CMS Finalizes FY 2027 Hospice Payment Rule: 2.3% Rate Increase, Mandatory Addendum, and a New Fraud-Monitoring Scorecard for Hospices

CMS Finalizes FY 2027 Hospice Payment Rule: 2.3% Rate Increase, Mandatory Addendum, and a New Fraud-Monitoring Scorecard for Hospices

HealthBridge US | Policy Desk

Published July 31, 2026

The Centers for Medicare & Medicaid Services (CMS) has released its Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule — officially designated CMS-1851-F — setting new Medicare hospice payment rates, tightening oversight of non-hospice spending, and mandating a transparency document for every family that enrolls a loved one in hospice care.

CMS issued the final rule on July 30, 2026. It lands at a pivotal moment for the hospice industry, which has spent the last several years under mounting scrutiny over billing patterns, spending variation, and inconsistent quality reporting. This year's rule doesn't just adjust payment math — it signals a broader shift toward tighter accountability for the more than 5,000 Medicare-certified hospice programs operating nationwide, and it changes what nearly two million Medicare beneficiaries and their families will see when they enroll in hospice care each year.

Below, HealthBridge US breaks down everything in the final rule: the payment numbers, the new fraud-detection index CMS is rolling out, the mandatory paperwork change hospices must now follow, the quality reporting penalties taking effect in 2028, and what all of it means for hospice operators, clinicians, caregivers, and patients.

Quick-Read Summary

Before diving into the details, here's the essential rundown of what changed:

Medicare hospice payments are going up 2.3% for FY 2027, an estimated $755 million increase in aggregate payments compared to FY 2026. Hospices that fail to meet quality reporting requirements will instead see their payment update effectively cut by 1.7% relative to the prior year, because the law subtracts four full percentage points from the base update for non-compliant providers. The statutory aggregate cap that limits how much Medicare will pay any single hospice per patient, per year, rises to $36,174.75, up from $35,361.44. CMS is also introducing a new internal scoring tool called the Service and Spending Variation Index (SSVI) to flag hospices with unusual patterns of non-hospice spending among their patients. Separately, CMS finalized a rule requiring every hospice to automatically provide a written addendum explaining what is and isn't covered to all patients at the time they elect hospice care — not just to those who ask for it, as has been the rule since 2020. The rule also gives hospices more flexibility in who can authorize a patient's discharge, aligns hospice telehealth rules with the Consolidated Appropriations Act of 2026, and previews a new penalty icon coming to Medicare's Care Compare website in FY 2028 for hospices that don't submit required quality data.

Why This Rule Matters Right Now

Hospice care is one of the fastest-growing corners of the Medicare program, and it's also one of the most closely watched by federal fraud investigators. Over the past decade, the number of Medicare-certified hospices has climbed substantially, driven in part by an influx of newer, for-profit providers in certain states. That growth has coincided with rising concern from CMS, the HHS Office of Inspector General, and congressional oversight committees about whether some hospices are enrolling patients who aren't actually terminally ill, billing for services that were never delivered, or allowing beneficiaries to rack up non-hospice medical spending that the hospice benefit was designed to eliminate.

The FY 2027 final rule is CMS's latest attempt to thread a difficult needle: keep hospice payments aligned with rising labor and operating costs, while building better tools to catch the small but consequential slice of the industry engaged in questionable billing practices. It follows several years of incremental hospice program integrity work, including the special focus program for underperforming hospices, tightened enrollment moratoria in certain states, and now, for FY 2027, a formal claims-based scoring system that will make provider-level spending variation visible.

For an outlet like HealthBridge US that tracks Medicare policy closely, this rule is significant not because any single provision is radical, but because of what the sum of the provisions signals: CMS is moving from monitoring hospice behavior internally to building public-facing accountability mechanisms, starting with the mandatory addendum this year and the Care Compare quality icon in 2028.

The FY 2027 Payment Numbers, Explained

The 2.3% Payment Update

For FY 2027, CMS finalized a 2.3% increase to hospice payment rates. That number is not arbitrary — it flows directly from a statutory formula. CMS started with the finalized inpatient hospital market basket percentage increase of 3.2%, which reflects the projected rise in the cost of goods, services, and labor that hospitals and hospice providers purchase. Federal law then requires CMS to subtract a "productivity adjustment," a factor meant to account for expected efficiency gains across the healthcare economy. For FY 2027, that productivity adjustment is 0.9 percentage points. Subtracting 0.9 from 3.2 produces the finalized 2.3% hospice payment update.

