This is one of those gray areas about which we get a lot of questions. As agent for your father under the durable power of attorney, your sister has the power to make financial and legal decisions on his behalf.
However, visitation is more of a personal than a financial or legal decision. You don’t say whether your sister also has a health care proxy or power of attorney for medical decision making. If so, she may have a stronger argument that she has the right to determine who may visit your father.
You may want to talk with the hospice about its policies or contact your state agency that regulates hospices to determine its policy regarding visitation.