Running a hospice in Texas means navigating a complex web of licensing requirements, insurance mandates, and regulatory standards. Unlike many other states, Texas doesn't make workers' compensation insurance mandatory—but that doesn't mean you can skip coverage. Between state licensing through the Health and Human Services Commission, Medicare certification requirements, and the practical realities of contract negotiations, you'll need several types of insurance to operate legally and protect your business.
Whether you're opening your first hospice facility or updating your current coverage, understanding what Texas actually requires versus what's just good business practice can save you thousands and keep you compliant. Let's break down exactly what insurance you need, what the state mandates look like, and where you have flexibility.
Texas Hospice Licensing: The Foundation
Before you even think about insurance, you need to understand Texas's licensing structure. Hospice providers must be licensed as Home and Community Support Services Agencies (HCSSA) under Title 26 of the Texas Administrative Code, Chapter 558. This isn't optional—you can't operate without it.
The licensing process involves completing computer-based pre-survey training, submitting a detailed application through the TULIP system, and uploading required documentation. You'll also need to be registered with the State Comptroller of Public Accounts and the Secretary of State, both in good standing. The application process alone can take several months, so start early.
Here's something that catches many new hospice owners off guard: if you plan to offer palliative care services, you'll also need a home health license. This requirement went into effect in September 2021, and Texas won't let you provide palliative care under a hospice-only license anymore.
Workers' Compensation: Texas's Unique Approach
Texas is one of the few states that doesn't require most employers to carry workers' compensation insurance. As a hospice provider, you can legally choose not to carry it. But before you celebrate those premium savings, understand what you're giving up.
If you opt out of workers' comp, you lose the protections that come with it—mainly, the legal immunity from employee lawsuits. A hospice nurse who injures their back lifting a patient can sue you directly for damages, medical bills, lost wages, and pain and suffering. With workers' comp, you'd pay the claim through insurance and avoid court entirely. Without it, you're exposed to potentially devastating lawsuits.
You must notify every employee whether you carry workers' compensation coverage. This notification happens when you hire them, through posted notices in visible workplace locations, and whenever your coverage status changes. It's not just good practice—it's the law. For hospice workers classified under Code 8828 (Home Health Care—All Other Employees), workers' comp provides crucial protection in an industry with significant physical demands and patient-handling risks.
Most Texas hospice providers carry workers' comp despite not being required to. It's simply too risky to operate without it when your staff regularly handles patients, administers medications, and works in home environments you don't control.
General Liability and Professional Liability Coverage
Here's where things get interesting. Texas doesn't specify minimum general liability insurance amounts for hospice licensure at the state level. The Texas Administrative Code Chapter 558 sets operational standards, staffing requirements, and care protocols—but it doesn't mandate specific dollar amounts for liability coverage.
That said, you'll need coverage anyway. Medicare certification, Medicaid contracts, and commercial payer agreements almost always require proof of liability insurance. Industry standards typically call for $1 million per occurrence and $3 million aggregate for general liability. Professional liability (malpractice) coverage follows similar limits.
Professional liability insurance protects you when things go wrong in patient care—medication errors, miscommunication with families about advance directives, or allegations of inadequate pain management. End-of-life care involves complex medical decisions, difficult family dynamics, and emotionally charged situations. A single claim can easily exceed $1 million once you factor in legal defense costs, settlements, and potential judgments.
General liability covers different risks—slip-and-fall accidents when your staff visits patient homes, property damage from medical equipment, or injuries to family members during care. Both types of coverage are essential, and most hospice insurers offer them together in specialized packages designed for end-of-life care providers.
Accreditation and Medicare Certification Requirements
If you want to serve Medicare patients—and you probably do, since Medicare covers most hospice care—you'll need Medicare certification. This involves signing a Health Insurance Benefit Agreement (CMS 1561) and meeting federal conditions of participation that often exceed Texas state requirements.
Texas recognizes accreditation from organizations like The Joint Commission and the Community Health Accreditation Program (CHAP). If you're accredited by one of these bodies, Texas may waive certain state survey requirements, saving you time and regulatory headaches. But here's the catch: these accreditation organizations typically require specific insurance coverage as part of their standards.
You'll need to submit documentation from your accrediting body when applying for your initial Texas license and again annually at renewal. This creates a practical requirement for insurance even though the state doesn't mandate specific amounts—your accreditation body does it for them.
Practical Insurance Recommendations for Texas Hospice Providers
Based on current market standards and contract requirements, plan for these insurance minimums when budgeting for your Texas hospice:
General liability at $1 million per occurrence and $3 million aggregate will satisfy most contract requirements. Professional liability should mirror these limits. Even though Texas doesn't require workers' compensation, carry it anyway—the legal exposure without it is simply too high. Commercial auto insurance is essential if staff drive to patient homes, and cyber liability coverage is becoming increasingly important as you handle protected health information electronically.
Work with an insurance broker who specializes in hospice and home health coverage. They'll understand the unique risks you face—from controlled substance management to family disputes over care decisions—and can structure policies that actually protect you rather than just checking boxes for licensure.
Getting Started: Your Action Plan
Start your licensing process early—the HCSSA application through Texas Health and Human Services takes time, and you can't operate without approval. While you're waiting on licensure, get quotes from insurers who specialize in hospice coverage. Generic business insurance won't cut it; you need policies designed for end-of-life care providers who understand your specific exposures.
Texas gives hospice providers more flexibility than many states when it comes to insurance requirements, but that flexibility comes with responsibility. While the state won't force you to carry certain coverages, the practical realities of Medicare certification, contract negotiations, and lawsuit exposure mean you'll need comprehensive insurance anyway. Build it into your business plan from day one, and you'll operate with confidence knowing you're protected when families trust you with their loved ones' final days.
