Understanding the Fiscal Year 2027 Medicare Hospice Wage Index Proposed Rule

Published by HealthBridge US | April 2026 Classification: Provider Education | Regulatory Affairs | Reimbursement Policy

Introduction: Why This Rule Matters to Your Organization

Every year, the Centers for Medicare & Medicaid Services (CMS) releases a proposed rule governing hospice payment rates, quality reporting standards, and program integrity mechanisms for the upcoming fiscal year. For hospice providers across the country, this proposed rule is not merely a regulatory formality — it is a forward-looking blueprint that shapes reimbursement levels, quality expectations, and compliance obligations for the months and years ahead.

The Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements proposed rule — formally designated CMS-1851-P — was submitted to the Federal Register's Public Inspection Desk in early April 2026 and was officially published in the Federal Register on April 6, 2026. CMS has opened a public comment period extending through June 1, 2026, at 11:59 p.m. Eastern Time, giving providers and stakeholders a meaningful window to submit formal responses to the agency's proposals.

At HealthBridge US, we understand that parsing a comprehensive federal rulemaking document requires time and expertise that many provider organizations may not have in abundance. This educational article has been developed specifically to distill the most actionable elements of the FY 2027 proposed rule into a clear, organized format that your leadership, compliance team, finance department, and clinical staff can readily use for planning and decision-making.

It is essential to note, as CMS itself emphasizes, that this summary does not substitute for a thorough review of the full proposed rule. Providers are strongly advised to engage directly with the complete regulatory text for matters requiring legal interpretation or financial modeling. The complete rule is publicly accessible through the Federal Register, and the CMS summary is available directly from CMS.gov. Reference links are provided at the conclusion of this article.

This document will walk through five major areas of the FY 2027 proposed rule: payment rate updates and the hospice cap; concerns and data findings regarding Medicare non-hospice spending; the newly introduced Service and Spending Variation Index (SSVI); Hospice Quality Reporting Program (HQRP) updates; and information collection requirements and provider obligations.

Let us begin.

Section One: FY 2027 Hospice Payment Rate Updates

The Proposed Payment Update Percentage

Perhaps the single most immediate financial consideration for hospice providers is the proposed payment update percentage for FY 2027. CMS has put forward a hospice payment update rate of 2.4 percent for the upcoming fiscal year.

This figure reflects the application of the inpatient hospital market basket percentage increase, which is then adjusted by a productivity factor as required under law. CMS also notes that if additional or revised data becomes available between the publication of this proposed rule and the finalization of the rule — such as an updated estimate of the inpatient hospital market basket or a revised productivity adjustment — the agency will incorporate that updated data into the final rule as appropriate. In other words, the 2.4 percent figure should be understood as the current best estimate, not a guaranteed final rate.

For providers engaged in multi-year financial planning, this flexibility in the finalization process is worth monitoring closely. Historically, the difference between a proposed and final payment update has been modest, but it is not negligible, and changes in economic indicators between now and the fall could affect the final figure.

Budget Neutrality and the Wage Index

A key structural component of this proposed rule is the treatment of the wage index update. CMS proposes to apply an updated hospice wage index while simultaneously ensuring that the overall effect of the wage index change is budget neutral across all four levels of hospice care. This means that while individual providers may see their reimbursement shift based on geographic wage factors, the aggregate impact on total Medicare hospice expenditures from the wage index change alone is designed to be cost-neutral at the program level.

For providers in higher-wage geographic areas, this neutralization mechanism can sometimes mute the benefit of a positive payment update, while providers in lower-wage areas may benefit from a net positive redistribution. Understanding your organization's geographic wage index value — and how it compares to the national average — is an important step in projecting your facility's actual FY 2027 payment rates.

Proposed FY 2027 Routine Home Care Payment Rates

Routine Home Care (RHC) remains the most frequently billed level of hospice care and therefore carries the most financial significance for the majority of hospice providers. CMS has published proposed RHC rates that reflect the application of the SIA (Service Intensity Add-on) budget neutrality factor, the wage index standardization factor, and the 2.4 percent hospice payment update.

The proposed rate structure for Routine Home Care includes two distinct tiers based on length of enrollment. For beneficiaries in the first 60 days of a hospice election, the FY 2026 base rate of $230.83 is adjusted by an SIA budget neutrality factor of 0.9999, a wage index standardization factor of 1.0009, and the 1.024 payment update multiplier, producing a proposed FY 2027 rate of $236.56. For beneficiaries beyond 60 days of a hospice election, the FY 2026 base rate of $181.94 is similarly adjusted by an SIA budget neutrality factor of 0.9999, a wage index standardization factor of 1.0013, and the 1.024 payment update multiplier, producing a proposed FY 2027 rate of $186.53.

These represent meaningful increases from the prior year and reflect the compound effect of the budget neutrality factor, wage index standardization, and the update percentage applied in sequence.