CMS estimates this update will increase aggregate payments to hospices nationwide by approximately $755 million in FY 2027 relative to FY 2026. That figure represents the net effect across all four levels of hospice care CMS reimburses — routine home care, continuous home care, general inpatient care, and inpatient respite care — each of which is paid at a different daily or hourly rate and adjusted by the local wage index for the hospice's geographic area.

The Wage Index Component

As its name indicates, the rule also updates the hospice wage index, the geographic adjustment factor CMS uses to account for regional differences in labor costs. Because hospice care is labor-intensive — nurses, aides, chaplains, social workers, and physicians make up the bulk of a hospice's cost structure — the wage index has an outsized effect on what any individual hospice actually gets paid per patient day, even when the national update percentage is the same everywhere. Hospices in high-wage metropolitan labor markets will see higher adjusted rates than hospices in lower-wage rural areas, even though every hospice nationwide is subject to the same 2.3% baseline update.

Notably, this final rule also summarizes public comments CMS received in response to a request for information (RFI) on developing a hospice-specific wage index built from Bureau of Labor Statistics (BLS) data, rather than continuing to borrow the hospital wage index as a proxy. CMS has used the hospital inpatient wage index for hospice payment adjustments for years, a practice that industry groups have long argued doesn't accurately reflect hospice-specific staffing costs, since hospice staffing patterns (a heavier mix of home-based nursing, aides, and non-physician staff) differ meaningfully from acute inpatient hospital staffing. CMS did not finalize a new hospice-specific wage index in this rule, but the RFI response signals the agency is actively evaluating the idea for a future rulemaking cycle.

The Non-Compliance Penalty: A 1.7% Effective Cut

Hospices that fail to meet the reporting requirements of the Hospice Quality Reporting Program (HQRP) don't get the full 2.3% update. Instead, the law requires CMS to subtract four full percentage points from whatever the annual payment update percentage would otherwise be, for any hospice that doesn't comply with quality data submission requirements. Applied to FY 2027's 2.3% baseline update, that penalty math works out to a 1.7% rate reduction (2.3% minus 4 percentage points) relative to the previous year's payment rate for non-compliant hospices.

In practical terms, that means a hospice that fails to submit adequate quality data isn't just missing out on a raise — it's taking an outright pay cut, year over year, while every one of its compliant competitors gets a 2.3% increase. As detailed further below, this penalty has real teeth: roughly one in five hospices nationally have been landing in the non-compliant category in recent years.

The Aggregate Cap: $36,174.75

Medicare doesn't just pay hospices per patient day — it also imposes a hard ceiling on total annual payments a hospice can receive per patient, known as the hospice aggregate cap. The cap exists to prevent a hospice from being reimbursed indefinitely for patients who remain on hospice far longer than the six-month prognosis threshold the benefit is designed around. If a hospice's total Medicare payments for a cap year exceed the cap amount multiplied by its number of Medicare patients, the hospice must repay the excess to Medicare.

For FY 2027, CMS finalized a cap amount of $36,174.75, up from the FY 2026 cap of $35,361.44 — an increase that mirrors the 2.3% payment update percentage. This is a routine, formulaic increase, but it's an important guardrail for hospice finance and compliance teams, since exceeding the cap can trigger significant repayment obligations, especially for hospices with longer average lengths of stay.

The New Fraud Radar: Service and Spending Variation Index (SSVI)

Perhaps the most consequential — and most novel — piece of this year's rule isn't a payment number at all. It's a new analytical tool CMS calls the Service and Spending Variation Index, or SSVI.

What the SSVI Is

The SSVI is a scoring system CMS built using nine separate claims-based measures. Each measure captures a different dimension of how a hospice delivers care and how much Medicare is spending on services outside the hospice benefit for that hospice's patients. Individually, each measure tells CMS something about utilization patterns — visit frequency, level-of-care mix, length of stay, live discharge rates, and, centrally, how much non-hospice Part A and Part B spending Medicare is still paying out for beneficiaries who have technically elected hospice and should, under the benefit's design, have virtually all of their care covered by the hospice itself.

