If you operate a hospice in Texas, the enforcement environment has changed. Qlarant Integrity Solutions – the federal government's Unified Program Integrity Contractor (UPIC) for the Southwestern jurisdiction – is actively issuing Notices of Suspension of Medicare Payments to Texas hospice providers. These are not routine audits. They are immediate, full payment freezes often triggered by a single data point: a live discharge rate that the Centers for Medicare & Medicaid Services (CMS) believes is too high.
If you have received a letter from Qlarant, your Medicare payments may already be suspended. You have 15 days to submit a rebuttal. Do not wait.
Why Texas Hospice Providers Are Now in the Crosshairs
Texas is now a growing focus for regulatory and enforcement efforts. For the past two years, CMS has aggressively pursued hospice fraud in California – particularly in Los Angeles County – suspending payments and revoking billing privileges for hundreds of agencies. On April 28, 2026, CMS Administrator Dr. Mehmet Oz publicly stated that fraudulent actors tend to shift operations to new jurisdictions as enforcement intensifies, and identified Texas as the next target.
Also in April, the Texas Senate Committee on Health and Human Services heard testimony about a dramatic and troubling pattern in the state's hospice market. The number of licensed hospice providers in Texas increased nearly 100% between January 2020 and March 2026 – from roughly 688 providers to 1,366. Of the newest entrants, 308 were co-located with at least one other hospice at the same address, and 15 separate hospice agencies were found operating out of a single building on Loop 410 in San Antonio.
The committee also heard that at least seven Texas hospices reported a 100% live discharge rate and another 25 had rates above 90%. For context, the national average live discharge rate for Medicare hospice patients is roughly 19%.
These are the numbers that triggered federal attention. And from what we’ve seen, CMS is already taking action.
What CMS Is Looking At – and What Triggers a Suspension
Hospice care is a Medicare benefit reserved for patients who are terminally ill, with a physician-certified prognosis of six months or less to live. When a significant percentage of enrolled patients are discharged alive – particularly at rates far above the national average – it raises a direct question: did those patients meet the six-month terminal prognosis standard required for enrollment?
CMS and Qlarant are using data analytics to flag hospice agencies whose live discharge rates, billing patterns, and claim characteristics deviate significantly from national norms. Based on suspension letters we’ve seen from Qlarant's Dallas office, agencies with live discharge rates of 90% or higher during a 15-month lookback period are being targeted for immediate payment suspension. The suspension is issued under the "credible allegation of fraud" standard – a legal threshold that CMS has interpreted broadly and that does not require a completed investigation before payments are frozen.
Under federal regulations, a credible allegation of fraud can be established through claims data mining alone. CMS does not need to interview patients, audit paper records, or complete an investigation before suspending payments. The data is enough.
Other indicators CMS and Qlarant are evaluating include:
- High live discharge rates materially above the national average
- Enrollment of beneficiaries who do not meet the six-month terminal prognosis standard
- Recertification documentation that lacks individualized physician clinical narratives
- High concentrations of agencies at shared addresses or under common ownership
What a Qlarant Suspension Letter Actually Does to Your Agency
The consequences are immediate. When Qlarant issues a Notice of Suspension of Medicare Payments:
- All Medicare payments stop – including claims currently in process. The suspension applies retroactively to claims in the payment pipeline.
- You are not notified in advance. Under the credible allegation of fraud standard, CMS may suspend payments without prior notice when it determines that advance notice would place additional Medicare funds at risk.
- Qlarant will simultaneously request documentation on a specific set of reopened claims, typically 10. You have 30 calendar days to produce that documentation or face claim denial and potential billing privilege revocation.
- The suspension continues until the investigation is resolved. Payment suspensions are generally limited to 180 days, but Qlarant, The U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), or U.S. Department of Justice (DOJ) can each request written extensions – and if your case is referred to HHS-OIG for administrative action, the time limits disappear entirely with no cap on duration. The suspension lifts only after Qlarant calculates an overpayment, the Medicare claims processor issues a demand letter, and suspended funds are applied or released.
