Hospices are expected to see a pay increase later this year, according to the fiscal year 2027 Hospice Wage Index and Payment Rate Update proposed rule, released on the Federal Register Thursday, April 2, 2026.  
 
The proposed rule includes a hospice payment update of 2.4% beginning in October 2026. If finalized as proposed, the payment update would mean an estimated $785 million in increased payments to hospices, according to CMS.  
 
The proposed aggregate cap per patient would be $36,210.11, up from the fiscal year 2026 cap of $35,361.44. These numbers often change slightly before the final rule is released in the summer based on updated data.  
 
The rate update is lower than the 2.6% increase for fiscal year 2026. 

New metric targets suspect spending 

With the proposed rule, CMS is soliciting comments on a hospice service and spending variation index (SSVI), which analyzes non-hospice spending under a hospice election.  
 
According to CMS, the SSVI includes a scoring system that monitors nine claims-based metrics to comprehensively assess hospice services and yield a provider ranking. 
 
The rule includes agency scores created using provider-level data from October 2023 to September 2025. A higher score would represent potentially concerning hospice utilization and non-hospice spending.  
 
CMS expects this could be utilized by beneficiaries to make more informed health decisions and support program integrity efforts. 
 
According to a summary by CMS, the proposed rule would also: 
  • Require that hospices provide the hospice election statement addendum to all Medicare beneficiaries at the time of hospice election.
  • Update regulations to allow a physician designee or physician member of the interdisciplinary group (IDG), in addition to the hospice medical director, to discharge a patient from hospice care.
  • Conform regulation text changes to the hospice telehealth face-to-face policy.
  • Add an icon to the Medicare.gov Compare Tool that would identify agencies that failed to submit the required quality data as part of the Hospice Quality Reporting Program (HQRP), in addition to other updates to the HQRP. 
The proposed rule includes requests for information (RFI) on enhancing community palliative care services under current Medicare benefits, the construction of a hospice specific wage index using Bureau of Labor Statistics (BLS) data and the overlap between hospice and medical aid in dying (MAID). 
 
More info: See the full 2027 hospice payment proposed rule at https://public-inspection.federalregister.gov/2026-06604.pdf.