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

Administration Fraud, waste, & abuse Hospices Share Fiscal Year (FY) 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Proposed Rule (CMS-1851-P) On April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule (CMS-1851-P) that would update Medicare hospice payments and the aggregate cap amount for fiscal year (FY) 2027 in accordance with existing statutory and regulatory requirements. This proposed rule also includes an analysis of Medicare non-hospice spending under a hospice election, including details regarding a hospice service and spending variation index (SSVI). The SSVI includes a comprehensive scoring system that is calculated using nine claims-based measures, each representing different aspects of hospice utilization as well as non-hospice spending, that identifies hospice providers for increased transparency and oversight. This rule also proposes changes to the hospice election statement regulations by proposing to require the addendum to be mandatory for all Medicare beneficiaries at the time of hospice election. Additionally, this rule proposes conforming regulation text changes to 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 proposes conforming regulation text changes to the hospice telehealth face-to-face policy in accordance with the Consolidated Appropriations Act, 2026. This proposed rule also includes requests for information on enhancing community palliative care services under current Medicare benefits; the development of a hospice-specific wage index using BLS data; and information regarding the overlap between hospice and assisted suicide or “medical aid in dying.” Finally, this rule proposes adding an icon identifying hospice facilities on the Medicare.gov Compare Tool that have failed to meet Hospice Outcomes and Patient Evaluation (HOPE) reporting requirements for the Hospice Quality Reporting Program (HQRP). FY 2027 Routine Annual Rate Setting Changes For FY 2027, CMS proposes to update the hospice payment rate by 2.4% (an estimated increase of $785 million in payments from FY 2026). This results from the proposed 3.2% inpatient hospital market basket percentage increase reduced, as required by law, by a proposed 0.8 percentage point productivity adjustment. The proposed FY 2027 rates for hospices that do not submit the required quality data would reflect the proposed FY 2027 hospice payment update percentage of 2.4% minus four percentage points as required by law, which would result in a 1.6% reduction over the previous year’s payment rate. These proposed 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 which limits the overall payments made to a hospice annually. The proposed hospice cap amount for FY 2027 is $36,210.11 (FY 2026 cap amount of $35,361.44 increased by the FY 2027 hospice payment update percentage of 2.4%). Service and Spending Variation Index With the growing concern of fraud, waste, and abuse around 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 included identifying patterns of hospice care delivery and associated non-hospice spending per hospice day. The comprehensive nature of the services covered under the Medicare hospice benefit is structured so that hospice beneficiaries would not have to routinely seek items, services, and 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 who are approaching the end of life, and CMS has reiterated since 1983 that “virtually all” care needed by the terminally ill individual 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 potential inappropriate utilization, quality of care, or compliance concerns. The SSVI uses a scoring system, with a higher score representing potential concerning hospice utilization and non-hospice spending. CMS is soliciting comments on the metrics and the scoring system of the SSVI. This information provides transparency into the data CMS is analyzing, can help beneficiaries make informed decisions, and can be used to help target program integrity efforts. This rule discusses the SSVI, which includes data from FYs 2024 and 2025, displays provider-level data, and includes each hospice’s SSVI score. To view the SSVI scores for FYs 2024 and 2025, additional da