[Federal Register Volume 90, Number 148 (Tuesday, August 5, 2025)]
[Rules and Regulations]
[Pages 37404-37431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-14782]
[[Page 37404]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1835-F]
RIN 0938-AV49
Medicare Program; FY 2026 Hospice Wage Index and Payment Rate
Update and Hospice Quality Reporting Program Requirements
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Final rule.
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SUMMARY: This final rule updates the hospice wage index, payment rates,
and aggregate cap amount for Fiscal Year (FY) 2026. This rule also
finalizes changes to the admission to hospice regulations and the
hospice face-to-face attestation requirements under the certification
of terminal illness regulations and includes technical changes to the
hospice telehealth policy and wage index. This final rule also includes
a technical correction to the regulatory text and provides updates to
the Hospice Quality Reporting Program requirements.
DATES: These regulations are effective on October 1, 2025.
FOR FURTHER INFORMATION CONTACT:
For general questions about hospice payment policy, send your
inquiry via email to: [email protected].
For questions regarding the CAHPS[supreg] Hospice Survey, contact
Lauren Fuentes at (410) 786-2290.
For questions regarding the hospice quality reporting program,
contact Jermama Keys at (410) 786-7778.
SUPPLEMENTARY INFORMATION:
I. Executive Summary
A. Purpose
This final rule updates the hospice wage index, payment rates, and
cap amount for FY 2026 as required under section 1814(i) of the Social
Security Act (the Act). In addition, this final rule amends the payment
regulations to specify that the physician member of the hospice
interdisciplinary group (IDG) may recommend admission to hospice. This
final rule also amends the attestation requirements at 42 CFR
418.22(b)(4) to align with the original intent of the CY 2011 Home
Health Prospective Payment System (HH PPS) final rule and statutory
requirements under section 1814(a)(7) of the Act for the certification
of terminal illness to include the physician's or nurse practitioner's
signature and the date of the signature on each face-to-face encounter
attestation, and incorporate commenter suggestions on the proposed
policy. This rule also includes a waiver of proposed rulemaking making
a technical correction to conform the end date of the allowance of
telehealth to perform the face-to-face encounter for the sole purpose
of hospice recertification codified at Sec. 418.22(a)(4)(ii) to the
end date set forth in statute at section 1814(a)(7)(D)(i)(II) of the
Act and setting the wage index for hospices that provide services in
the Northern Mariana Islands and American Samoa to the wage index for
CBSA 99965 (Guam).
This final rule corrects an error in the regulations text at Sec.
418.312(j). This rule also reinforces updates on the Hospice Quality
Reporting Program (HQRP) and the Hospice Outcomes and Patient
Evaluation (HOPE) instrument and public reporting, future quality
measures (QMs), and the transition of hospice providers from the
Quality Improvement and Evaluation System (QIES) to the internet
Quality Improvement and Evaluation System (iQIES). The proposed rule
(90 FR 18568) also included RFIs related to the transition to digital
measures, nutrition, and well-being concepts.
B. Summary of the Major Provisions
Section III.A.1. of this final rule includes updates to the hospice
wage index and makes the application of the updated wage data budget
neutral for all four levels of hospice care.
Section III.A.2. of this final rule includes the final FY 2026
hospice payment update percentage of 2.6 percent.
Section III.A.3. of this final rule includes the final FY 2026
hospice payment rates.
Section III.A.4. of this final rule includes the final update to
the hospice cap amount for FY 2026 by the hospice payment update
percentage of 2.6 percent.
Section III.B. of this final rule specifies that the physician
member of the interdisciplinary group is among the types of physicians
who can recommend a patient's admission to hospice care and adds the
physician member of the interdisciplinary group to the regulatory text
at Sec. 418.25.
Section III.C. of this final rule re-aligns the attestation
requirements in the regulatory text at Sec. 418.22(b)(4) with the
original intent of the statutory requirements under section 1814(a)(7)
of the Act and CY 2011 HH PPS final rule for the certification of
terminal illness regulations to include the physician's or nurse
practitioner's signature and the date of the signature on each face-to-
face encounter attestation. This section also incorporates suggestions
from commenters to allow the actual face-to-face encounter clinical
note to satisfy the statutory requirement for the hospice physician or
nurse practitioner to attest to the encounter.
Section III.D. of this final rule includes a technical correction
to the regulatory text at Sec. 418.22(a)(4)(ii) that was not proposed.