Proposed FY 2027 CHC, IRC, and GIP Payment Rates

Beyond Routine Home Care, CMS has also published proposed rates for the three remaining levels of hospice care. For Continuous Home Care (CHC), billed under code 652 as a full-rate 24-hour care day, the FY 2026 base rate of $1,674.29 is adjusted by a wage index standardization factor of 1.0079 and the 1.024 payment update, yielding a proposed FY 2027 rate of $1,728.02, which equates to $72.00 per hour. For Inpatient Respite Care (IRC), billed under code 655, the FY 2026 base rate of $532.48 is adjusted by a wage index standardization factor of 1.0022 and the 1.024 update, producing a proposed FY 2027 rate of $546.46. For General Inpatient Care (GIP), billed under code 656, the FY 2026 base rate of $1,199.86 is adjusted by a wage index standardization factor of 1.0033 and the 1.024 update, producing a proposed FY 2027 rate of $1,232.71.

Providers should carefully analyze these rate changes in the context of their individual payer mix, level-of-care distribution, and staffing cost structures to understand the net financial impact on their organizations.

The Annual Payment Update Reduction for Non-Reporters

One of the long-standing features of the Hospice Quality Reporting Program is the financial consequence for organizations that do not satisfy quality data submission requirements. Hospices that fall short of the required quality data submission thresholds are subject to a reduction of 4 percentage points from the annual payment update percentage.

For FY 2027, this means that non-compliant hospices would receive a net update of negative 1.6 percent — the proposed 2.4 percent update minus the 4 percentage point penalty. The resulting payment rates for non-reporting hospices are substantially lower across all levels of care. For RHC Days 1 through 60, non-compliant hospices would receive $227.32, compared to $236.56 for compliant organizations. For RHC Days 61 and beyond, the non-compliant rate would be $179.24, compared to $186.53. For Continuous Home Care, the non-compliant full daily rate drops to $1,660.52, or $69.19 per hour, compared to $1,728.02 for compliant hospices. For Inpatient Respite Care, the non-compliant rate would be $525.11 versus $546.46, and for General Inpatient Care, the non-compliant rate would be $1,184.56 versus $1,232.71.

The financial gap between compliant and non-compliant organizations is real and recurring. For a hospice organization serving several hundred patients at any given time, the cumulative annual impact of the 4-percentage-point reduction can amount to hundreds of thousands of dollars in foregone revenue. Compliance with HQRP reporting requirements is therefore not merely a regulatory obligation — it is a direct financial imperative.

The FY 2027 Hospice Cap Amount

In addition to the per-diem payment rates, CMS has proposed a hospice aggregate cap amount for the FY 2027 cap year of $36,210.11. This figure represents the per-beneficiary limit on total hospice payments that a provider may receive before the cap calculation triggers a repayment obligation.

As with the payment update percentage, CMS has noted that if more current data becomes available prior to finalization of the rule, the agency reserves the right to revise this figure in the final rule. Providers that routinely serve patients with longer lengths of stay — particularly those exceeding 180 days — should give careful attention to this cap amount in their financial planning and census management activities.

Section Two: Medicare Non-Hospice Spending — A Growing Area of Regulatory Focus

Overview and Program Background

One of the most substantive and consequential elements of the FY 2027 proposed rule is CMS's extensive discussion of Medicare non-hospice spending for beneficiaries who are enrolled in the hospice benefit. This is not a new topic, but the scale and trajectory of the data CMS presents in this rule represent a significant escalation in the agency's level of concern — and its apparent appetite for structural intervention.

To understand what CMS means by "non-hospice spending," it is helpful to revisit the basic architecture of the Medicare hospice benefit. Under federal hospice regulations codified at 42 CFR § 418.64, a hospice must directly provide all core hospice services through its own employees, consistent with accepted standards of practice. Furthermore, when a Medicare beneficiary elects the hospice benefit, that individual waives Medicare's obligation to pay for items and services related to the treatment of the terminal illness and related conditions — except for those services furnished by the designated hospice provider and, in limited circumstances, the patient's attending physician.

The conceptual underpinning of this design is that hospice care is intended to be a comprehensive, coordinated benefit. The expectation, which has been articulated in federal rulemaking going back to 1983, is that virtually all necessary care for patients with terminal illnesses should flow through the hospice organization itself, and that services obtained outside the hospice benefit would be rare and atypical. Federal regulations at 42 CFR § 418.24(b)(3) require hospices to actively inform patients that accessing services outside the hospice benefit is the exception, not the norm.

The Data: Non-Hospice Spending Has Grown Dramatically

Since the implementation of the Hospice Election Statement Addendum requirement in FY 2020 — codified through an 84 Federal Register 38484 rulemaking — CMS has been able to track with much greater precision the volume and nature of Medicare payments for items and services furnished to hospice beneficiaries outside the hospice benefit. What the data reveals is a pattern of growth that CMS characterizes as both substantial and consistent.

