For the first time in California’s history, hospice agencies have become subject to comprehensive hospice-specific licensing regulations adopted on an emergency basis and effective June 22, 2026. The California Department of Public Health’s (“CDPH”) emergency regulations add Title 22, California Code of Regulations (“CCR”), sections 74800 through 74908,[1] to address serious hospice fraud and abuse concerns identified by the California State Auditor in a 2022 report[2] and CDPH’s determination that immediate action was needed to protect patient health and safety.[3] The new regulations apply to both existing licensees and new applicants, add significant new requirements for CDPH approval of transactions and other operational changes, such as the licensee’s physical location, and authorize CDPH to conduct unannounced inspections to verify compliance. Providers would benefit from reviewing their operations against the new requirements below.
Current Moratorium
The emergency regulations are accompanied by a continuing moratorium on new hospice licenses. The moratorium originated with SB 664 (2021),[4] enacted in response to the California State Auditor’s findings of widespread fraud and abuse in the hospice industry, including administrators overseeing as many as 27 agencies, agencies operating without signage or qualified personnel, and licenses being obtained solely for resale. AB 177 (2024)[5] subsequently extended the moratorium, setting it to expire on January 1, 2027, or 1 year after the adoption of emergency regulations, whichever is sooner. Accordingly, the moratorium is now expected to lift on January 1, 2027. Prospective hospice operators seeking licensure must account for this restriction when evaluating entry into the California market, and existing licensees should recognize that the moratorium underscores CDPH’s heightened scrutiny of the industry during this period.
Geographic Service Areas and the Two-Hour Travel Standard
To respond to concerns about response times and quality of care, Section 74820 establishes a geographic service area framework built around a specific response standard: a hospice must guarantee that a licensed nurse will appear in person, 24 hours a day, 7 days a week, within 2 hours after receiving information that a patient within the geographic service area has a medical need or that a safety concern exists.[6] The service area calculation requires hospices to document actual commute times during peak traffic windows on non-holiday weekdays, take at least 4 samples, and submit proof with timestamps showing that personnel can reach the proposed geographic service area within 2 hours from the parent agency’s address.
Beyond the travel time standard, service areas may only include counties where an unmet need for hospice services exists, determined by comparing the estimated number of likely-eligible patients in a county to existing licensed hospice capacity. Each county must be individually approved in writing by CDPH before the hospice may initiate, advertise, or provide services there. A hospice may not accept a patient whose primary residence is outside its approved geographic service area. Providers who have historically enrolled patients across broadly defined regions should review their current service area documentation against these standards.
Staffing Ratios and Care Planning
The regulations establish statewide staffing ratios and require hospices to provide staffing by licensed nurses 24 hours a day, 7 days a week. A licensed nurse, whether a registered nurse or licensed vocational nurse, may be assigned no more than 12 patients at any one time. Hospices must also implement a patient acuity system that predicts care needs and validates required nursing time, reviewed at least annually by a committee that includes direct-care registered nurses, with adjustments implemented within 30 days of identified issues.
Patients may only be admitted to hospice on physician orders and require initial certification of the patient’s terminal illness by the hospice Medical Director or designee in consultation with the attending physician, with specific signature and dating requirements. The certification must include a patient-specific narrative supporting a prognosis of 1 year or less and must be filed in the medical record. California’s definition of terminal illness uses a 1-year prognosis under Health and Safety Code section 1746(p), which differs from the federal 6-month standard for Medicare coverage and payment, and providers must follow the state definition when certifying a patient for hospice admission.[7] A registered nurse must complete an initial assessment within 48 hours of admission in the location where services will be delivered, and an interdisciplinary team must complete a comprehensive assessment within 5 days. The comprehensive assessment must be reviewed and updated at least every 15 days. Plans of care must likewise be reviewed and updated at least every 15 days, with written documentation, physician collaboration, and all versions retained in the medical record.
Management Personnel Qualifications and Limitations
The regulations limit the number of hospice agencies a single Hospice Administrator, Director of Patient Care Services, or Medical Director may oversee. Administrators and Directors of Patient Care Services are generally limited to 1 hospice, with a narrow rural exception permitting oversight of up to 2 agencies in the same rural county, defined as a county with a population under 150,000. Medical Directors are also generally limited to 1 hospice, with a rural exception permitting supervision of up to 3 agencies. All 3 roles are subject to a 7-year disqualification period for specified disciplinary history, including fraudulent billing, fabricated service addresses, improper eligibility determinations, felony convictions, privacy law violations, and abusive or negligent conduct. Vacancies in any of these roles must generally be filled within 60 days; extensions require documented recruitment efforts and a signed attestation that patient health and safety will not be compromised during the vacancy.
First-time management personnel (individuals who have never served in a management role at a California hospice) must complete 24 hours of educational training or a hospice certification program within 12 months of hire, as well as any applicable role-specific training or certification requirements. All management personnel must complete 20 hours of new hire orientation within 60 days and 12 hours of annual training covering core hospice requirements, regulatory updates, patient care standards, fraud prevention, and controlled substance management. Management personnel employed prior to June 22, 2026 are exempt from the new hire orientation training requirement. Training records must be retained and available to CDPH upon request.
