Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule (CMS-1851-F)

Coverage Hospices Policy Share Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule (CMS-1851-F) On July 30, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a final rule (CMS-1851-F) that would update Medicare hospice payments and the aggregate cap amount for fiscal year (FY) 2027 under existing statutory and regulatory requirements. This final rule also highlights Medicare non-hospice spending under a hospice election, using data from the hospice service and spending variation index (SSVI). The SSVI includes a comprehensive scoring system calculated using nine claims-based measures, each representing a different aspect of hospice utilization as well as non-hospice spending. These data indicate hospice providers that might need additional targeted education and oversight. This rule also finalizes changes to the hospice election statement regulations; these regulations require hospices to provide to all Medicare beneficiaries, at the time of hospice election, an addendum to the election statement regarding coverage of non-hospice services. Additionally, this rule finalizes conforming regulation text changes that allow a physician designee and the physician member of the interdisciplinary group, in addition to the hospice medical director, to discharge a patient from hospice care, which will help improve flexibility for hospices and reduce regulatory burden. This rule also finalizes conforming regulation text changes to the hospice telehealth face-to-face policy under the Consolidated Appropriations Act, 2026. The final rule includes a summary of comments from requests for information on enhancing community palliative care services under current Medicare benefits; developing a hospice-specific wage index using BLS data; and describing any experiences with overlap between hospice and assisted suicide or “medical aid in dying.” FY 2027 Routine Annual Rate Setting Changes For FY 2027, CMS updated the hospice payment rate by 2.3% (an estimated increase of $755 million in payments from FY 2026). This figure results from the finalized 3.2% inpatient hospital market basket percentage increase reduced, as required by law, by a finalized 0.9 percentage point productivity adjustment. The finalized FY 2027 rates for hospices that do not submit required quality data information include the finalized FY 2027 hospice payment update percentage of 2.3% minus four percentage points as required by law, which would result in a 1.7% reduction over the previous year’s payment rate. These finalized payment rates reflect the most accurate, updated data available on the cost of goods, services, and labor. Hospice payments are subject to a statutory aggregate cap limiting the overall payments made to a hospice annually. The finalized hospice cap amount for FY 2027 is $36,174.75 (FY 2026 cap amount of $35,361.44 increased by the FY 2027 hospice payment update percentage of 2.3%). Service and Spending Variation Index Given the growing concern of fraud, waste, and abuse in hospice care, CMS has continued to monitor trends on a variety of metrics from hospice claims, including non-hospice spending during a hospice election. CMS’ internal monitoring has identified patterns of hospice care delivery and associated non-hospice spending per hospice day. The comprehensive services covered under the Medicare hospice benefit are structured so that hospice beneficiaries do not have to routinely seek items, services, or drugs beyond those provided by hospice. CMS continues to believe that it would be unusual and exceptional to see services provided outside of hospice for those individuals approaching the end of life and has reiterated since 1983 that “virtually all” care needed by the terminally ill would be provided by the hospice. However, CMS has seen non-hospice spending continue to rise in recent years. In response, CMS developed a service and spending variation index (SSVI), using metrics collected from claims data, that can signal potentially inappropriate utilization or concerns with quality of care or compliance. The SSVI uses a scoring system, with a higher score representing potential concerning hospice utilization and non-hospice spending. This information provides transparency for CMS data analysis, can help beneficiaries make informed decisions, and could support program integrity efforts. CMS solicited comments on the metrics and the SSVI scoring system and summarizes those comments in this final rule. Additionally, this final rule discusses the SSVI, which includes data from FYs 2024 and 2025, displays provider-level data, and includes each hospice’s SSVI score. This final rule uses more recent claims data to update the SSVI, though no substantive changes to the methodology were made. To view the SSVI scores for FYs 2024 and 2025, additional data from claims-based measures, and related documentation on the methodology, visit: https://www.federalreg