Combined, the nine measures produce a single composite SSVI score for each hospice provider. A higher score signals a pattern of utilization or non-hospice spending that CMS considers potentially concerning — not proof of fraud or wrongdoing, but a flag that a hospice's billing and care patterns diverge meaningfully from typical, expected patterns and may warrant closer look, technical assistance, or targeted oversight.

Why CMS Built It

The hospice benefit is built on a specific premise: once a beneficiary elects hospice, essentially all of the medical care related to their terminal illness and related conditions should be furnished and paid for by the hospice itself, under a single per-diem payment. CMS reiterated in this rule language it has used since 1983 — that it would be "unusual and exceptional" for a hospice patient to need significant outside medical services, because "virtually all" care needed by a terminally ill person should come through the hospice.

In reality, CMS's own claims monitoring has found that non-hospice Medicare spending for beneficiaries who have elected hospice has been rising steadily. That's spending Medicare pays out through Part A and Part B for services delivered outside the hospice benefit while a patient is still hospice-enrolled — things like emergency department visits, hospitalizations, or physician services that, in a well-functioning hospice relationship, generally shouldn't be necessary because the hospice is supposed to be managing the patient's terminal condition comprehensively.

Rising non-hospice spending can mean a few different things: a hospice may be under-delivering care and pushing patients to seek treatment elsewhere, a patient's needs may genuinely exceed what a home-based hospice model can provide, or, in the cases CMS is most concerned about, a hospice may be enrolling patients who don't actually meet the terminal prognosis requirements and continuing to bill Medicare's other benefit categories normally for their ongoing (non-terminal) care. The SSVI is built to make that spending pattern visible at the individual provider level, across the industry, for the first time in this systematic a way.

What's Actually in the Data

This final rule discusses SSVI results built from FY 2024 and FY 2025 claims data. CMS says no substantive changes were made to the underlying scoring methodology in this rule — the update simply refreshes the index with more recent claims. Provider-level SSVI scores, along with documentation of the nine underlying claims-based measures and how they're calculated, are published in the Federal Register at federalregister.gov/d/2026-15686.

CMS emphasized several intended uses for the SSVI: it provides transparency into CMS's internal data analysis process, gives beneficiaries and their families another data point to weigh when choosing a hospice provider, and supports the agency's broader program integrity efforts by helping investigators and regional CMS offices prioritize which hospices might need additional education, technical assistance, or targeted audits.

Industry Response Baked Into the Rule

CMS solicited public comment specifically on the SSVI metrics and scoring approach before finalizing this rule, and the final rule includes CMS's summary of and response to those comments. While CMS did not detail every individual comment publicly in the fact sheet accompanying this rule, the agency's decision to proceed with essentially the same methodology — just refreshed with newer data — suggests it was not persuaded to make major structural changes to the index in response to industry feedback. Hospice trade associations have historically raised concerns about claims-based utilization metrics being used as a proxy for quality or compliance, arguing that patient case-mix, comorbidities, and regional care patterns can all drive legitimate variation in non-hospice spending that has nothing to do with fraud. Whether CMS's final response to comments adequately addresses those concerns will likely be a point of continued debate as SSVI scores become more visible.

What Hospices Should Do Now

For hospice compliance officers, the SSVI is not something to wait out. Providers should expect that a high SSVI score, even without any other enforcement action, could trigger increased scrutiny, requests for medical records, or a referral to a Unified Program Integrity Contractor (UPIC) or other program integrity contractor. Hospices should:

Review their own FY 2024 and FY 2025 SSVI scores once published data becomes available at the Federal Register link CMS provided, and compare their scores against state and national benchmarks. Audit internal processes around eligibility determinations, particularly around recertification of the six-month terminal prognosis, since incorrect enrollment is one of the most common drivers of both elevated non-hospice spending and OIG enforcement actions. Review case management protocols to ensure hospice interdisciplinary teams are proactively managing symptoms and needs that might otherwise send patients back into the acute care system for non-hospice services. Document clinical rationale carefully whenever a hospice patient does receive non-hospice services, since that documentation will matter if a high SSVI score ever draws a closer look.