This technical correction extends the use of telehealth by a hospice
physician or hospice nurse practitioner to conduct a face-to-face
encounter for the sole purpose of hospice recertification through
September 30, 2025 in accordance with section 1814(a)(7)(D)(i)(II) of
the Act, as amended by section 2207(f) of the Full-Year Continuing
Appropriations and Extensions Act, 2025 (Pub. L. 119-4).
Section III.E. of this final rule includes a technical correction
to a typographical error in the FY 2024 Hospice final rule at Sec.
418.312(j). This section provides updates on the HOPE instrument, HQRP
measures, and the transition to iQIES. This section also provides RFIs
related to the transition to digital measures, nutrition, and well-
being concepts.
Section IV. of this final rule includes a Waiver of Notice of
Proposed Rulemaking for technical corrections to the regulatory text at
Sec. 418.22(a)(4)(ii) and to include, in the FY 2026 hospice wage
index, the wage indexes for the Northern Mariana Islands and American
Samoa. While we do not believe that either the corrections to Sec.
418.22(a)(4)(ii) or the addition to the wage index requires notice and
comment rulemaking, as explained in section IV, of this final rule,
there is good cause to waive such rulemaking if it were required.
C. Summary of Impacts
The overall economic impact of this final rule is estimated to be
$750 million in increased payments to hospices in FY 2026.
II. Background
A. Hospice Care
Hospice care is a comprehensive, holistic approach to treatment
that recognizes the impending death of a terminally ill individual and
warrants a change in the focus from curative care to palliative care
for relief of pain and for symptom management. Medicare regulations
define ``palliative care'' as patient and family-centered care that
[[Page 37405]]
optimizes quality of life by anticipating, preventing, and treating
suffering. Palliative care throughout the continuum of illness involves
addressing physical, intellectual, emotional, social, and spiritual
needs and to facilitate patient autonomy, access to information, and
choice (42 CFR 418.3). Palliative care is at the core of hospice
philosophy and care practices and is a critical component of the
Medicare hospice benefit.
The goal of hospice care is to help terminally ill individuals
continue life with minimal disruption to normal activities while
remaining primarily in the home environment. A hospice uses an
interdisciplinary approach to deliver medical, nursing, social,
psychological, emotional, and spiritual services through a
collaboration of professionals and other caregivers, with the goal of
making the beneficiary as physically and emotionally comfortable as
possible. Hospice is compassionate beneficiary- and family/caregiver-
centered care for those who are terminally ill.
As referenced in our regulations at Sec. 418.22(c)(1), to be
certified for Medicare hospice services, the patient's attending
physician (if any) and the hospice medical director (or designee) or
physician member of the interdisciplinary group must certify that the
individual is ``terminally ill,'' as defined in section 1861(dd)(3)(A)
of the Act and our regulations at Sec. 418.3; that is, the individual
has a medical prognosis that the individual's life expectancy is 6
months or less if the illness runs its normal course (42 CFR
418.22(b)(1)). The regulations at Sec. 418.22(b)(2) require that
clinical information and other documentation that support the medical
prognosis accompany the certification and be filed in the medical
record with the written certification. The regulations at Sec.
418.22(b)(3) require that the certification and recertification forms,
or an addendum to the certification and recertification forms, include
a brief narrative explanation of the clinical findings that supports a
life expectancy of 6 months or less.
Under the Medicare hospice benefit, the election of hospice care is
a patient choice, and once a terminally ill patient elects to receive
hospice care, a hospice interdisciplinary group is essential in the
seamless provision of primarily home-based services. The hospice
interdisciplinary group works with the beneficiary, family, and
caregivers to develop a coordinated, comprehensive care plan; reduce
unnecessary diagnostics or ineffective therapies; and maintain ongoing
communication with individuals and their families about changes in
their condition. The beneficiary's care plan will shift over time to
meet the changing needs of the individual, family, and caregiver(s) as
the individual approaches the end of life.
If, in the judgment of the hospice interdisciplinary group (as
specified at Sec. 418.56(a)(1)), which includes the hospice physician,
the patient's symptoms cannot be effectively managed at home, then the
patient is eligible for general inpatient care (GIP), a more medically
intense level of care. GIP must be provided in a Medicare-certified
hospice freestanding facility, skilled nursing facility, or hospital.
GIP is provided to ensure that any new or worsening symptoms are
intensively addressed so that the beneficiary can return home for
hospice care (routine home care) (RHC). Limited, short-term,
intermittent, inpatient respite care (IRC) is also available because of
the absence or need for relief of the family or other caregivers.
