Medicare Boosts Hospice Payments by 2.6% Amidst Industry Concerns
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A final rule issued by the U.S. Centers for Medicare & Medicaid Services (CMS) on Friday will increase hospice Medicare base rate payments by 2.6%—a slight increase from the 2.4% originally proposed in April. The change, slated to take effect in 2026, represents a $750 million increase in federal hospice spending and raises the aggregate hospice payment cap to $35,361.44.
Despite the increase,industry leaders express reservations about whether the adjustment is sufficient to address the mounting financial pressures facing hospice providers.
Payment Increase Deemed “Insufficient†by Providers
The 2.6% pay hike is “insufficient†for hospice providers grappling with rising costs and a nationwide healthcare workforce crisis, according to a statement from Dr. Steve Landers, CEO of the National Alliance for Care at Home.
“While the finalized 2.6% payment update is still insufficient for providers that face persistent inflationary forces amid an ongoing nationwide healthcare workforce crisis, we recognize CMS’s incorporation of Alliance feedback to help streamline regulatory requirements,†Landers stated. “We will continue to partner with CMS to advocate for home-based care rulemaking that focuses on comprehensive long-term strategy to best serve both the American people and the Medicare trust fund. Evidence consistently demonstrates that hospice care aligns with patient and family preferences and saves the American health care system money.â€
Tom Koutsoumpas, CEO of the National Partnership for Healthcare and hospice Innovation (NPHI), echoed this sentiment, acknowledging the increase as a welcome, albeit modest, relief.“NPHI is pleased to see CMS confirm a payment rate increase for hospices across the US,†koutsoumpas said in an email. “In the current habitat, even a modest increase provides some relief and stability for providers. At the same time, nonprofit, mission-driven, community-based hospice organizations continue to face real financial and workforce pressures as they work to deliver high-quality, person-centered care.â€
Regulatory Clarifications and the HOPE Tool
the final rule also includes clarifications regarding hospice admissions and documentation requirements. Specifically, the rule states that the physician member of the interdisciplinary group (IDG) can now recommend admission to hospice care, aligning Conditions of Participation and Conditions of Payment. Moreover, hospice face-to-face encounter attestations must be signed and dated by a physician or nurse practitioner, with clinicians able to satisfy this requirement through a signed and dated clinician note.
Though, CMS remains firm on its October 1, 2025, implementation date for the Hospice Outcomes and Patient Evaluation (HOPE) tool, a quality measurement system. This decision comes despite calls for a delay from industry stakeholders.
“HOPE will provide assessment-based quality data to enhance the HQRP through standardized data collection, provide a better understanding of patient care needs, contribute to the patient’s plan of care, and provide additional clinical data that could inform future payment refinements,†CMS indicated in the rule language.
The alliance expressed strong disappointment with the lack of versatility regarding the HOPE tool’s implementation. “Despite responsiveness in other areas, the Alliance is deeply disappointed that CMS did not heed recommendations and delay the Oct. 1, 2025 implementation of the [HOPE] tool nor waive the timeliness completion requirement for HOPE record submission,†the Alliance indicated in a statement. “We expect providers to face a burdensome transition and urge CMS to remain responsive to real-world challenges,offering flexibility as providers navigate the change.â€
The industry now faces the challenge of adapting to these changes while continuing to navigate a complex economic landscape and workforce shortages, all while striving to provide compassionate end-of-life care.
