WASHINGTON—The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would update Mediare payment for hospices 2.4%—a figure industry advocates say is inadequate.
“The proposed payment update for FY 2026 falls short of what is needed to sustain high-quality hospice care,” said Dr. Steven Landers, CEO of the National Alliance for Care at Home. “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.”
The Alliance said the proposed update fails to adequately address the mounting financial pressures facing hospices nationwide. With escalating operational costs driven by inflation, workforce shortages and rising expenses for supplies and services, the proposed payment increase would threaten the ability of hospices to sustainably provide quality end-of-life care.
The proposed rule also proposes to clarify in the hospice payment regulations that the physician member of the interdisciplinary group (IDG) may recommend admission to hospice care, which would align with certification regulations and the Conditions of Participation (CoPs). CMS also proposes to clarify that the hospice face-to-face encounter attestation must include the physician’s/practitioner’s signature and date.
In the rule, CMS also says it wants to provide a regulatory text change for the Hospice Quality Reporting Program (HQRP). CMS is seeking public input through requests for information (RFIs) on barriers to interoperability and future quality measures concepts.
CMS said in its announcement that the fiscal year (FY) 2026 Hospice Wage Index and Payment Rate Updated Proposed Rule (CMS-1835-P) will align with already proposed updates to the FY 2026 Inpatient Prospective Payment System Proposed Rule. That works out to 2.4% (an estimated increase of $695 million in payments from FY 2025), resulting from the proposed 3.2% inpatient hospital market basket percentage increase reduced by a proposed 0.8 percentage point productivity adjustment, which CMS said is "required by law." The proposed FY 2026 rates for hospices that do not submit the required quality data would reflect the proposed FY 2026 hospice payment update percentage of 2.4% minus four percentage points, 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, CMS said in its announcement. The proposed hospice cap amount for FY 2026 is $35,292.51 (FY 2025 cap amount of $34,465.34 increased by the FY 2026 hospice payment update percentage of 2.4%).
CMS also proposes to correct "a typographical error" in the regulations text at § 418.312(j), restate the HOPE requirements that will be implemented starting October 1, 2025, and solicit public comments related to two RFIs on future quality measure concepts for HQRP.
The Alliance said it is concerned by CMS’s failure to acknowledge the need for additional information and clarifications needed for the Hospice Outcomes & Patient Evaluation (HOPE) data collection instrument. "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 organization said in a statement.
To seek feedback on current adoption of health information technology (IT) and standards, including Fast Healthcare Interoperability Resources (FHIR), CMS is seeking feedback on two RFIs: 1) Future measure on the topics of interoperability, nutrition, and well-being; and 2) Advancing digital quality measurement.
The final rule can be viewed at the Federal Register at: federalregister.gov/public-inspection.