Mandatory Hospice Election Statement Addendum: The Biggest Change for Patients and Families

If the SSVI is the rule's fraud-detection headline, the mandatory election statement addendum is its consumer-protection headline — and it's the piece of this rule that will touch the most people directly, since it changes what every single Medicare beneficiary sees the moment they enroll in hospice.

What the Addendum Is

The hospice election statement addendum is a written document that lists and explains which conditions, items, services, or drugs a hospice has determined are not related to the patient's terminal illness and related conditions — and therefore won't be covered under the Medicare hospice benefit. It's meant to give patients and families clarity, in writing, about where the boundaries of hospice coverage sit, so they aren't caught off guard by unexpected bills or gaps in care.

Hospices are also required to provide this addendum to non-hospice providers, such as outside physicians or specialists, who are treating a hospice patient and need to understand what is and isn't covered by the hospice election, since that affects how those outside providers bill Medicare for their own services.

The Old Rule vs. The New Rule

CMS first finalized the addendum requirement back in the FY 2020 Hospice Final Rule (published at 84 FR 38484), with the goal of increasing coverage transparency and helping ensure hospice patients received comprehensive, holistic care. But under that original policy, hospices only had to provide the addendum if a beneficiary (or their representative) specifically requested it. It wasn't automatic.

That "request it and you'll get it" model, it turns out, largely failed to achieve what CMS intended. According to the data CMS cites in this final rule, Medicare non-hospice spending for beneficiaries who had elected the hospice benefit grew substantially and consistently from FY 2020 through FY 2024, with especially sharp increases in Part A and Part B spending — the exact categories the addendum was designed to help patients understand and, indirectly, help constrain. CMS's read on this trend is straightforward: many beneficiaries and family caregivers, especially at the emotionally difficult moment of enrolling a loved one in hospice, simply don't know to ask for the addendum, don't understand why it matters, or aren't in a position to request paperwork proactively while managing a terminal diagnosis. The result is that a policy tool meant to increase accountability and transparency wasn't reaching the people it was designed to protect.

In this final rule, CMS closes that gap: the addendum is now mandatory for every beneficiary who elects hospice care, automatically, regardless of whether anyone asks for it.

Why This Matters for Families

For families navigating a hospice election — often one of the most stressful and time-compressed healthcare decisions a family will ever make — this change means every patient will now receive, in writing, a clear breakdown of what the hospice will and won't cover related to the terminal diagnosis. CMS frames this as a way to reduce beneficiary out-of-pocket costs, since families will know upfront (rather than discovering later, via a bill) which services fall outside the hospice benefit. It also gives families a document to reference when deciding whether to seek additional non-hospice care, and what that might cost them.

Why This Matters for Hospices

For hospice operators, the shift from an opt-in to a mandatory addendum is an operational and compliance change that touches admissions workflows immediately. Hospice intake teams will need to build the addendum into the standard election paperwork packet for every single patient, rather than maintaining it as a document produced only on request. Compliance and legal teams should also expect that a mandatory, universally distributed addendum creates a clearer paper trail — meaning inconsistent or vague addenda (documents that don't clearly and specifically explain what's excluded) are more likely to draw scrutiny, since there's no longer a request-based gap to explain why a given patient's file doesn't have one.

CMS also frames the mandatory addendum as a mechanism to hold hospices "more accountable for the items, services, and drugs they are required to provide" — language suggesting the agency sees this document as a lever connected to its broader non-hospice spending concerns (the same concerns driving the SSVI). Hospices with clear, well-documented addenda that explain coverage decisions in patient-friendly language are likely to fare better under future audits than those treating the addendum as boilerplate.

More Flexibility for Hospice Discharge Decisions

Buried among the bigger headline items is a smaller but practically meaningful operational change: CMS finalized conforming regulation text that expands who is authorized to discharge a patient from hospice care.