At the aggregate level, total Medicare payments for non-hospice items and services under Medicare Parts A, B, and D during active hospice elections exceeded $2.8 billion in FY 2024. This figure encompasses a broad range of services and supplies that, under the design of the hospice benefit, the hospice organization itself would typically be expected to cover.

To put this growth trajectory in sharper context, Medicare payments for non-hospice Part A and Part B items and services received by hospice-enrolled beneficiaries increased from approximately $790 million in FY 2020 to more than $2 billion in FY 2024. This represents a rise of roughly $1.3 billion, or approximately 160 percent, over just four fiscal years. The steepest single-year increase in this period occurred between FY 2023 and FY 2024, when non-hospice spending under Parts A and B jumped by approximately $770 million — a 60 percent increase in a single year. These figures reflect a pattern that CMS appears to view as fundamentally inconsistent with the design intent of the hospice benefit.

Provider Type Disparities

The proposed rule also highlights notable disparities in non-hospice spending patterns based on the ownership structure of hospice providers. Specifically, CMS data indicates that beneficiaries receiving hospice care from for-profit hospice organizations have significantly higher non-hospice spending per day compared to beneficiaries under the care of non-profit hospice providers.

As of FY 2024, the per-day non-hospice spending differential for patients receiving services from for-profit hospices was approximately 70 percent higher than the corresponding figure for patients enrolled with non-profit hospices. This represents an increase from the differential observed in FY 2022, when the per-day disparity was approximately 60 percent. The fact that this gap is widening over time is likely to attract continued regulatory scrutiny.

It is important to emphasize that elevated non-hospice spending is not automatically indicative of fraud or intentional billing abuse. There are clinically legitimate reasons why some patients may require services outside the hospice benefit, particularly in complex cases involving conditions unrelated to the terminal diagnosis. However, when patterns appear at scale and show consistent growth, CMS is obligated to examine whether systemic factors — including inadequate coordination of care by hospice organizations, inappropriate election of the hospice benefit for patients who do not meet eligibility criteria, or billing practices that shift costs from the hospice to other parts of Medicare — may be contributing.

The Most Dramatic Growth Areas: Carrier and Physician Supply

Among the many categories of non-hospice spending tracked by CMS, the growth in carrier and physician supply claims has been particularly pronounced. Between FY 2020 and FY 2024, spending in this category increased by approximately 317.5 percent in total, with a notably sharp single-year spike of 63.5 percent between FY 2022 and FY 2023. The growth continued into FY 2024, with an additional increase of approximately 90.8 percent in just one year.

The diagnosis category associated with the largest volume of carrier claims in FY 2024 was pressure ulcers, largely driven by claims associated with skin substitutes. Skin substitutes accounted for nearly half of all carrier claim spending in this category. This finding is significant because the treatment of pressure ulcers — particularly in patients with diagnoses that would predict skin integrity complications — is generally expected to fall within the scope of hospice palliative care rather than separately billed Medicare services.

Non-Hospice Outpatient and Inpatient Services

Beyond the carrier and physician supply category, CMS also observed notable and consistent growth in other categories of non-hospice service utilization. Non-hospice spending related to outpatient services increased by approximately 40.4 percent over the review period, while non-hospice spending related to inpatient services increased by approximately 26.9 percent over the same timeframe.

Additionally, CMS found that approximately 30.1 percent and 25.9 percent of all non-hospice spending occurring in FY 2024 was associated with the primary hospice diagnoses of Alzheimer's disease, dementia, Parkinson's disease, and various heart conditions including congestive heart failure. The fact that significant non-hospice spending is occurring for conditions directly related to a patient's terminal diagnosis — rather than for truly unrelated conditions — is a particular area of concern for CMS.

Part D Non-Hospice Spending

Hospice providers are responsible for covering drugs and biologicals used in the palliation and management of the terminal illness and related conditions while a patient is actively enrolled in hospice care. CMS has also been tracking Part D prescription drug spending for hospice-enrolled beneficiaries.

Non-hospice spending on Part D drugs increased from approximately $552.9 million in FY 2020 to approximately $813.1 million in FY 2024, representing an increase of more than 47 percent. The cumulative total Medicare expenditure for Part D drugs paid outside the hospice benefit from FY 2020 through FY 2024 — including Low-Income Cost-Sharing Subsidy and Covered Drug Plan amounts — was approximately $3.3 billion. Beneficiary cost-sharing in this same period was approximately $335.1 million.

