CMS Proposes 2.4% Bump for Medicare Hospice Payments

WASHINGTON—The Centers for Medicare & Medicaid Services (CMS) has issued a proposed rule that would increase Medicare hospice payments by 2.4% for fiscal year 2027 and also create a new public scoring system for hospices. 

That rate would total an estimated increase of $785 million in payments compared to fiscal year (FY) 2026, and results from a proposed 3.2% inpatient hospital market basket percentage increase minus a proposed 0.8 percentage point productivity adjustment. Hospices that don’t submit required quality data would see rates reduced from the 2.4% by four percentage points or a 1.6% reduction over the previous year’s payment rate. 

In the fiscal year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Proposed Rule, CMS is also unveiling a new, publicly available hospice scoring system based on indicators of potential inappropriate utilization, quality of care and compliance concerns. The system would publish a number score online for hospices, with lower numbers being lower risk and those with high scores potentially open to further review. 

CMS said the scoring system, which it is seeking public comment on,  is part of the administration’s broader efforts to strengthen oversight, increase transparency and ensure Medicare hospice benefits are not abused by fraudulent actors. These efforts aim to protect beneficiaries and support high-quality providers delivering compassionate end-of-life care, the agency said. 

“Hospices exist to help Americans die peaceful, dignified deaths, not to line the pockets of fraudsters,” CMS Administrator Dr. Mehmet Oz said in the announcement. “These new transparency measures will make it easier for CMS and others to identify hospice providers that misuse Medicare dollars, cut off their funding, and refer them to law enforcement for criminal prosecution.”

The National Alliance for Care at Home (the Alliance) released a statement voicing disapproval over the amount of the increase.

“Hospice care is an invaluable part of the Medicare program, with evidence demonstrating that it is the preferred choice by patients and families when appropriate,” said Jennifer Sheets, CEO of the Alliance. “While a 2.4% payment increase is a step in the right direction, more must be done to ensure that high-quality providers have the resources they need to operate in this demanding environment. 

“The Alliance appreciates the increased oversight and transparency proposals but calls on CMS to carefully implement these measures to avoid unintended consequences for patients and providers,” Sheets continued. “We must protect this essential service so every American can receive compassionate, dignified care at the end of life.”

CMS’ scoring system, titled the service and spending variation index (SSVI), will assign hospices a score based on a variety of metrics CMS gathers from hospice claims including:

• Non-hospice spending
• Percent of beneficiaries discharged with a length of stay of 180 days or more
• Average minutes per routine home care day
• Percent of live discharges where beneficiaries return to the same hospice in seven days, among others 

CMS said these metrics were chosen to compare spending and care delivery between hospices, and while this information is not a direct indicator of fraud, waste or abuse, a high SSVI score would represent a potential higher level of concern, as this may signal potential program integrity risks or inappropriate utilization. 

Provider-level data and each facility’s SSVI score would be posted on CMS’ Hospice Center webpage. CMS said most hospices are anticipated to have a low score, facilities with high-end scores could be subject to additional review to assess potential program integrity or compliance issues.

The rule also proposes an additional icon be added to the Medicare.gov Compare Tool that will identify hospices that do not submit any data or submit less than the required 90% of quality data, under the HOPE tool within 30 days of the patient’s admission or discharge date within a year period beginning no earlier than FY 2028.

The proposed rule was expected to be published in the Federal Register on April 6.