Previously, discharge decisions were tied specifically to the hospice medical director. Under this final rule, a physician designee and the physician member of the hospice's interdisciplinary group can also discharge a patient, in addition to the medical director. CMS frames this as a flexibility and burden-reduction measure — in practice, it means hospices no longer need to route every discharge decision through a single individual (the medical director), which can create bottlenecks, especially for hospices operating across multiple sites or covering large geographic service areas with a single medical director. This gives hospice clinical leadership more staffing flexibility for a process that has real consequences for patients, since a hospice discharge decision affects a beneficiary's ongoing Medicare coverage status.

Telehealth Face-to-Face Recertification: Conforming to the 2026 Appropriations Act

The rule also finalizes conforming regulatory text changes to hospice's telehealth face-to-face encounter policy, aligning hospice regulations with the Consolidated Appropriations Act, 2026. Federal law requires a hospice physician or nurse practitioner to conduct a face-to-face encounter with a patient prior to the 180th-day recertification and each subsequent recertification, to confirm continued eligibility for the hospice benefit. Telehealth flexibilities — first broadly expanded during the COVID-19 public health emergency and repeatedly extended by subsequent legislation — allow that encounter to happen via telehealth rather than requiring an in-person visit.

This rule doesn't introduce new telehealth policy on its own; rather, it updates CMS's regulatory text so that hospice rules match whatever the Consolidated Appropriations Act, 2026 authorized regarding the duration and terms of hospice telehealth flexibilities. For hospices, the practical takeaway is continuity: as long as Congress keeps extending these telehealth authorities through appropriations legislation, CMS will keep conforming its regulations to match, meaning hospices can continue to rely on telehealth for face-to-face recertification encounters under the terms set by the 2026 Act.

Hospice Quality Reporting Program: A New Public Penalty Coming in FY 2028

The final piece of this rule addresses a persistent enforcement problem for CMS: getting hospices to actually submit the quality data they're required to report.

The Legal Backbone

Under Section 1814(i)(5) of the Social Security Act, the HHS Secretary is required to establish hospice quality reporting requirements and to publicly report quality measures related to hospice care on Medicare's Care Compare website (medicare.gov/care-compare), the consumer-facing tool patients and families can use to compare providers. Since FY 2014, hospices that fail to comply with quality data reporting requirements have faced a payment penalty — originally a two-percentage-point reduction to their annual payment update (APU).

In the FY 2022 Hospice Final Rule, CMS finalized a significant toughening of that penalty: beginning with the FY 2024 APU and every year after, the penalty for HQRP non-compliance doubled, from two percentage points to four percentage points. That's the same four-point penalty referenced earlier in this article's payment section — the one that turns FY 2027's 2.3% baseline increase into an effective 1.7% cut for non-compliant hospices.

The Compliance Numbers Aren't Moving

Here's the problem CMS is grappling with: despite doubling the financial penalty, compliance hasn't meaningfully improved. According to figures included in this final rule, 22.06% of hospices were found non-compliant with HQRP requirements in FY 2024, the first year the four-percentage-point penalty applied. In FY 2025, the non-compliance rate actually rose slightly, to 23.53%. In FY 2026, it dipped to 20.37% — an improvement, but still meaning roughly one in five hospices nationwide failed to meet quality data reporting requirements.

CMS is blunt about what that means in practice: with data missing for roughly a fifth of all hospices year after year, the agency's ability to accurately measure hospice quality of care is limited, and consumers researching hospice options on Care Compare are working with an incomplete picture, since non-compliant hospices' quality data simply isn't there to review.

The New Consequence: A Public Icon on Care Compare

Since a bigger financial penalty alone hasn't solved the compliance problem, CMS is adding a new, public-facing consequence. Starting no earlier than FY 2028, CMS will add an icon to the Care Compare website specifically identifying hospices that either fail to submit any quality data, or submit less than the required 90% threshold, within a given year. In effect, a hospice's non-compliance will no longer be a purely internal, financial matter between the provider and CMS — it will become visible to any patient, family member, or referring physician researching hospice options online.

This is a meaningful escalation. A payment penalty affects a hospice's bottom line but is invisible to consumers. A public icon on the exact website CMS built for consumers to compare hospice quality directly targets the demand side: it gives families a visual, easy-to-understand signal to steer away from non-compliant providers, which in turn creates a market-based incentive for compliance that a backend payment adjustment alone doesn't.