In terms of Part D non-hospice payments broken down by diagnosis coding group for FY 2024, the Heart and Cerebrovascular category carried the largest share at $276,254,111, followed by Neurological and Degenerative conditions at $205,128,738, All Other Diseases at $144,939,013, Respiratory conditions at $100,380,848, and Cancer at $86,405,092, bringing the total to $813,107,802. The prominence of Heart and Cerebrovascular and Neurological and Degenerative conditions at the top of this breakdown is consistent with CMS's broader observation that a substantial portion of non-hospice spending is occurring for conditions directly related to or expected in the context of a patient's terminal illness.

What This Means for Providers

The depth and breadth of CMS's non-hospice spending analysis in this proposed rule is a clear signal that this will be a heightened area of regulatory focus moving forward. Providers should take the following steps proactively:

• Conduct an internal audit of the types of services your enrolled patients are accessing outside your hospice benefit, particularly for diagnoses related to the terminal illness.

• Review your interdisciplinary team processes for comprehensively covering palliative needs — especially skin care, medication management, and symptom control — that may be driving patients or caregivers to seek services elsewhere.

• Ensure that your Hospice Election Statement Addendum processes are robust, that patients and families clearly understand the scope of the hospice benefit, and that documented informed consent accurately reflects what the hospice will and will not cover.

• Examine your relationships with external providers — particularly for skin substitute products, durable medical equipment, and specialist consultations — to identify situations where costs may be inappropriately shifting away from your hospice cost structure and onto Medicare Parts A, B, or D.

• Engage with your compliance program to assess whether your organization's non-hospice spending profile differs significantly from regional or national norms, as elevated non-hospice spending associated with your enrolled population could increase your regulatory risk profile.

Section Three: The Service and Spending Variation Index (SSVI) — A New Program Integrity Tool

Background and Purpose

Among the most significant new developments in the FY 2027 proposed rule is the introduction of the Service and Spending Variation Index, commonly referred to as the SSVI. This is a claims-based scoring methodology that CMS has developed to identify hospice organizations whose utilization patterns and non-hospice spending levels deviate substantially from established norms across multiple independent dimensions simultaneously.

The SSVI was developed in response to CMS's longstanding interest in monitoring hospice utilization, and it reflects the agency's effort to move beyond single-metric surveillance toward a more holistic, multi-dimensional view of hospice program behavior. CMS has been monitoring and publicly releasing data related to hospice utilization for some time, examining variables such as levels of care, lengths of stay, live discharge rates, and the frequency and nature of skilled visits during the final days of life. The SSVI brings these individual data streams together into an integrated scoring system.

The fundamental purpose of the SSVI is not to evaluate or grade hospices on any single measure in isolation, but rather to identify organizations that are simultaneously outliers across multiple independent metrics. CMS has been explicit that a high SSVI score does not by itself constitute a finding of fraud, waste, or abuse — but it does signal a pattern that warrants closer examination. As CMS frames it, a high SSVI score is a potential indicator of program integrity risk, inappropriate utilization, or quality of care concerns, particularly when the score substantially exceeds the scores of the hospice's peers.

How the SSVI Is Structured

The SSVI score is calculated using nine claims-based measures, each capturing a distinct aspect of hospice utilization or non-hospice spending behavior. For each of the nine metrics, CMS has established a threshold value. When a hospice's performance on a given metric crosses the relevant threshold, the organization receives a designated point value for that measure. The individual point values are then summed to produce an overall SSVI score. The scoring range runs from a minimum of zero — meaning no threshold crossings across any of the nine metrics — to a maximum of 16, which reflects the highest possible point assignment across all metrics.

The first eight metrics are utilization-based, each carrying a point value of one. The ninth metric addresses total non-hospice spending and carries a tiered point value ranging from one to eight, making it by far the most heavily weighted component of the index.

Utilization-Based Metrics:

1. Providing no Continuous Home Care and no General Inpatient Care — A hospice that never bills any days at these higher levels of care may be failing to address crisis situations or unmanaged symptoms. The threshold for this metric is zero days billed at either CHC or GIP. Point value: 1.

2. Percentage of Routine Home Care days provided in a nursing home or skilled nursing facility — High rates of nursing facility-based RHC can suggest inappropriate patient selection or overreliance on institutional settings. The threshold is greater than or equal to 40 percent. Point value: 1.

3. Percentage of the last two RHC days of life with visits — A hospice with very low visit rates in the final days of a patient's life may be providing inadequate end-of-life care. The threshold is less than or equal to the 25th percentile of the distribution, which for FY 2025 was 85.7 percent. Point value: 1.

4. Percentage of total discharges that are live discharges — High live discharge rates may indicate inappropriate enrollment or failure to ensure patients meet the six-month terminal prognosis requirement for continued hospice eligibility. The threshold is greater than or equal to the 75th percentile, which for FY 2025 was 47.5 percent. Point value: 1.

5. Percentage of discharges with a length of stay exceeding 180 days — While long lengths of stay are clinically appropriate for some patients, very high rates across a caseload may raise questions about ongoing eligibility. The threshold is greater than or equal to the 75th percentile, which for FY 2025 was 33.2 percent. Point value: 1.

