On July 30, 2026, the Centers for Medicare & Medicaid Services (CMS) issued its final rule updating Medicare hospice payment rates for fiscal year 2027, which runs from October 1, 2026, through September 30, 2027. Alongside the annual rate update, the rule puts in place new transparency measures, including a public scoring index for hospices and a written coverage disclosure for every patient who chooses hospice.

The Final Payment Update

CMS finalized a 2.3% increase to hospice payment rates for FY 2027, which the agency estimates will add about $755 million in Medicare hospice payments compared with FY 2026. The update combines a 3.2% market basket increase (reflecting the rising cost of goods, services, and labor) with a 0.9 percentage point productivity reduction required by law.

The final figure is slightly lower than the 2.4% CMS proposed in April, because the productivity reduction grew from 0.8 to 0.9 percentage points. For comparison, the FY 2026 update was 2.6%, and the FY 2025 update, which we covered in a previous post, was 2.9%. Hospice groups have voiced concern that increases of this size do not keep pace with the real cost of delivering care.

The annual hospice cap, which limits the total Medicare payments a hospice may receive per patient, rises to $36,174.75 for FY 2027, up from $35,361.44. Hospices that do not submit required quality data will receive a 1.7% decrease instead of the increase.

A Public Scoring Index for Hospices

CMS finalized the Service and Spending Variation Index (SSVI) without changes to its proposed method. The index scores each hospice using nine claims-based measures of how its patients use hospice services and how much Medicare spends on their care outside the hospice benefit. Higher scores point to patterns that may call for education or closer oversight, and CMS has published each hospice’s score.

The index is part of a broader CMS effort to strengthen oversight of the hospice benefit. For the many mission-driven hospices that provide excellent care, the goal is greater accountability across the industry and better protection for patients.

More Information for Patients and Families

Starting October 1, 2026, every hospice must give each patient, or the patient’s representative, a written election statement addendum when they choose hospice. The addendum lists the items, services, and drugs the hospice has decided are unrelated to the terminal illness and therefore will not cover. Until now, families received it only if they asked. For families already making difficult decisions, this puts important coverage information in their hands from the start.

CMS also finalized a plan to mark hospices that do not report required quality data with an icon on the Medicare Care Compare website, beginning no earlier than FY 2028, so families researching their options can see which providers are not reporting.

What Else Is in the Rule

The rule keeps the current approach to the hospice wage index, which adjusts payments for local labor costs. CMS also asked for public input, without proposing new policies, on ways to improve palliative care outside the hospice benefit and on developing a hospice-specific wage index.

Finding the Right Hospice Provider

Changes in policy and payment are ultimately about one thing: making sure patients receive compassionate, high-quality end-of-life care. If you or a loved one are considering hospice, we can help you connect with a trusted provider in your area. Call 1-800-HOSPICE (1-800-467-7423) or find a provider near you.