How Compliance Actually Works: The HOPE Tool

To comply with HQRP requirements, hospices must submit quality data through the Hospice Outcomes and Patient Evaluation (HOPE) tool, CMS's standardized patient assessment instrument for hospice. Specifically, hospices are required to submit HOPE data within 30 days of three separate patient milestones: the HOPE admission assessment, the HOPE Update Visit (HUV), and the HOPE discharge assessment. Missing any of these submission windows, or falling short of the required 90% submission threshold across a hospice's patient population, is what triggers both the existing four-percentage-point payment penalty and, starting in FY 2028, the new Care Compare icon.

For hospice operations and quality teams, this rule is a clear signal to shore up HOPE submission workflows now, well ahead of the FY 2028 icon rollout. Hospices that have treated the four-point payment penalty as an acceptable cost of doing business will soon face a reputational consequence that's much harder to absorb, particularly in competitive local markets where families and referring physicians have multiple hospice options to choose from.

What CMS Heard on Palliative Care, Wage Index Reform, and Medical Aid in Dying

Beyond the provisions it finalized, this rule also summarizes public comments CMS received in response to three separate requests for information (RFIs):

Community palliative care services. CMS sought input on ways to enhance access to community-based palliative care within current Medicare benefit structures — palliative care being distinct from hospice in that it can be delivered alongside curative treatment, for patients who aren't necessarily terminal. This RFI reflects ongoing interest, both inside CMS and across the healthcare policy community, in expanding serious-illness care options for Medicare beneficiaries who don't yet qualify for or want hospice, but could benefit from palliative support.

A hospice-specific wage index built from BLS data. As discussed above, this RFI explored replacing or supplementing the current hospital-based wage index proxy with a wage index built specifically from Bureau of Labor Statistics occupational and wage data reflecting actual hospice staffing patterns. No changes were finalized in this rule, but the RFI and comment summary suggest this is an area CMS could act on in future rulemaking cycles.

Overlap between hospice and medical aid in dying. CMS also asked for input describing any experiences with overlap between hospice care and state "medical aid in dying" (also referred to as physician-assisted death) laws, which are currently authorized in a number of states. This is a sensitive and evolving area, since hospice eligibility, hospice philosophy of care, and state medical aid in dying statutes intersect in ways that vary significantly by state and that CMS appears to be studying for potential future policy clarification.

None of these three areas resulted in finalized policy changes in this rule — they remain in the "information gathering" phase — but each is worth watching closely for hospice operators and clinicians, since RFI responses often preview the direction of future rulemaking.

Timeline: What Takes Effect When

July 30, 2026 — CMS issues the CMS-1851-F final rule.

Fiscal Year 2027 (beginning October 1, 2026) — The 2.3% payment update, the $36,174.75 aggregate cap, the mandatory election statement addendum requirement, the expanded discharge authority for physician designees, and the conforming telehealth face-to-face regulation text all take effect.

No earlier than Fiscal Year 2028 — The new Care Compare icon identifying HQRP non-compliant hospices goes live.

Ongoing — CMS will continue refreshing SSVI data with updated claims information; the version discussed in this rule reflects FY 2024 and FY 2025 data.

What This Means for Hospice Operators: An Action Checklist

Hospice administrators, compliance officers, and clinical leadership should treat this rule as a call to action across several fronts simultaneously, not a routine annual payment update to file away. At minimum, hospice organizations should update admissions and intake workflows so that the election statement addendum is generated and provided automatically for every single patient, with no dependence on a request trigger. Finance and revenue cycle teams should model the FY 2027 rate update, including local wage index effects, against the updated $36,174.75 aggregate cap to flag any patients or cohorts at risk of exceeding the cap. Quality and clinical informatics teams should audit HOPE tool submission timeliness now, specifically the 30-day windows around admission, the HUV, and discharge, to get well clear of the 90% compliance threshold before the FY 2028 Care Compare icon goes live. Compliance departments should pull and review their hospice's own SSVI scores once the FY 2024–2025 data referenced in this rule is available via the Federal Register, benchmark against peers, and proactively address any outlier metrics. Legal and compliance teams should also review discharge authorization policies to take advantage of the expanded physician designee and interdisciplinary group physician discharge authority, if doing so would relieve bottlenecks tied to a single medical director.

