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Hospice is called in for many reasons, but the main one here is failure to thrive. Can she care for herself, meals, bathe, general daily routines. if the answer is no, they will stay with her. Your doctor can help with his recommendations as well.
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I've never heard of that. If she actually improves, the insurance may insist that she go off of hospice until she declines again. But the time lines on Hospice are a guide. No one, including doctors, can be totally accurate in estimating the pace of decline. If you are worried, talk to the doctor. It just sounds as though hospice is doing a good job.
Take care,
Carol
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