National Alliance Raises Concerns Over Hospice Wage Index Updates

ALEXANDRIA, Virginia—The National Alliance for Care at Home (the Alliance) published a 41-page letter in response to the Centers for Medicare & Medicaid Services’ (CMS) Hospice Wage Index proposed rule, which proposes payment and regulatory updates under the Medicare hospice benefit.

In the letter, the Alliance states that the proposed 2.4% hospice payment update for Fiscal Year (FY)  2027 will not adequately account for the cost pressures hospice providers face in today’s healthcare delivery market. 

“Healthcare sector inflation remains above historical norms, and the rising cost of care continues to surpass the proposed total payment update at a time when prior payment rules have failed to adequately forecast market pressures,” the Alliance said. “In order for providers to continue to deliver care amid increased demand, it is critical that CMS consider these factors and adjust the payment update accordingly.”  

The Alliance said it recommends CMS use the most recent data available to more accurately align the FY 2027 payment update with rising cost pressures and actual inflationary increases. Further, the Alliance urged CMS to explore all available avenues to address the proposed rule’s forecast error limitations, such as through a one-time adjustment.

“We are concerned about the inadequacy of the proposed FY 2027 payment rate update considering current economic conditions and strongly urge CMS to revisit this update in the final rule,” said Jennifer Sheets, CEO of the Alliance, in the letter. “Further, we have serious concerns with the methodology and assumptions underlying the Service and Spending Variation Index and the rationale behind the proposed mandatory provision of the hospice election statement addendum and the logistics associated with furnishing this to every beneficiary at the time of election.”

The Alliance also raised concerns about the appropriateness and data accuracy related to the hospice Service and Spending Variation Index (SSVI), and said it recommends that CMS pause any use of the SSVI indefinitely and undertake a transparent, collaborative approach with the provider community to better target its efforts to address hospice fraud, waste and abuse.

The Alliance also noted that proposed policy updates would be applied following a newly imposed six-month national moratorium on hospice enrollment. While the Alliance said it strongly supports efforts to root out “bad actors” who exploit the Medicare hospice program, it is also concerned about the cumulative impact of these policies on not only providers delivering compliant, patient-centered and clinically appropriate care, but also patients and families who continue to choose hospice care.

“The Alliance recognizes and appreciates CMS’s commitment to enhancing quality hospice care, strengthening program integrity and improving patient outcomes, and will continue to collaborate with CMS to achieve these goals,” the Alliance said. “The Medicare hospice benefit offers exceptional value to our healthcare system and the American people. The Alliance will continue advocating for policies that promote the delivery of the compassionate, high-quality care patients deserve at the end of life.”  

View the full letter here.