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Newly-proposed Cms Hospice Payment Update Could ‘jeopardize Access To Care’
Home-based care providers that also offer hospice services face a proposed 2.4% increase in per diem payments – a figure likely insufficient to meet rising operational costs and growing patient demand.
The U.S. Centers for Medicare & Medicaid Services (CMS) on Friday announced its proposed hospice payment rule featuring the payment increase, which was lower than the 2.9% hike the agency approved in its 2025 final rule. The rule also updated quality reporting measures.
The increase represents an estimated $695 million rise in total hospice payments for Fiscal Year (FY) 2026.
The proposed hospice cap amount for FY 2026 is $35,292.51, slightly up from $34,465.34 this year. The payment update reflects a 5% annual wage index update, rising inpatient care costs alongside the potential financial impacts of new quality standards, according to the agency.
“We are also proposing that if more recent data become available after the publication of this proposed rule and before the publication of the final rule (for example, a more recent estimate of the inpatient hospital market basket percentage increase or productivity adjustment), we would use such data, if appropriate, to determine the hospice payment update percentage in the FY 2026 final rule,” CMS stated in the proposed rule. “We continue to believe it is appropriate to routinely update the hospice payment system so that it reflects the best available data regarding differences in patient resource use and costs among hospices as required by the statute.”
Financial impacts
The proposed reimbursement update is based on a proposed 3.2% inpatient hospital market basket percentage increase for FY 2026, reduced by a proposed 0.8% in point productivity adjustment, the agency indicated.
In addition to payment rate changes, CMS held its previously instilled 5% cap on any year-over-year wage increase to reflect compensation differences across different regional locations. The capitated amount was finalized in the FY 2020 final hospice rule, which prevents a geographic area’s wage index from falling below 95% of its wage index calculated in the prior fiscal year.
The proposed payment increases fall short of the financial need, according to Dr. Steven Landers, CEO of the National Alliance for Care at Home. Given escalating operational costs driven by inflation, workforce shortage and rising expenses for supplies and services, the update threatens hospices’ ability to sustainably provide quality care, according to Landers.
“The proposed payment update for FY 2026 falls short of what is needed to sustain high-quality hospice care,” Landers said in a statement shared with Hospice News. “Without meaningful adjustments, hospices across the country will face serious challenges — jeopardizing access to care for terminally ill patients and placing added strain on families already facing the unimaginable. CMS must act to protect this vital benefit and ensure that every American can receive compassionate, dignified care at the end of life.”
Regulatory, quality updates
The proposed rule also included provisions to patient admission regulations and face-to-face recertification requirements, as well as updates to the Hospice Quality Reporting Program (HQRP).
According to the language proposal, the regulatory changes around admission included clarification that only a hospice medical director or physician member of the interdisciplinary group can recertify a patient for services within a subsequent 90- or 60-day period of care. This proposed update sought to provide clarity to reconcile differences between the agency’s Conditions of Participation (CoPs) and its Conditions of Payment.
Quality reporting updates included in the rule propose to “correct an error in the regulations text” regarding implementation of the Hospice Outcomes & Patient Evaluation (HOPE) tool, CMS stated. The agency proposed to retain key items from the previous Hospice Item Set (HIS) and continue to collect data to inform the Comprehensive Assessment at Admission. The assessment list includes:
- Patients Treated with an Opioid who are Given a Bowel Regimen
- Pain Screening
- Pain Assessment
- Dyspnea Treatment
- Dyspnea Screening
- Treatment Preferences
- Beliefs/Values Addressed (if desired by the patient)
The HOPE updates fail to address mounting concerns that providers lack clarity into the new quality data collection tool, slated to take effect in October 2025, according to the Alliance. Hospice providers need a longer window of time and more details to be prepared for a new reporting system, the organization indicated.
“The Alliance is concerned by CMS’ failure to acknowledge the need for additional information and clarifications needed for the HOPE data collection instrument,” the organization wrote. “Hospices and vendors need adequate time to integrate and operationalize the complex requirements of the transition to HOPE to ensure a smooth transition — without compromising patient care.”
The proposed rule also addressed rising program integrity and quality concerns that have led to increasing regulatory oversight in recent years. Auditing activity has ramped up as more providers undergo multiple audits simultaneously each year.
The issues are rooted in a number of fraudulent operators that have increasingly stepped into four specific states of Arizona, California, Nevada and Texas.
Through audits, CMS identified “several areas of weakness” in the hospice benefit, primarily in the area of hospice eligibility, the agency stated.
“In response to concerns raised by the Operation Restore Trust (ORT) regarding beneficiaries who had been receiving hospice care for more than 210 days but who were later determined to have not been eligible for hospice and to reduce Medicare exposure to abusive practices, the FY 2006 Medicare Program Hospice Care Amendments final rule added a new [regulation for] ‘admission to hospice care,’ which established specific requirements that must be met before a hospice provider admits a patient to its care,” CMS stated in the proposed rule.
The intensifying regulatory climate has come with inconsistent audit reviews and outcomes, alongside heavy operational and compliance burdens for some hospice providers, according to the Alliance.
CMS in the proposed rule solicited comments regarding requests for information (RFIs) surrounding “future measure concepts” around hospice quality reporting.
“The Alliance appreciates CMS’s solicitation of stakeholder feedback to reduce provider burdens in alignment with the objectives outlined in Executive Order 14094, which seeks to reduce administrative complexity and streamline regulations to facilitate more efficient and effective patient care,” the organization indicated.
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