- A rebuttal opportunity exists – but the window is narrow. You have 15 calendar days from receipt of the suspension notice to submit a written rebuttal statement. The rebuttal does not lift the suspension while it is being reviewed, but a well-constructed rebuttal is your first and most important line of defense.
What Qlarant Is Requesting in the Suspension Letter
Along with notice of the payment suspension, a Qlarant letter may request additional documentation associated with the reopening of previously processed claims, within 30 days of the date of the notice letter. For a hospice provider, the requested documentation typically includes:
- A signed Election Statement by the beneficiary or authorized representative
- The Initial Certification of Terminal Illness, including the physician's clinical narrative
- All Recertifications of Terminal Illness, including narratives for each subsequent benefit period
- Documentation of the required face-to-face encounter with a qualified medical professional
- The Plan of Care
- Interdisciplinary Team (IDT) meeting documentation
To effectively rebut the suspension, the documentation must demonstrate that each enrolled hospice beneficiary met Medicare's eligibility standard – a physician-certified terminal prognosis of six months or less – and that the level of care billed was medically necessary and actually delivered.
Why You Need Legal Counsel Before You Respond
A Medicare payment suspension cannot be appealed. Unlike an overpayment demand or a claim denial, a payment suspension action does not qualify for the formal Medicare appeals process. Your only defense is to submit a rebuttal.
A rebuttal is not a records submission. It is a written legal argument, submitted within 15 calendar days of the suspension notice, presenting specific evidence that the suspension is not warranted or that good cause exists for it to be discontinued or limited in scope.
A well-constructed rebuttal serves several purposes:
- It creates a formal record with CMS that can support your position in subsequent proceedings
- It opens a direct channel of communication with Qlarant and CMS
- It may support an argument for a partial suspension rather than a full payment hold
- It demonstrates that your agency has a credible defense – reducing the likelihood of escalation to a formal overpayment determination or referral to DOJ or OIG
Qlarant makes it clear in its notice letter: "Merely providing general assertions or denials typically will be insufficient to overcome the allegation(s)." Instead, a rebuttal must directly and specifically address each factual basis for the suspension – supported by clinical evidence and a clear explanation for any elevated live discharge rate. Failing to do so may signal to CMS and HHS-OIG that your agency has no meaningful defense.
The time to involve a Medicare fraud attorney is before the rebuttal is drafted – not after it has already been submitted.
What to Do If Your Hospice Agency Receives a Qlarant Letter
- Do not ignore it. The 15-day rebuttal window and the 30-day documentation deadline begin running from the day you receive the letter and the date of the letter, respectively. Missing either deadline worsens your position.
- Do not respond without legal counsel. The rebuttal is your first formal communication with the investigation. It needs to be strategic, specific, and supported by evidence – not reflexive.
- Preserve all documentation immediately. Once you receive a suspension notice, you have a legal obligation to preserve all potentially relevant records. This includes patient medical records, billing records, certification documentation, IDT notes, and any internal compliance materials. Document destruction following receipt of a government investigation notice can result in separate criminal obstruction charges.
- Do not discuss the investigation broadly. Limit discussion to those who need to know. Information shared with staff or colleagues can be discovered through interviews and subpoenas.
- Call a healthcare attorney the day the letter arrives. Early intervention significantly improves your chances of a favorable outcome. An attorney can help you evaluate the clinical and billing data underlying the suspension, construct a defensible rebuttal, manage the documentation request, and position your agency for the best possible resolution – before the investigation deepens.
How Hendershot Cowart P.C. Can Help
Hendershot Cowart P.C. represents hospice providers and other Medicare-enrolled healthcare entities facing UPIC investigations, Qlarant audits, and Medicare payment suspensions nationwide. Our healthcare law attorneys have more than 150 years of collective legal experience and have defended providers against program integrity actions from Qlarant, SafeGuard Services, and CoventBridge.
If your hospice agency received notice of a Qlarant audit, under a payment suspension, or experiencing elevated scrutiny from CMS, call Hendershot Cowart P.C. at (713) 783-3110 or contact us online.
We represent hospice providers throughout Texas and across the United States.