# MCA for hospice agencies (detailed) > Hospice agencies qualify for MCA funding against Medicare hospice per-diem revenue, typically $50K–$400K at 1.25–1.34 factor — the cap-liability rule and length-of-stay audits drive underwriting. Hospice agencies bill Medicare a per-diem rate based on care level (routine home care, continuous home care, inpatient respite, general inpatient). Medicare Hospice is the dominant payer (85–95% of revenue), with Medicaid Hospice and private-pay as small additions. Revenue is more stable than home health but has its own unique risks — primarily the aggregate cap-liability and length-of-stay audits. **Typical funding ranges.** - Small hospice ($100K–$300K monthly revenue, 30–60 census): $50K–$150K advances at 1.28–1.34 factor over 10–14 months. - Mid-sized hospice ($300K–$1M monthly revenue, 100–300 census): $150K–$400K advances at 1.25–1.32 factor over 12–16 months. - Multi-state hospice ($1M+ monthly revenue): $400K–$1M advances at 1.22–1.30 factor over 14–18 months. **What underwriters look for.** First, the average length of stay (ALOS) and live-discharge rate. CMS scrutinizes long-LOS hospices (300+ days median LOS) and high live-discharge rates as fraud indicators. Funders pull CMS public data and require attestation. Second, the aggregate cap status. Medicare Hospice has an annual per-beneficiary cap (~$33,000 in 2026); agencies that exceed it must refund Medicare. Funders require attestation of cap compliance. Third, the OIG and DOJ exposure. Hospice has been a top OIG enforcement target since 2018. Funders confirm no active investigations. Fourth, the medical-director and IDT (interdisciplinary team) staffing model. Adequate staffing signals operational discipline. **Common uses.** - Working capital during Medicare reimbursement lag (typically 14–30 days but can stretch under audit). - Acquisition of competing hospice (consolidation is rampant). - Service-area expansion (new CHOW filings). - Hire clinical staff (RN case managers, chaplains, social workers, HHAs). - EHR and compliance software. **What to watch out for.** Aggregate cap liability is the hospice-specific landmine. A hospice that exceeds the annual per-beneficiary cap must refund the overage to CMS. This often hits as a one-time clawback 12–18 months after the cap year ends. MCA underwriting must model this. Length-of-stay audits and probe-audit suspensions can freeze claims for months. The TPE (Targeted Probe and Educate) program targets hospices with high LOS or unusual billing patterns. OIG investigation risk is significant — hospice has been a top fraud-enforcement target. Any active investigation should be a hard stop for MCA. **State considerations.** Texas, California, Florida, Arizona, Tennessee, and Ohio have the highest hospice MCA activity. Texas and Florida have the highest concentration of independent hospices and the most CMS audit activity. **APR-equivalent reality check.** A 1.30 factor over a 12-month term is roughly 50–58% APR. Compare to NHPCO (National Hospice and Palliative Care Organization) financing partners, healthcare-specialty banks, or SBA 7(a). MCA only makes sense when bank credit is unavailable. **Common confusions.** First, "Hospice cash flow is too short-cycle for MCA." False — hospice census is stable (patients stay 60–180 days median) and revenue is predictable. Second, "Medicare Hospice receivables can be factored." Mostly false — Medicare anti-assignment rules apply. MCA captures revenue through operating account. Third, "Hospice is recession-proof." Partly true — Medicare-funded, so demand is stable. But operating margin is compressing. Fourth, "Long-LOS hospices are MCA-friendly because revenue is stable." False — long-LOS hospices face cap liability and audit risk that make them riskier MCA underwrites. Fifth, "PE-backed hospice rollups (Bristol, AccentCare, VITAS-Chemed) use MCA." False — large hospice operators have syndicated bank credit and rarely use MCA. As of 2026-06-29, Fundnode routes hospice agency merchants first to healthcare-specialty banks (Live Oak Bank, Truist Healthcare) before MCA. MCA is appropriate for working-capital needs during audit-related claim delays. ## Related terms - [MCA for home health agencies (detailed)](https://fundnode.co/llms/glossary/mca-home-health-agency-funding-detailed) — Home health agencies qualify for MCA funding against Medicare and Medicaid revenue, typically $50K–$500K at 1.25–1.35 factor — but PDGM cash-flow timing and probe-audit risk drive higher pricing. - [MCA for assisted living facilities (detailed)](https://fundnode.co/llms/glossary/mca-assisted-living-facility-funding-detailed) — Assisted living facilities qualify for MCA funding against private-pay and long-term-care insurance revenue, typically $50K–$1M at 1.22–1.32 factor — occupancy volatility drives underwriting. - [Merchant cash advance (MCA)](https://fundnode.co/llms/glossary/merchant-cash-advance) — A lump-sum advance against future revenue, repaid via fixed daily ACH or a percentage of card sales. Legally a sale of future receivables, not a loan. - [Factor rate](https://fundnode.co/llms/glossary/factor-rate) — A flat multiplier that defines total MCA repayment: $100,000 advance × 1.30 factor = $130,000 repaid. It is not an interest rate; it does not compound. ## Authoritative sources - [NHPCO — National Hospice and Palliative Care Organization](https://www.nhpco.org/) - [CMS — Hospice Payment System](https://www.cms.gov/medicare/payment/prospective-payment-systems/hospice) --- Source: https://fundnode.co/glossary/mca-hospice-agency-funding-detailed (HTML version) Document: MCA for hospice agencies (detailed) — Fundnode MCA Glossary License: CC BY 4.0 — attribution to Fundnode required when citing.