1000, Introduction

Revision 11-1; Effective May 11, 2011


1100 Role of the Texas Department of Aging and Disability Services (DADS)

Revision 08-1; Effective November 12, 2008  


DADS staff work directly with Medicaid hospice providers in the following areas:

  • Conduct audits on contracts with hospice providers.
  • Issue Medicaid contracts to hospice providers that have met the Medicaid contract requirements.
  • Authorize hospice services based on the receipt of the individual's required hospice eligibility documents. DADS must receive these documents before hospice payments can be made.
  • Conduct on-site visits to each hospice provider to ensure contract requirements are met and determine if the quality of care being given meets state and federal standards and is appropriate for each individual's particular need.
  • Determine reimbursement rates for hospices based on the wage index set by the Centers for Medicare and Medicaid Services.


1200 Participation in Medicaid and/or Medicare

Revision 08-1; Effective November 12, 2008  



The Department of Aging and Disability Services (DADS) Home and Community Support Services Agencies (HCSSA) section is responsible for the state licensure and for the Centers for Medicare and Medicaid Services Medicare certification of hospice agencies. DADS uses federal Medicare hospice regulations as the basis for Texas hospice licensure and certification and for subsequent annual surveys. Home health agencies with a hospice service designation, and any agency/facility that calls itself a hospice that is not fully licensed and Medicare certified as a hospice agency, are not eligible to participate in the Medicaid Hospice Program.

Dually Certified

Dually certified providers participate in both the Medicaid and Medicare Hospice Programs. Dually certified providers must be certified under both programs and adhere to both Medicare and Medicaid requirements. Providers must be licensed and Medicare certified to become a Medicaid provider.

Medicaid hospice is an optional benefit as outlined under the Social Security Act, §1902 (a)(10)(A)(i)-(vii). DADS Community Services Contracts is responsible for Medicaid contracting. A provider agency must follow rules and guidelines that comply with all applicable state and local laws. Providers are responsible for becoming familiar with the following regulations and guidelines:

  • State Operations Manual, Chapter 2, Section 2082, Election of Hospice Benefit by Resident of SNF, NF, ICF/MR or Non-certified Facility
  • State Medicaid Manual, Section 4305, Hospice Services
  • 42 Code of Federal Regulations, Chapter 418, Hospice Care
  • 40 Texas Administrative Code (TAC), Chapter 49, Contracting for Community Care Services
  • 40 TAC, Chapter 30, Medicaid Hospice Program
  • 40 TAC, Chapter 97, Home and Community Support Service Agencies
  • 1 TAC, Chapter 371, Subchapter C, Utilization Review, §371.212 and §371.214.

In addition, the following provider rules address hospice services:

  • 40 TAC, Chapter 19, §19.1926 Medicaid Hospice
  • 40 TAC, Chapter 9, Subchapter E, Division 9, §274 Hospice Services.

All state rules can be accessed at: www.dads.state.tx.us/rules/tac.html.


1300 Medicaid/Medicare Fraud

Revision 06-2; Effective December 12, 2006  


Section 1909 of the Social Security Act explicitly states the penalties applied to providers that commit certain fraudulent acts in the administration of Medicaid programs. DADS urges providers to become familiar with this section of the act and abide by it. Providers involved in fraudulent practices are subject to review, fraud referral, and/or administrative sanctions that could result in withholding of vendor payments, termination or suspension of Medicaid contracts. The Attorney General's office investigates suspected Medicaid provider fraud that could result in a felony conviction. The following are examples of activities that may result in administrative sanctions against providers such as vendor hold, termination, or suspension from the Medicaid program:

  • presenting any false or fraudulent claim for services or merchandise;
  • submitting false information to obtain greater compensation than the provider is legally entitled;
  • submitting false information to meet Medicaid contracting requirements;
  • failing to disclose and/or make available upon demand to DADS or its authorized agent records of services provided to Medicaid recipients and of payments made for those services;
  • failing to comply with the terms of the Medicaid provider contract;
  • rebating or accepting a fee or portion of a fee or charge for a Medicaid recipient referral;
  • being excluded from Medicare because of fraudulent or abusive practices;
  • charging individuals for Medicaid-allowable services over and above that paid by DADS, except when specifically allowed by DADS;
  • failing to correct deficiencies in provider operations after receiving written notice of the deficiencies from DADS;
  • being convicted of a criminal offense relating to performance of a provider agreement with the state;
  • failing to repay or make arrangements to repay identified overpayments;
  • failing to abide by applicable civil rights statutes.

Report knowledge of suspected Medicaid fraud or abuse of provider services to:

Medicaid Program Integrity
Health and Human Services Commission
P.O. Box 13247
Austin, TX 78711-3247

Arrangements between NFs and hospice providers are vulnerable to fraud and abuse practices. National trends include health care fraud and potential violations of the Medicare anti-kickback statute, both of which can influence the referral of NF residents for hospice services. Report suspected fraud involving NFs and hospices to:

Centers for Medicare and Medicaid Services
Regional Office of Inspector General
U.S. Department of Health and Human Services
1301 Young Street, Room 833
Dallas, TX 75202


Department of Health and Human Services
Office of Inspector General
P.O. Box 23489, L'Enfant Plaza Station
Washington D.C., 20026-3489


1400 Services Not Covered by Medicaid Hospice

Revision 11-1; Effective May 11, 2011  

Texas Medicaid & Healthcare Partnership (TMHP) pays for Medicaid services unrelated to the terminal illness. Unrelated Medicaid services include, but are not limited to, lab and x-ray, and physician services regardless of hospice status. TMHP pays non-hospice providers directly for services to an individual receiving Medicaid hospice. Non-hospice providers must submit claims to TMHP with documentation from the hospice that indicates billed services are not related to the terminal illness or that the individual was discharged from the hospice at the time services were rendered. If an individual was discharged at the time of service, the non-hospice provider obtains a copy of Form 3071, Individual Election/Cancellation/Update, from the hospice to support the claim of discharge.

In accordance with Section 2302 of the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148), individuals under 21 years of age are not required to waive Medicaid payment for treatments related to the terminal illness. Non-hospice providers rendering treatment for the terminal illness or related conditions are not required to submit documentation to indicate whether the services provided are related or unrelated to the terminal illness when the individual is under 21 years old.

Refer to TMHP's Texas Medicaid Provider Procedures Manual for further information about Medicaid services. Providers can call the TMHP Customer Service Department at 800-925-9126 or 512-514-3000 for general inquiries about the Medicaid program.



1500 Grievances and Complaints

Revision 06-2; Effective December 12, 2006  


Providers must inform individuals and families of their right to file complaints with DADS. Complaints may be reported to DADS at 800-458-9858.