Hospices won’t see the full payment increase this fall that they were expecting, according to the fiscal year 2027 Hospice Wage Index and Payment Rate Update Final Rule, released Thursday, July 30, 2026. The changes go into effect Oct. 1, 2026.
The final rule includes a hospice payment update of 2.3% beginning in October 2026. That’s down from the 2.4% proposed in the spring, and lower than the 2.6% that hospices received for fiscal year 2026.
The payment update means an estimated $755 million in increased payments to hospices, according to CMS.
The finalized aggregate cap per patient is $36,174.75, up from the fiscal year 2026 cap of $35,361.44.
New metric targets suspect spending
The final rule includes an analysis of Medicare non-hospice spending under a hospice election, a key element of the hospice spending variation index (SSVI) that was introduced in the proposed rule in April.
The SSVI includes a scoring system that monitors nine claims-based metrics to comprehensively assess hospice services and yield a provider ranking.
Provider-level agency scores were released with the proposed rule, using data from October 2023 to September 2025. CMS notes in the final rule that the data could indicate hospices that need additional education and oversight.
Results are expected to be used by beneficiaries to make more informed health decisions and support program integrity efforts, CMS has stated.
- Requires that hospices provide the hospice election statement addendum regarding coverage of non-hospice services to all Medicare beneficiaries at the time of hospice election.
- Updates 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.
- Conforms regulation text to the hospice telehealth face-to-face policy.
- Adds an icon to the Medicare.gov Care Compare Tool, effective in October 2027, to 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.