Additionally, an individual can receive continuous home care (CHC)
during a period of crisis in which an individual requires continuous
care to achieve palliation or management of acute medical symptoms so
that the individual can remain at home. CHC may be covered for as much
as 24 hours a day, and these periods must be predominantly nursing
care, in accordance with the regulations at Sec. 418.204. A minimum of
8 hours of nursing care or nursing and aide care must be furnished on a
particular day to qualify for the CHC rate (Sec. 418.302(e)(4)).
Hospices covered by this final rule must comply with applicable
civil rights laws, including section 504 of the Rehabilitation Act of
1973 and the Americans with Disabilities Act, which prohibit covered
entities from discriminating against individuals based on disability.
This includes requiring covered entities to take appropriate steps to
ensure that communications with applicants, participants, members of
the public, and companions with disabilities are as effective as
communications with others. Covered entities must also provide
appropriate auxiliary aids and services when necessary to afford
qualified individuals with disabilities, including applicants,
participants, beneficiaries, companions, and members of the public, an
equal opportunity to participate in, and enjoy the benefits of, a
service, program or activity of a covered entity.\1\
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\1\ Hospices receiving Medicare Part A funds or other Federal
financial assistance from the Department are also subject to
additional Federal civil rights laws, including the Age
Discrimination Act, and are subject to conscience and religious
freedom laws where applicable.
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B. Services Covered by the Medicare Hospice Benefit
Coverage under the Medicare hospice benefit requires that hospice
services must be reasonable and necessary for the palliation and
management of the terminal illness and related conditions. Section
1861(dd)(1) of the Act establishes the services that are to be rendered
by a Medicare-certified hospice program. These covered services
include: nursing care; physical therapy; occupational therapy; speech-
language pathology services; medical social services; home health aide
services (called hospice aide services); physician's services;
homemaker services; medical supplies (including drugs and biologicals);
medical appliances; counseling services (including dietary counseling);
short-term inpatient care in a hospital, nursing facility, or hospice
inpatient facility (including both respite care and procedures
necessary for pain control and acute and chronic symptom management);
continuous home care during periods of crisis, and only as necessary to
maintain the terminally ill individual at home; and any other item or
service which is specified in the plan of care and for which payment
may otherwise be made under Medicare, in accordance with Title XVIII of
the Act.
Section 1814(a)(7)(B) of the Act requires that a written plan for
providing hospice care to a beneficiary who is a hospice patient be
established before such care is provided by, or under arrangements made
by, the hospice program; and that the written plan be periodically
reviewed by the beneficiary's attending physician (if any), the hospice
medical director, and an interdisciplinary group (section
1861(dd)(2)(B) of the Act). The services offered under the Medicare
hospice benefit must be available to beneficiaries as needed, 24 hours
a day, 7 days a week (section 1861(dd)(2)(A)(i) of the Act).
Upon the implementation of the hospice benefit, Congress also
expected hospices to continue to use volunteer services, although
Medicare does not pay for these volunteer services (section
1861(dd)(2)(E) of the Act). As stated in the Health Care Financing
Administration's (now Centers for Medicare & Medicaid Services (CMS))
proposed rule: Medicare Program; Hospice Care (48 FR 38149), the
hospice must have an interdisciplinary group composed of paid hospice
employees as well as hospice volunteers, and that
[[Page 37406]]
``the hospice benefit with the resulting Medicare reimbursement is not
intended to diminish the voluntary spirit of hospices.'' This
expectation supports the hospice philosophy of community based,
holistic, comprehensive, and compassionate end of life care.
C. Medicare Payment for Hospice Care
Sections 1812(d), 1813(a)(4), 1814(a)(7), 1814(i), and 1861(dd) of
the Act, and the regulations in 42 CFR part 418, establish eligibility
requirements, payment standards and procedures; define covered
services; and delineate the conditions a hospice must meet to be
approved for participation in the Medicare program. Part 418, subpart
G, provides for a per diem payment based on one of four prospectively
determined rate categories of hospice care (RHC, CHC, IRC, and GIP),
based on each day a qualified Medicare beneficiary is under hospice
care (once the individual has elected the benefit). This per diem
payment is meant to cover all hospice services and items needed to
manage the beneficiary's care, as required by section 1861(dd)(1) of
the Act.
