FY 2027 CMS Proposed Hospice Rule

What You Need to Know — and Why It Matters

Late last week, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the Fiscal Year (FY) 2027 Hospice Wage Index and Payment Rate Update. This rule, published in the Federal Register today, on April 6 th 2026, under CMS-1851-P, will shape how hospices are paid, how they are measured, and how they are held accountable. These changes will begin at the start of the hospice fiscal year, October 1, 2026. Whether you run a small community-based hospice or a large multi-site organization, this rule has significant financial and operational implications. Below is a plain-language breakdown of every major proposal, what it means for your team, and what you should do now.

OVERALL FINANCIAL IMPACT

+$785 Million

Estimated increase in total Medicare payments to hospices in FY 2027

PART 1: FINANCIAL CHANGES — THE BOTTOM LINE

Payment Rate Update: +2.4%

CMS is proposing a 2.4% payment update for FY 2027 across all four levels of hospice care. Here’s how that

breaks down:

$236.56/day

Routine Home Care (Days 1–60)

$186.53/day

Routine Home Care (Day 61+)

$1,232.71/day

General Inpatient Care (GIP)

$546.46/day

Inpatient Respite Care (IRC)

Continuous Home Care (CHC) is proposed at $1,728.02 for a full 24-hour period, or $72.00 per hour.

WARNING: Quality Reporting Non-Compliance = Rate Cut

Hospices that fail to meet quality data submission requirements will receive a negative update of -1.6% instead - a 4-percentage-point penalty off the base rate. That means:

• RHC Days 1–60 would drop from $236.56 to $227.32 per day

• GIP would drop from $1,232.71 to $1,184.56 per day

This is not hypothetical. In FY 2026, over 20% of hospices were non-compliant. Non-compliance has a real financial cost — and now it’s also visible to the public (see Quality Reporting section below).

Aggregate Cap Amount for FY 2027

The proposed per-beneficiary aggregate cap — the maximum amount Medicare will pay per patient in a 12-month period is:

FY 2027 PROPOSED HOSPICE CAP

$36,210.11 per beneficiary

Up from $35,361.44 in FY 2026 (a 2.4% increase). Hospices that exceed this cap must repay the difference to Medicare.

If your hospice has long lengths of stay or a high patient census, monitor your cap exposure closely as the year progresses.

Service Intensity Add-On (SIA) Payment

The SIA payment — which compensates for registered nurse or social worker visits in the last 7 days of life — continues. The budget neutrality factor for FY 2027 is 0.9999, meaning it is essentially unchanged. The SIA is calculated at the CHC hourly rate multiplied by hours of skilled care (up to 4 hours per day), ensuring hospices are compensated for intensive care at end of life.

PART 2: CMS’S BIG CONCERN — NON-HOSPICE SPENDING IS SKYROCKETING

CMS is sounding a loud alarm about the dramatic increase in Medicare spending on non-hospice services for patients who are actively enrolled in hospice. This is one of the most significant sections of the rule and carries major program integrity implications.

$790M (2020)

Non-hospice Part A & B spending during hospice

$2.07B (2024)

Non-hospice Part A & B spending during hospice

+160%

Increase in just 4 years (2020–2024)

$813M

Additional Part D drug spending outside hospice in FY 2024

CMS is particularly concerned about:

• Skin substitute billing during hospice (grew nearly 4,000% from $18M in 2020 to $714M in 2024)

• Carrier/physician supply billing growing 317.5% since 2020

• For-profit hospice patients having 167% higher non-hospice spending per day than non-profit hospice patients

• 30% of non-hospice spending linked to Alzheimer’s/dementia/Parkinson’s diagnoses — which should largely be covered by the hospice

CMS views this spending pattern as possible evidence of cost-shifting, inadequate care coordination, and failure to provide “virtually all care” needed by hospice patients. This is a compliance and program integrity warning, not just a data footnote.

The New Hospice Scorecard: The Service & Spending Variation Index (SSVI)

CMS has developed a brand-new scoring tool called the Service and Spending Variation Index (SSVI), which is a modified version of the current claims-based Hospice Care Index (HCI) score. Think of it as a report card for your hospice based on claims data. Every hospice will receive a public SSVI score from 0 to 16.