6. Average skilled nursing minutes on Routine Home Care days — Low skilled nursing contact may reflect inadequate service delivery during routine home care. The threshold is less than or equal to the 25th percentile, which for FY 2025 was 9.8 minutes per day. Point value: 1.

7. Weekend RHC days with a skilled visit as a percentage of total RHC days — Skilled visits include nursing, medical social work, or therapy services. Consistently low weekend visit rates may indicate that hospice care is not being consistently delivered across all days of enrollment. The threshold is less than or equal to the 25th percentile, which for FY 2025 was 4.8 percent. Point value: 1.

8. Percentage of live discharges where beneficiaries return to the same hospice within seven days — High rates of rapid re-enrollment following live discharge may suggest problematic discharge and re-election practices designed to circumvent the hospice cap. The threshold is greater than or equal to the 75th percentile, which for FY 2025 was 15 percent. Point value: 1.

Non-Hospice Spending Metric:

9. Total non-hospice spending — This single metric is tiered across eight spending bands and carries the highest possible point value of 8, reflecting the significant weight CMS places on non-hospice spending as a program integrity concern. Using FY 2025 threshold values, a hospice with non-hospice spending greater than zero but no more than $6,352.84 receives 1 point. Spending between $6,352.84 and $20,612.10 receives 2 points. Spending between $20,612.10 and $42,911.79 receives 3 points. Spending between $42,911.79 and $76,801.05 receives 4 points. Spending between $76,801.05 and $133,440.80 receives 5 points. Spending between $133,440.80 and $246,123.10 receives 6 points. Spending between $246,123.10 and $517,204.40 receives 7 points. And spending above $517,204.40 — the highest-spending eighth of hospices — receives the maximum of 8 points.

As this structure demonstrates, the non-hospice spending component alone can account for half of a hospice's maximum SSVI score, underscoring how central this concern is to CMS's overall approach.

Publication and Availability of SSVI Scores

CMS has announced that it will publish SSVI scores calculated from data for FY 2024 and FY 2025 claims, as these years represent the most recent and complete claims data available at the time of rulemaking. The FY 2024 SSVI dataset includes approximately 6,409,155 individual hospice claims, representing 6,735 distinct hospice organizations and approximately 148 million hospice care days. The FY 2025 SSVI dataset includes approximately 6,750,840 hospice claims, representing 6,642 hospices and approximately 156.5 million hospice care days.

CMS may revise these initial SSVI scores based on comments received during the public comment period. Any revisions will be incorporated into the scores published alongside the FY 2027 final rule. In subsequent rulemaking cycles, CMS intends to publish updated SSVI scores using the most recent available claims data.

The distribution of SSVI scores across hospice organizations in both FY 2024 and FY 2025 reveals meaningful variation across the industry. In FY 2024, only 6 hospices — representing 0.1 percent of all organizations — received a score of zero, meaning they triggered no metric thresholds whatsoever. At the other extreme, 28 hospices received a score of 14, and no organizations reached scores of 15 or 16. The largest concentrations of hospices in FY 2024 fell in the score range of 5 through 9, which together accounted for approximately 62 percent of all 6,735 hospices evaluated. A similar pattern held in FY 2025 across 6,642 total hospices, with scores of 5 through 9 again accounting for the majority of organizations. In both years, scores of 11 and above represented a meaningful minority of organizations — roughly 15 to 16 percent — but in absolute numbers, that still translates to hundreds of hospices potentially subject to heightened oversight and scrutiny.

CMS will publish the full SSVI metrics, individual scores, claims-based underlying data, and methodology documentation on the Hospice Center webpage on the CMS website.

What Providers Should Do About the SSVI

The introduction of the SSVI marks a meaningful shift in how CMS will approach hospice oversight. Rather than relying solely on individual audit triggers or complaint-driven investigations, CMS now has a systematic, claims-based scoring tool that can flag hospices for potential review based on their overall utilization and spending profile. Providers are encouraged to take the following steps in response:

• Proactively analyze your own utilization data against each of the nine SSVI metrics. Even before CMS publishes your organization's score, you can use your own claims and encounter data to assess where you may fall relative to the published thresholds.

• Pay particular attention to the non-hospice spending metric, as this carries the most weight in the SSVI scoring structure. If your enrolled population is generating elevated non-hospice Medicare spending, understanding the drivers and addressing them is essential.

• Review your live discharge rate and re-admission patterns, as these are common areas of scrutiny in hospice program integrity reviews.

• Examine your weekend and end-of-life visit patterns to ensure that service delivery is consistent across all days of enrollment and that patients are receiving adequate skilled nursing and other clinical contact during the final days of life.

• Engage your compliance and quality teams to develop a response protocol for when your SSVI scores are published — including a process for disputing or explaining data anomalies, if applicable.