Changes of Ownership
Pursuant to Health and Safety Code section 1748(f), an applicant may only apply for a change of ownership within the first 5 years from the date the license was initially issued if the current licensee can demonstrate to CDPH that the change is necessary to ensure continuity of care due to emergency conditions, limited resources and capacity, or financial hardship, and provided the hospice is operational and currently providing care to patients.[8]
The regulations now provide that in addition to the initial 5-year prohibition on changes of ownership, the 5-year clock resets – i.e., there will also be a new 5-year prohibition on change of ownership – any time a change of ownership is approved by CDPH. This represents a significant new restriction that prospective buyers and sellers of hospice entities must carefully account for. The narrow exceptions for emergency conditions, resource limitations, or financial hardship are the only avenues available during that 5-year window, and each requires submission of substantial supporting documentation to CDPH.
Ownership Transactions and CDPH Approval of Changes of Information
Section 74824 requires pre-closing CDPH approval for ownership transactions meeting specified thresholds.[9] A change of ownership (“CHOW”) includes major transfers of 50% or more beneficial ownership, certain nonprofit transactions, partnership changes, mergers creating a new entity, and transfers causing the licensee to lose control or occupancy of the operating property. A change-of-ownership application must be submitted at least 120 days before the anticipated transaction date, and the transaction is not effective unless and until CDPH approves it. The current licensee must not relinquish ownership, operation, or management until CDPH grants that approval.
Transfers of indirect ownership or transfers of beneficial ownership of more than 5% but less than 50% similarly require an application and written CDPH approval before implementation. Providers and their transaction counsel should account for these timelines when structuring deals, as failure to obtain pre-closing approval may result in license revocation.
Other reporting requirements for licensees include:
- Changes in geographic service area must be reported 120 days in advance;
- Changes to location, services, or suspension of optional services must be reported 60 days in advance; and
- Changes to management personnel, governing body (e.g. Board of Directors), Medicare/Medi-Cal Certification status, name, mailing address, or property owner must be reported within 10 business days after the change has occurred.
Physical Office Requirements: Exclusive Commercial Space
Section 74908 codifies CDPH’s requirement for a licensed hospice agency to maintain an established place of business consisting of unshared office space in a commercial building that is owned by the licensee or leased or subleased exclusively by the licensee for at least 12 consecutive months.[10] Coworking arrangements and personal residences do not satisfy this requirement. The regulation further specifies that the hospice’s office must have permanently attached interior and exterior signage displaying the hospice’s name and posted business hours, a professional telephone line answered 24 hours a day and 7 days a week, appropriate administrative personnel during business hours, and secure storage for patient medical records, medications, controlled substances, and personnel records. CDPH surveyors will verify these conditions during inspections.
Application Requirements
The emergency regulations establish detailed application requirements for initial licensure, reinstatement, location additions, and other specified changes. Applications must be submitted on current CDPH forms with all required fees, and a hospice may not admit patients, advertise, or begin services until CDPH issues the license. The application package must include a cover letter with basic identifying information and supporting documentation addressing legal identity and business structure, organizational charts, affiliated facilities, disciplinary and Medicare/Medi-Cal history, proof of at least 90 days of operating funds, property control documents, insurance coverage, a hospice service plan, ownership and management disclosures, and geographic service area documentation. Applications must be signed by an authorized individual, a copy must be retained, and any additional information requested by CDPH must be provided within 60 days or the application will be deemed incomplete.
What Providers Should Do Now
Because these emergency regulations were adopted through an expedited process and became effective immediately, providers should treat them as a new compliance baseline rather than a proposal to be addressed later. This means conducting a prompt gap analysis against all sections of Title 22, CCR, sections 74800 through 74908.[11] Hospice providers should also bear in mind that California’s state licensing requirements operate in addition to federal Medicare Conditions of Participation (“CoPs”) and Medicare enrollment requirements. CMS’s 6-month nationwide enrollment moratorium on Medicare enrollment for new hospice agencies remains in effect through at least November 13, 2026.
CDPH has described these emergency regulations as a bridge to stronger ongoing oversight during the moratorium period, intended to distinguish legitimate hospices from fraudulent or substandard operators through more stringent licensing, staffing verification, and enforceable care standards. Providers who take these regulations seriously now will be better positioned as CDPH moves toward permanent rulemaking.
FOOTNOTES
[1] Cal. Code Regs. tit. 22, §§ 74800–74908.
[2] See Cal. State Auditor, California Hospice Licensure and Oversight: The State’s Weak Oversight of Hospice Agencies Has Created Opportunities for Large-Scale Fraud and Abuse 2021-123 (Mar. 29, 2022).
[3] See Cal. Dep’t Pub. Health, Finding of Emergency: Emergency Regulations for Hospice Agencies (DPH-18-002E) (June 1, 2026).
[4] See Cal. Health & Safety Code § 1751.70.
[5] See CA LEGIS 999 (2024), 2024 Cal. Legis. Serv. Ch. 999 (A.B. 177).
[6] See Cal. Code Regs. tit. 22, § 74820.
[7] See Cal. Health & Safety Code § 1746(p).
[8] See Cal. Health & Safety Code § 1748(f).
[9] See Cal. Code Regs. tit. 22, § 74824.
[10] See Cal. Code Regs. tit. 22, § 74908.
[11] Cal. Code Regs. tit. 22, §§ 74800–74908.