The SSVI is built from 9 metrics:

• Providing no Continuous Home Care or General Inpatient Care (a red flag for minimal service provision)

• High percentage of RHC days in a nursing facility (≥40%)

• Low percentage of last 2 days of life with skilled visits

• High live discharge rate (≥47.5% in FY 2025)

• High percentage of stays over 180 days (≥33.2% in FY 2025)

• Low skilled nursing minutes per RHC day (≤9.8 min/day in FY 2025)

• Low percentage of weekend RHC days with a skilled visit (≤4.8% in FY 2025)

• High percentage of live discharges with return to same hospice within 7 days (≥15%)

• Non-hospice spending level (scored on a scale of 1–8 based on total dollar amount)

A higher score signals more concern. CMS will use SSVI scores to target hospices for medical review, education, and potential investigations. SSVI scores for FY 2024 and FY 2025 will be posted publicly on the CMS Hospice Center website. If your score is high, you should anticipate scrutiny.

PART 3: OPERATIONAL CHANGES — WHAT’S CHANGING AT THE BEDSIDE AND IN THE OFFICE

1. Election Statement Addendum: Now Mandatory for ALL Patients at Admission

Currently, hospices only need to provide the Election Statement Addendum when a patient or family member requests it. Starting October 1, 2026, CMS proposes making it mandatory for every single hospice admission.

What does the addendum include?

• A list of all conditions, items, services, and drugs the hospice will NOT cover because they are deemed unrelated to the terminal illness

• A written clinical explanation of why those items are not covered

• The patient’s right to seek immediate advocacy through their BFCC-QIO if they disagree

Timeline under the proposal:

• Must be provided within the first 5 days of the hospice election

• Updates required within 3 days any time the plan of care changes and affects covered/non-covered determinations

• Must be made available to non-hospice providers and Medicare contractors

Why is CMS doing this? Because very few patients have ever asked for the addendum under the voluntary system, and non-hospice spending keeps rising. CMS believes upfront transparency will reduce fragmented care and inappropriate cost-shifting. CMS estimates a net provider burden reduction of $20.8 million and a non-hospice provider burden reduction of $40.6 million from this change.

2. Who Can Sign a Discharge Order? Expanded Authority

Currently, only the Hospice Medical Director can sign a physician’s discharge order. The proposed rule expands this to include:

• The Hospice Medical Director (unchanged)

• A Physician Designee (when the Medical Director is unavailable)

• A Physician Member of the Interdisciplinary Group (IDG)

This is a practical fix that aligns discharge authority with the existing rules on certification and admission, which already allow these three physician roles. It adds operational flexibility, especially for after-hours and weekend discharges.

3. Telehealth Face-to-Face Encounter: Extended but With New Restrictions

The Consolidating Appropriations Act (CAA), 2026 extended the ability to conduct hospice recertification face-to-face encounters via telehealth through December 31, 2027. However, there are important new restrictions:

• Starting January 31, 2026: Telehealth face-to-face encounters are PROHIBITED for patients in areas under a FEDERAL hospice enrollment moratorium. (NOTE: this is NOT state based licensure moratorium, but a CMS moratorium. Currently, there are not any states under this level of moratorium.)

• Telehealth face-to-face encounters are PROHIBITED if the patient’s hospice is under enhanced CMS oversight

• Telehealth face-to-face encounters are PROHIBITED if conducted by a physician or NP who is not enrolled in Medicare or who has opted out in PECOS

• Starting January 1, 2027: Hospice claims must include a new G-code to identify that the face-to-face was conducted via telehealth (more information from your MACs and CMS to come on this in the future!)

Action item: Update your billing and compliance processes now. If you ever are in a geographic area under a CMS federal moratorium or your hospice is under enhanced oversight, your clinical staff must conduct in-person face-to-face encounters for recertification. This will need to be clearly documented in your policies and procedures.

PART 4: QUALITY REPORTING — NEW VISIBILITY ON MEDICARE.GOV

Public Reporting of Non-Compliance: A New Icon on Care Compare

Starting no earlier than FY 2028 (October 2027), CMS proposes adding a visible icon on the Medicare.gov Care Compare tool that flags hospices that have failed to meet quality reporting requirements.

The icon will appear if your hospice:

• • Fails to submit any data, OR

• • Submits fewer than 90% of HOPE assessments within 30 days

The icon will appear prominently on both the provider search results page and your hospice’s individual profile page — visible to any patient or family member searching for hospice care. This is a reputational risk as much as a financial one. Current non-compliance rates make this urgent. In FY 2025, 23.5% of hospices were non-compliant. If you are in that group, families will now be able to see it.