Section Four: Hospice Quality Reporting Program (HQRP) Updates

Overview of Quality Reporting in the Hospice Benefit

The Hospice Quality Reporting Program (HQRP) is the mechanism through which CMS collects, validates, and publicly reports data on the quality of care delivered by Medicare-certified hospice organizations. Participation in HQRP is tied directly to hospice reimbursement, and failure to meet HQRP requirements results in the annual payment update penalty described in Section One of this article.

The FY 2027 proposed rule contains several meaningful updates and proposals related to HQRP, including proposals affecting quality measure reporting thresholds, public transparency tools on Medicare.gov, and potential future changes to quality measures currently under development.

The Hospice Outcomes and Patient Evaluation (HOPE) Tool

A central data collection instrument in HQRP is the Hospice Outcomes and Patient Evaluation (HOPE) tool, which captures standardized patient-level information at multiple points during the hospice care episode. CMS requires hospices to submit 90 percent of required HOPE records within 30 days of each triggering event — which can include admission, discharge, or one of up to two Hospice Update Visit (HUV) timepoints based on patient stay duration.

Most noncompliance with HQRP requirements arises from organizations falling below this 90 percent submission threshold. CMS has noted that training and education resources are available online and through the HQRP Training and Education Library to help hospice staff understand and meet these requirements. The proposed rule also incorporates the Hospice Item Set (HIS) and the Consumer Assessment of Healthcare Providers and Systems (CAHPS) Hospice Survey as the other two primary data collection instruments within HQRP. The HIS is used for reporting on calendar year 2025 data, which will affect Annual Payment Update determinations for FY 2027. Organizations should ensure that their staff and data systems are aligned with current HIS and CAHPS reporting requirements.

The reporting timeline connecting calendar year data collection to fiscal year payment update consequences is as follows. Calendar year 2025 data drives the FY 2027 APU determination, with CY 2024 serving as the CAHPS reference year. Calendar year 2026 data drives the FY 2028 APU, with CY 2025 as the CAHPS reference year. Calendar year 2027 data drives the FY 2029 APU, with CY 2026 as the reference year. And calendar year 2028 data drives the FY 2030 APU, with CY 2027 as the reference year.

This timeline makes clear that data being collected and submitted right now — during calendar years 2025 and 2026 — will directly determine whether your organization receives the full FY 2027 and FY 2028 payment updates, respectively. Real-time attention to data submission accuracy and completeness is therefore critical.

Proposed Medicare.gov Compare Tool Icon for Non-Reporters

A notable new public transparency proposal in the FY 2027 rule involves the display of a visual indicator — an icon — on the Medicare.gov Compare Tool for hospices that fail to meet the required quality data submission thresholds for the Annual Payment Update.

The proposed icon would be visible to consumers and caregivers on both the provider search page and the individual hospice profile page on Medicare.gov, functioning similarly to the indicators already in use for nursing homes and hospitals on the same platform. This change would make a hospice organization's HQRP compliance status publicly visible to any individual searching for hospice services through the CMS consumer-facing website.

Specifically, the icon would be added or removed on an annual basis, giving hospices time to review and correct their data and achieve compliance before the icon is applied for a new cycle. The purpose of the icon is to notify prospective patients and families that the hospice did not report sufficient quality data to CMS during the applicable reporting period. Additional context and consumer guidance would be provided on the Compare Tool to explain the significance of the icon and how it should be considered in choosing a hospice provider.

CMS is specifically soliciting public comment on this proposal. Providers and their advocacy organizations have an opportunity to submit formal comments on the appropriateness of this transparency mechanism, the potential consumer impact, and any concerns about how the icon might be misinterpreted or used in ways that do not accurately reflect overall care quality.

For providers, the practical implication is clear: even if your organization is willing to absorb the 4-percentage-point payment reduction as a financial trade-off, the reputational and consumer-facing consequences of a public non-compliance indicator may represent a far more significant long-term risk to your business. Patient acquisition in the hospice market is highly influenced by referral source and family confidence — a visible non-compliance icon on a federal consumer platform could meaningfully affect referral volumes and market share.

Future Quality Measure Development: The HCI Measure

CMS also discusses ongoing work related to the Hospice Care Index (HCI) measure within the HQRP framework. A Technical Expert Panel convened in November 2024 provided input on potential modifications to the HCI and on potential new indicator development. Based on that feedback and additional analysis, CMS is currently evaluating changes to the HCI measure and anticipates submitting a revised version of the measure to the 2026 Measures Under Consideration list for further review. The goal of this re-specification process is to ensure that the HCI measure provides actionable, meaningful information for both providers working to improve care and consumers making decisions about hospice selection.

Providers who have incorporated the current HCI measure into their quality improvement programs should monitor future rulemaking and guidance for details on any changes to the measure's specifications, as such changes could affect how hospice performance data is calculated and reported going forward.

