Policy & Regulatory Update

CMS Proposes FY 2027 Hospice Payment Update and New Oversight Measures

The proposed rule includes a 2.4% payment update, a higher hospice cap, new transparency scoring, and workflow changes that could affect election statement addenda, discharge processes, and reporting requirements.

CMS has released the FY 2027 Hospice Wage Index Proposed Rule, outlining payment updates, operational changes, and new oversight tools that could significantly affect hospice providers beginning in late 2026 and beyond.

The proposal includes a 2.4% payment update and a proposed hospice cap of $36,210.11. It also reflects CMS’s ongoing concern about growth in non-hospice Medicare spending, which the agency says exceeded $2.8 billion in FY 2024.

A central proposal would require hospices to provide the election statement addendum to all beneficiaries beginning October 1, 2026, rather than only upon request.

Payment Update and Cap Increase

For FY 2027, CMS is proposing a 2.4% hospice payment update. The agency also proposes increasing the hospice aggregate cap to $36,210.11. While the payment update offers modest rate growth, CMS continues to pair reimbursement changes with increased scrutiny around utilization and beneficiary spending patterns.

In the proposed rule, CMS again points to sharp increases in non-hospice Medicare spending among hospice beneficiaries, framing that trend as a major policy concern and as a rationale for several new proposals.

Election Statement Addendum Would Become Standard

One of the most significant operational changes in the rule would require hospices to provide the election statement addendum to every beneficiary, rather than furnishing it only when requested. CMS proposes this change to take effect October 1, 2026.

If finalized, this would move the addendum from a conditional document to a routine part of the hospice election workflow. Agencies should begin assessing how this change would affect intake processes, staff training, documentation, timing, and compliance monitoring.

Why this matters

The proposed addendum change is not just a paperwork issue. It has direct implications for workflow design, beneficiary communication, staff accountability, and audit readiness.

New SSVI Tool Signals Expanded Transparency and Oversight

CMS is also proposing a new transparency measure called the Service and Spending Variation Index (SSVI). The tool would score hospices across nine utilization and spending metrics in an effort to identify outliers and potential program-integrity risks.

Scores would range from 0 to 16, with higher scores signaling greater variation from expected patterns. While CMS presents the SSVI as a transparency tool, agencies should view it as an early indicator of how hospice utilization trends may be publicly framed and scrutinized going forward.

Hospices should begin reviewing internal data on visit patterns, care intensity, live discharge trends, and spending relationships to better understand how they may appear under a new scoring model.

Discharge and Telehealth Reporting Changes

CMS is also proposing to allow physician designees to sign hospice discharge orders, expanding flexibility beyond the medical director. This change could help agencies streamline discharge workflows and better align documentation responsibilities with operational realities.

The proposed rule also includes updated telehealth face-to-face reporting requirements, adding another area where agencies may need to review procedures, staff roles, and documentation practices.

Quality Reporting, Public Reporting, and RFIs

The proposal includes several updates related to the Hospice Quality Reporting Program (HQRP). CMS reiterates that HOPE public reporting will begin no earlier than FY 2028, providing additional time before those data appear publicly.

CMS also proposes adding a Medicare.gov Compare icon for hospices that fail to meet quality reporting requirements, increasing the reputational stakes associated with reporting compliance.

In addition, the rule includes several Requests for Information on topics including palliative care, a hospice-specific wage index, and medical aid in dying. These RFIs may help signal where future federal policy discussions are headed, even if they do not create immediate requirements.

What Agencies Should Be Doing Now

Although the rule is still proposed, hospice agencies should begin reviewing the parts of their operations most likely to be affected. That includes workflows tied to the election statement addendum, discharge order execution, and telehealth face-to-face reporting.

Agencies should also begin monitoring utilization and spending patterns more closely in light of the proposed SSVI framework. Even before final adoption, the measure signals the type of variation CMS is watching more carefully.

Key Date

CMS will accept comments on the proposed rule until June 1, 2026.

HCA will continue reviewing the proposed rule and will provide further updates and guidance as appropriate. For providers, this is the right time to evaluate operational readiness, identify areas of exposure, and prepare for potential implementation changes ahead of the final rule.

Note: This summary reflects key provisions in the FY 2027 Hospice Wage Index Proposed Rule and is intended for informational purposes only.