HOPE Assessment: Waiver for first quarter timeliness!

The Hospice Outcomes and Patient Evaluation (HOPE) assessment tool — which replaced the Hospice Item Set (HIS) — went live October 1, 2025. CMS granted a waiver for Q4 2025 submissions (Oct–Dec 2025), so those assessments are considered timely. Starting January 1, 2026, the clock is fully running and your 90% on-time submission rate is being tracked.

• FY 2027 APU is based on CY 2025 data (Jan 1, 2025 – Dec 31, 2025)

• Public reporting of HOPE quality measures expected to begin November 2027

PART 5: REQUESTS FOR INFORMATION (RFIS) — CMS IS LISTENING

CMS is soliciting input on three important areas that could become future regulations. These are your opportunities to shape policy. Comment before the deadline!

RFI #1: Community Palliative Care

CMS is asking how Medicare can better support palliative care for patients who are seriously ill but NOT yet on hospice. They want to know:

• How providers currently bill for palliative services (E/M codes, ACP codes, etc.)

• What services are being provided but can’t be billed under Medicare’s current structure

• What changes could expand access without requiring new legislation

This is a future-shaping moment for hospice and palliative care providers. Your voice here matters.

RFI #2: Hospice-Specific Wage Index

CMS is exploring replacing the hospital-based IPPS wage index with a hospice-specific wage index using Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) data. This is significant because many hospices, particularly in rural areas and states with high non-profit concentrations, feel the current index underrepresents their actual labor costs. CMS held a Technical Expert Panel in September 2025 and is now soliciting broader comment.

RFI #3: Medical Aid in Dying (MAID) and Hospice

As more states pass MAID legislation, CMS is asking how hospices navigate this overlap — including whether hospices continue care while a patient pursues MAID, what happens at the time a patient utilizes MAID, and whether hospices have written MAID policies. CMS is not proposing new rules yet, but the questions are pointed. Hospice leaders should review their current policies now.

WHAT HOSPICE LEADERS SHOULD DO NOW: ACTION CHECKLIST

Immediate (Now through Summer 2026)

✔ Calculate your projected FY 2027 revenue impact using the 2.4% rate update and compare to your current budget

✔ Review your aggregate cap position for FY 2026 and model FY 2027 cap exposure, especially if you have patients with long lengths of stay

✔ Pull your current SSVI metrics from your claims data before CMS posts your score publicly — know your number before your patients’ families do, and investigate those areas that your agency is struggling with operationally for root cause and make changes where appropriate to improve these areas.

✔ Audit your Election Statement Addendum process now and build a workflow to make it mandatory for every admission as of October 1, 2026

✔ Review and update your telehealth face-to-face policies and use. Inform billing of new G code to come and monitor information from your MAC on these change that is still forthcoming

✔ Currently, there are no CMS Federal moratoriums. Continue to monitor whether your geographic area is under any CMS moratorium or enhanced oversight that would prohibit telehealth face-to-face encounters

✔ Submit a public comment on the proposed rule (deadline is approximately 60 days from April 6, 2026)

Quality Reporting (Now — This Is Urgent)

✔ Verify that your HOPE assessment submission rate is at or above 90% on-time for the FY 2027 APU period (CY 2025 data)

✔ If you are below 90%, implement a corrective action plan immediately — your financial penalty and your public reputation are at stake

✔ Ensure CAHPS survey participation is ongoing and you are using a CMS-approved vendor, or have filed an exemption request

✔ Begin planning for public reporting of HOPE measures starting November 2027

Strategic Planning (Now through End of 2026)

✔ Be fully aware and ask questions regarding patient use of outside healthcare resources. Conduct an internal audit of non-hospice spending patterns for your patients and identify any areas of concern before CMS does

✔ Use PEPPER data as soon as it becomes available from CMS this year

✔ Review documentation and decision practices around related vs. unrelated conditions — this is the foundation of the mandatory addendum

✔ Engage your IDG in reviewing which diagnoses and comorbidities are being listed as unrelated, and whether those determinations are clinically sound

✔ Consider submitting formal RFI comments on the hospice-specific wage index if you believe your labor market is poorly represented by the current IPPS index

✔ Develop or update a written organizational policy on MAID, especially if you operate in a state where it is permitted

COMMENT DEADLINE

June 5, 2026

Submit comments at regulations.gov/docket/CMS-2026-1156 or by mail to CMS, Attention: CMS-1851-P.

Reference file code CMS-1851-P in all submissions.