CAHPS Hospice Survey Requirements

The CAHPS Hospice Survey remains a core component of HQRP and is administered to caregivers and family members of recently deceased hospice patients. The survey gathers information on the patient and family experience across domains including communication, care coordination, symptom management, and overall satisfaction.

The CAHPS component of HQRP includes a size exemption for small hospices based on the number of eligible survey respondents in the reference year. Hospices that believe they may qualify for a size exemption should consult directly with their HQRP resources or CMS guidance to confirm their eligibility status.

Section Five: Information Collection and the Mandatory Election Statement Addendum

Background on the Election Statement Addendum

As part of its ongoing effort to improve transparency and informed decision-making for hospice patients and their families, CMS has maintained and refined requirements related to the Hospice Election Statement Addendum. This document is provided to beneficiaries upon request and is designed to give them clear information about what items and services the hospice will not cover under the hospice benefit — either because those items and services are unrelated to the terminal diagnosis, or because the hospice has made a specific clinical determination about coverage.

The Election Statement Addendum requirement originated in FY 2020 rulemaking and has been a subject of ongoing policy development since then. The FY 2027 proposed rule contains specific discussion of the information collection requirements associated with the addendum, including how wage data is used in assessing the administrative burden associated with these requirements.

Information Collection Requirements Under the Proposed Rule

CMS is soliciting public comment on three distinct areas related to information collection in the context of this proposed rule. First, CMS is seeking input on the wage data used for the proposed Mandatory Election Statement Addendum, specifically whether its current wage assumptions and burden estimates accurately reflect the real-world costs experienced by hospice organizations when completing and delivering this document. Second, CMS is seeking comment on any new or modified information collection requirements proposed in this rule, in accordance with the Paperwork Reduction Act. Third, CMS is seeking comment on its estimates of the administrative time and cost burden placed on hospice organizations by the Election Statement Addendum requirements overall.

Providers who feel that CMS's burden estimates do not accurately reflect the true administrative cost of these requirements are encouraged to submit detailed comments with supporting data. This is an area where well-documented provider feedback can meaningfully influence CMS's final determinations.

Section Six: How to Submit Comments and Key Deadlines

Public Comment Period

The FY 2027 proposed rule is currently in its public comment phase. The comment period is open until June 1, 2026, at 11:59 p.m. Eastern Time. CMS will review all timely submitted comments and will respond to substantive public comments in the preamble to the final rule when it is published later this calendar year.

Providers, trade associations, advocacy organizations, and individual stakeholders are all eligible to submit comments. Comments should be directed through the official Federal Register rulemaking portal and should reference the docket number CMS-1851-P.

Why Submitting Comments Matters

The public comment process is not ceremonial. CMS is legally required to consider substantive comments and, in many cases, has modified proposed rules in response to public input — adjusting payment methodologies, phasing in new requirements, or clarifying ambiguous regulatory language. When a large number of hospice providers submit consistent, data-supported comments on a particular issue, the cumulative weight of that input can meaningfully shape the final rule.

Areas where provider comment is particularly encouraged include the accuracy of proposed payment rates and cap amounts as they apply to specific geographic markets or patient populations; the SSVI methodology, including whether the nine metrics and their respective thresholds are appropriate and whether any metrics may inadvertently penalize hospices serving specific clinical populations; the proposed Compare Tool icon for non-reporting hospices, including concerns about consumer misinterpretation and disproportionate reputational impact; information collection burden estimates related to the Election Statement Addendum; and the non-hospice spending data and analysis, including whether CMS's proposed interpretations and potential interventions are appropriate.

Section Seven: Strategic and Operational Takeaways for Hospice Leaders

For Chief Executive Officers and Senior Leadership

The FY 2027 proposed rule sends several clear signals to hospice organization leaders about where the regulatory environment is heading.

Program integrity will intensify. The SSVI introduces a systematic, data-driven tool for flagging hospices for potential oversight. This is not a temporary development — it is the beginning of a more sophisticated, metrics-driven approach to hospice compliance monitoring. Organizations that have not invested in robust internal compliance infrastructure should do so now.

Non-hospice spending will be scrutinized more aggressively. The breadth and depth of CMS's non-hospice spending analysis in this rule make it evident that the agency views this as a structural problem requiring structural solutions. Hospices whose enrolled populations generate high levels of non-hospice Medicare spending are at elevated risk for audits, payment denials, and potentially adverse enforcement actions.

Quality reporting compliance is non-negotiable. The proposed Compare Tool icon elevates the consequences of HQRP non-compliance from a purely financial penalty to a reputational one. In a competitive hospice market, public visibility of non-compliance on Medicare.gov could have lasting effects on referral volumes and patient census.

Patient election and eligibility practices warrant review. Several of the SSVI metrics — including live discharge rates, re-election patterns, and lengths of stay exceeding 180 days — relate directly to the integrity of the hospice election and recertification process. Ensuring that your clinical and eligibility review processes are rigorous and well-documented is more important than ever.

