CMS Releases Fiscal Year 2027 Hospice Wage Index and Payment Rate Update Proposed Rule, Alliance

On April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the fiscal year (FY) 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program (HQRP) Requirements proposed rule. CMS has also released a fact sheet  accompanying the proposed rule. The overall impact of the rule is an estimated $785 million in increased hospice payments in FY 2027.

 Key provisions include:

• Proposed Payment Rate Update. CMS is proposing a 2.4% increase for FY 2027, which reflects a 3.2% market basket percentage increase, decreased by a 0.8 percentage point productivity adjustment.
• Proposed Hospice Cap Amount. CMS proposes a hospice cap amount for the FY 2027 cap year of $36,210.11, which is equal to the FY 2026 cap amount ($35,361.44) updated by the proposed FY 2027 hospice payment update percentage of 2.4%.
• Service and spending variation index (SSVI). The proposed rule outlines the creation of a SSVI that can be used to identify hospices that are outliers across many different utilization metrics and those that have a high level of non-hospice spending. CMS has published each hospice’s SSVI  as part of the proposed rule.
• Proposed Election Statement Addendum Mandatory for All Medicare Beneficiaries at the Time of Election. CMS is proposing to require that hospices provide the hospice election statement addendum to all Medicare beneficiaries at the time of hospice election for hospice elections beginning on or after October 1, 2026.
• Technical Regulations Text Changes:
• CMS is proposing conforming regulation text changes to allow a physician designee and the physician member of the interdisciplinary group, in addition to the hospice medical director, to discharge a patient from hospice care.
• CMS is proposing conforming regulation text changes to the hospice telehealth face-to-face policy in accordance with the Consolidated Appropriations Act, 2026.

Comments on the proposed rule are due by June 1, 2026. CAHSAH will work closely with the Alliance to draft public comment for submission to CMS.