA compliance is a continuous operational concern because hospices handle sensitive records every day. The Privacy Rule sets national standards for how individually identifiable health information can be used or disclosed without the patient’s authorization.14Department of Health and Human Services. The HIPAA Privacy Rule For hospice programs that means staff training on privacy practices, careful handling of records shared across the interdisciplinary team, and clear protocols for communicating with family members, particularly when several family members are involved in a patient’s care.
Bereavement Services
Hospice care does not end at death. Every program must maintain an organized bereavement counseling program supervised by a qualified professional with experience or education in grief and loss counseling. Services must be available to the family and other individuals identified in the bereavement plan of care for up to one year after the patient’s death.7eCFR. 42 CFR 418.64 – Condition of Participation: Core Services
An initial bereavement assessment is part of the comprehensive patient assessment, updated through the episode of care and again after death. The resulting plan of care should specify the type and frequency of services, tailored to the grief needs identified for each family. Bereavement services are not separately billable to Medicare. They are built into the hospice per diem rate, so the hospice absorbs the cost and must budget for it.
FY 2026 Medicare Reimbursement
Medicare and Medicaid pay hospices a daily rate that varies by level of care. For federal fiscal year 2026, effective October 1, 2025, the base daily rates for providers that have submitted required quality data are:15Centers for Medicaid Services. Annual Change in Medicaid Hospice Payment Rates – FY 2026
- Routine home care, days 1 through 60: $231.13 per day
- Routine home care, days 61 and after: $182.18 per day
- Continuous home care: $1,674.94 per day
- Inpatient respite care: $560.51 per day
- General inpatient care: $1,199.86 per day
Providers that have not submitted required quality data receive lower rates across every category. Routine home care in the first 60 days, for example, drops to $222.12 per day. The wage component of the rates is adjusted by a hospice wage index to reflect local labor costs, so actual payments vary by geography.
Medicare also imposes an aggregate payment cap. For the cap year ending September 30, 2026, the hospice cap amount is $35,361.44 per beneficiary.16Centers for Medicare & Medicaid Services. Hospice Payments: FY 2026 Update If total Medicare payments exceed the cap amount multiplied by the number of beneficiaries served during the cap year, the hospice must repay the difference. This is why long patient stays can create financial pressure, especially when patients remain enrolled well past six months.
Surveys and Penalties
Hospices undergo standard recertification surveys by either the state survey agency or a CMS-approved accrediting organization every three years.17Centers for Medicare & Medicaid Services. State Operations Manual – Appendix M: Hospice Complaint-based surveys can occur at any time and may focus on a narrower set of conditions.
When deficiencies turn up, CMS can require a directed plan of correction that the hospice must implement on a set timeline. Civil money penalties escalate with severity:
- $500 to $4,000 per day for condition-level or repeat deficiencies that are primarily structural or process-related and do not directly affect patient care outcomes
- $1,500 to $8,500 per day for condition-level or repeat deficiencies directly tied to poor patient care outcomes, where the situation does not rise to immediate jeopardy
- $8,500 to $10,000 per day for condition-level deficiencies that constitute immediate jeopardy to patient health or safety
No single penalty assessment can exceed $10,000 per day. Per-instance penalties run from $1,000 to $10,000 per instance. A hospice that waives its right to a hearing within 60 calendar days of the notice receives a 35 percent reduction, with payment due within 15 days of the written waiver.
Beyond money, CMS can suspend payment for all new admissions. A hospice that fails to achieve substantial compliance risks termination of its Medicare provider agreement, which cuts off most of its revenue. For Indiana providers, loss of the state license under IC 16-25-3 would independently bar the program from operating at all.