CMS Proposes FY 2026 Hospice Payment and Policy Updates

CMS Proposes FY 2026 Hospice Payment and Policy Updates

On April 11, 2025, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule detailing potential updates to Medicare payment rates and policies for hospice care in Fiscal Year (FY) 2026. This update is part of CMS’s annual effort to align hospice payments with current healthcare and economic conditions, as outlined in the FY 2026 Hospice Wage Index and Payment Rate Update Proposed Rule (CMS-1835-P).

Key Highlights from the Proposed Rule

Clarifications in Hospice Admission & Documentation Requirements

CMS is aiming to align its regulations more closely with existing standards by proposing that physicians on a hospice’s interdisciplinary team (IDG) can recommend a patient for hospice admission. Additionally, the proposed rule would reinforce the requirement that a hospice face-to-face visit must include a signed and dated attestation by the physician or practitioner conducting the visit.

Updates to the Hospice Quality Reporting Program (HQRP)

The rule also outlines a proposed revision to the regulatory language surrounding HQRP. CMS is encouraging public input on ways to enhance the quality reporting process, especially around challenges related to health information exchange and potential future quality metrics. The agency is particularly interested in hearing from providers about the implementation of digital tools and concepts such as interoperability and data standardization.

Executive Order and Request for Public Feedback

In response to Executive Order 14192, titled "Unleashing Prosperity Through Deregulation," issued by President Trump on January 31, 2025, CMS is inviting public comments on opportunities to streamline Medicare regulations and ease administrative burdens. This Request for Information (RFI) is part of a broader effort to improve efficiency in healthcare delivery and regulatory compliance. Stakeholders can submit their feedback through the official CMS portal: https://cms.gov/medicare-regulatory-relief-rfi.

Payment Rate Adjustments for FY 2026

CMS is proposing a 2.4% increase in hospice payment rates for FY 2026, translating to an estimated $695 million rise in Medicare hospice spending compared to FY 2025. This figure reflects a projected 3.2% market basket increase, offset by a mandatory 0.8% productivity reduction.

Hospices that do not meet HQRP reporting requirements would face a 4% penalty, effectively reducing their rate update to -1.6% from the previous year. CMS calculates these adjustments using the most up-to-date information on labor, goods, and service costs.

In line with this, the proposed annual cap on hospice payments will increase to $35,292.51 for FY 2026—up from $34,465.34 in FY 2025.

Additional HQRP Proposals and Feedback Requests

CMS is also proposing corrections to existing regulations, including a typo in § 418.312(j), and reiterating the upcoming implementation of HOPE (Hospice Outcomes and Patient Evaluation), which is set to begin on October 1, 2025.

The agency is also soliciting feedback through two RFIs on potential future quality measures—focusing on areas like interoperability, nutrition, well-being, and the use of digital quality measurement tools such as Fast Healthcare Interoperability Resources (FHIR).