For Finance and Revenue Cycle Teams

• Model the proposed FY 2027 payment rates against your current level-of-care distribution and volume projections.

• Assess the financial impact of the hospice cap amount of $36,210.11 on any patients at risk of exceeding the per-beneficiary cap threshold.

• Evaluate your HQRP compliance status for CY 2025 data submissions — which will determine your FY 2027 APU — and address any submission gaps immediately.

• Build scenarios for both the full 2.4 percent update and a possible final rule adjustment in the event CMS revises the rate before finalization.

For Compliance and Quality Teams

• Map your organization's utilization data to each of the nine SSVI metrics and identify any areas where you may be approaching or exceeding the applicable thresholds.

• Conduct a comprehensive review of your non-hospice spending profile — by patient, by condition, and by service type — to identify drivers and develop mitigation strategies.

• Ensure that your HOPE data submission is consistently meeting the 90 percent threshold requirement and that staff responsible for data entry understand current HQRP requirements.

• Develop a formal SSVI response protocol, including processes for disputing inaccurate data and for communicating internally when scores are published.

For Clinical Leadership

• Review your interdisciplinary team's care planning processes to ensure comprehensive coverage of palliative needs, particularly for conditions commonly associated with non-hospice spending such as skin integrity management, cardiac symptom management, and neurological support.

• Examine visit patterns — particularly weekend visits and end-of-life visits — to ensure that your clinical delivery model is meeting patients' needs consistently across all enrollment days.

• Assess your organization's CHC and GIP utilization to ensure that crisis-level care is being made available and utilized when clinically appropriate. Consistent absence of these levels of care is a specific SSVI flag that CMS will be watching.

Conclusion: Staying Ahead of the Regulatory Curve

The FY 2027 Hospice Wage Index and Payment Rate Update Proposed Rule reflects a Medicare hospice program that is maturing in its oversight sophistication while growing in scale and complexity. The payment update of 2.4 percent provides modest financial relief, but the accompanying regulatory developments — particularly the SSVI, the non-hospice spending analysis, and the proposed public transparency enhancements — demand serious attention from every hospice organization in the country.

At HealthBridge US, we are committed to keeping our provider community informed, prepared, and equipped to navigate these changes with confidence. The public comment period provides a timely opportunity for your organization's voice to be heard in shaping the final rule. We encourage all providers to review the complete proposed rule, engage your legal and compliance counsel, and participate actively in the federal rulemaking process.

The key action items from this article are to review and model the proposed FY 2027 payment rates for all four levels of care; evaluate your position relative to the $36,210.11 cap amount; audit your non-hospice spending profile and develop mitigation strategies; assess your organization's SSVI score exposure across all nine metrics; verify HQRP compliance for CY 2025 data submissions; submit public comments to CMS by June 1, 2026, at 11:59 p.m. ET; and educate your clinical, finance, and compliance teams on the provisions of this rule.

The regulatory environment for hospice care is evolving rapidly. Organizations that engage proactively with proposed rules — rather than waiting for final rules to take effect — are far better positioned to adapt, advocate, and thrive.

References

1. CMS FY 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Proposed Rule (CMS-1851-P) — Federal Register Public Inspection: https://www.federalregister.gov/public-inspection

2. CMS Summary of the FY 2027 Hospice Proposed Rule: https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice

3. CMS Hospice Center — SSVI Data, Metrics, and Methodology Documentation: https://www.cms.gov/medicare/enrollment-renewal/providerssuppliers/hospice-center

4. HQRP Requirements and Best Practices (CMS): https://www.cms.gov/medicare/quality/hospice/hqrp-requirements-and-best-practices

5. HQRP Training and Education Library: https://www.cms.gov/medicare/quality/hospice

6. Fall 2024 HQRP Technical Expert Panel (TEP) Summary Report: https://www.cms.gov/files/document/fall-2024-hqrp-tep-summary-report1508c.pdf

7. CHAP Summary Article on the FY 2027 Hospice Proposed Rule: https://www.chapinc.org

8. CMS Medicare.gov Hospice Compare Tool: https://www.medicare.gov/care-compare/

9. Federal Hospice Regulations — 42 CFR Part 418: https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-418

10. Submit Public Comments on CMS-1851-P: https://www.regulations.gov
    

This article was prepared by HealthBridge US for educational and informational purposes only. It is intended to assist hospice providers in understanding and navigating recent regulatory developments. Nothing in this article constitutes legal, financial, or compliance advice. Providers should consult qualified legal counsel and compliance professionals regarding the specific application of these regulations to their organizations. All regulatory figures cited in this article are based on CMS's proposed rule as published; final figures will be established in the FY 2027 final rule, expected to be published in the summer or early fall of 2026.

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