What This Means for Patients and Families

For Medicare beneficiaries and the family members helping them navigate a hospice decision, the most tangible change from this rule is the automatic election statement addendum. Every patient enrolling in hospice starting in FY 2027 should expect to receive, without having to ask, a written explanation of what the hospice will and won't cover related to their terminal diagnosis. Families should read this document closely at the time of enrollment, ask the hospice team direct questions about any excluded items or services, and keep the addendum on file for reference if questions about coverage or billing come up later.

Families researching hospice providers can also expect, starting no earlier than FY 2028, a new visual flag on Medicare's Care Compare website identifying hospices that haven't been submitting required quality data — one more data point, alongside existing Care Compare quality measures, to weigh when choosing between hospice options in a given area.

The Bigger Picture

Taken together, the FY 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program final rule reflects a CMS that is simultaneously keeping the hospice benefit financially sustainable for providers — with a routine, market-basket-driven 2.3% payment increase — while building out a more sophisticated, public-facing accountability infrastructure around it. The SSVI gives CMS a systematic, claims-based way to flag concerning spending patterns across thousands of providers at once. The mandatory addendum closes a transparency gap that a voluntary, request-based policy failed to close over six years. And the coming Care Compare icon takes quality reporting compliance out of the realm of an internal payment adjustment and puts it directly in front of the consumers hospices are trying to serve.

For an industry that has grown rapidly and drawn increasing federal scrutiny, this rule is best read not as a single isolated policy update, but as another step in a multi-year trajectory toward tighter, more transparent, more publicly visible oversight of how Medicare's hospice benefit is used — and by whom.

Frequently Asked Questions

What is CMS-1851-F? CMS-1851-F is the official designation for the Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule, issued by CMS on July 30, 2026.

How much are Medicare hospice payments increasing in FY 2027? CMS finalized a 2.3% payment update for FY 2027, an estimated $755 million increase in aggregate hospice payments compared to FY 2026.

What happens if a hospice doesn't submit required quality data? Non-compliant hospices face a four-percentage-point reduction to their annual payment update, which for FY 2027 results in an effective 1.7% rate decrease rather than the 2.3% increase compliant hospices receive. Starting no earlier than FY 2028, non-compliant hospices will also be flagged with a new icon on Medicare's Care Compare website.

What is the hospice aggregate cap for FY 2027? The finalized FY 2027 hospice aggregate cap is $36,174.75, up from $35,361.44 in FY 2026.

What is the Service and Spending Variation Index (SSVI)? The SSVI is a new CMS scoring tool built from nine claims-based measures that evaluates hospice utilization patterns and non-hospice Medicare spending for hospice-enrolled beneficiaries. Higher scores flag potentially concerning patterns that may prompt additional CMS oversight.

What is the hospice election statement addendum, and what changed? It's a written document listing which conditions, items, services, or drugs a hospice has determined are unrelated to a patient's terminal illness and therefore won't be covered under the hospice benefit. Previously, hospices only had to provide it upon request; this final rule makes it mandatory for every beneficiary electing hospice care.

Who can now discharge a patient from hospice? In addition to the hospice medical director, a physician designee and the physician member of the hospice's interdisciplinary group can now authorize a patient discharge.

When does the new Care Compare quality icon take effect? No earlier than Fiscal Year 2028.

What tool do hospices use to submit quality data? The Hospice Outcomes and Patient Evaluation (HOPE) tool. Data must be submitted within 30 days of the HOPE admission assessment, the HOPE Update Visit, and the HOPE discharge assessment.

Where can I find hospice-specific SSVI scores? CMS has published FY 2024 and FY 2025 SSVI data, along with underlying claims-based measures and methodology documentation, in the Federal Register at federalregister.gov/d/2026-15686.

This article is based on CMS's official fact sheet for the Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule (CMS-1851-F), issued July 30, 2026. For the complete regulatory text, hospice operators and other stakeholders should consult the full final rule as published in the Federal Register.

Reporting: HealthBridge US Policy Desk

References:

• CMS Fact Sheet: FY 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule (CMS-1851-F)

• Federal Register: Medicare Program – Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and HQRP Requirements Final Rule (Public Inspection, 2026-15686)

• Medicare Care Compare