While payment made to hospices is to cover all items, services, and
drugs for the palliation and management of the terminal illness and
related conditions, federal funds cannot be used for prohibited
activities, even in the context of a per diem payment. For example,
hospices are prohibited from playing a role in medical aid in dying
(MAID) where such practices have been legalized in certain States. The
Assisted Suicide Funding Restriction Act of 1997 (Pub. L. 105-12, April
30, 1997) prohibits the use of federal funds to provide or pay for any
health care item or service or health benefit coverage for the purpose
of causing, or assisting to cause, the death of any individual
including ``mercy killing, euthanasia, or assisted suicide.'' However,
the prohibition does not pertain to the provision of an item or service
for the purpose of alleviating pain or discomfort, even if such use may
increase the risk of death, so long as the item or service is not
furnished for the specific purpose of causing or accelerating death.
The Medicare hospice benefit has been revised and refined since its
implementation after various Acts of Congress and Medicare rules. For a
historical list of changes and regulatory actions, we refer readers to
the background section of previous Hospice Wage Index and Payment Rate
Update rules.\2\
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\2\ Hospice Regulations and Notices. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Hospice-Regulations-and-Notices.
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III. Provisions of the Final Rule
A. Final FY 2026 Hospice Wage Index and Rate Update
1. Final FY 2026 Hospice Wage Index
a. Background
The hospice wage index is used to adjust payment rates for hospices
under the Medicare program to reflect local differences in area wage
levels, based on the location where services are furnished. The hospice
wage index utilizes the wage adjustment factors used by the Secretary
for purposes of section 1886(d)(3)(E) of the Act for hospital wage
adjustments. Our regulations at Sec. 418.306(c) require each labor
market to be established using the most current hospital wage data
available, including any changes made by the Office of Management and
Budget (OMB) to Metropolitan Statistical Area (MSA) definitions.
In general, OMB issues major revisions to statistical areas every
10 years based on the results of the decennial census. On July 21,
2023, OMB issued Bulletin No. 23-01, which updated and superseded OMB
Bulletin No. 20-01, issued on March 6, 2020. OMB Bulletin No. 23-01
established revised delineations for the MSAs, Micropolitan Statistical
Areas, Combined Statistical Areas (CSAs), and Metropolitan Divisions,
collectively referred to as Core Based Statistical Areas (CBSAs).
According to OMB, the delineations reflect the 2020 Standards for
Delineating Core Based Statistical Areas (the ``2020 Standards''),
which appeared in the Federal Register (86 FR 37770 through 37778) on
July 16, 2021, and application of those standards to Census Bureau
population and journey-to-work data (for example, 2020 Decennial
Census, American Community Survey, and Census Population Estimates
Program data). A copy of OMB Bulletin No. 23-01 is available online at
https://www.bls.gov/bls/omb-bulletin-23-01-revised-delineations-of-metropolitan-statistical-areas.pdf.
The July 21, 2023 OMB Bulletin No. 23-01 contained a number of
significant changes. For example, it designated new CBSAs, split some
existing CBSAs, and changed some urban counties to rural and some rural
counties to urban. We believe it is important for the hospice wage
index to use the latest OMB delineations available in order to maintain
the most accurate and up-to-date payment system, reflecting the reality
of population shifts and labor market conditions. We further believe
that using the most current OMB delineations increases the integrity of
the hospice wage index by creating a more accurate representation of
geographic variation in wage levels. Therefore, in the FY 2025 Hospice
final rule (89 FR 64208 through 64224), we finalized the implementation
of new labor market areas based on the revisions in OMB Bulletin No.
23-01 beginning in FY 2025.
b. Hospice Floor and 5 Percent Cap Policies
As described in the August 8, 1997 Hospice Wage Index final rule
(62 FR 42860), the pre-floor and pre-reclassified hospital wage index
is used as the raw wage index for the hospice benefit. These raw wage
index values are subject to application of the hospice floor to compute
the hospice wage index used to determine payments to hospices. The pre-
floor, pre-reclassified hospital wage index values below 0.8000 are
adjusted by a 15 percent increase subject to a maximum wage index value
of 0.8000. For example, if CBSA ``A'' has a pre-floor, pre-reclassified
hospital wage index value of 0.3994, we would multiply 0.3994 by 1.15,
which equals 0.4593. Since 0.4593 is not greater than 0.8000, the CBSA
``A's'' hospice wage index would be 0.4593. In another example, if CBSA
``B'' has a pre-floor, pre-reclassified hospital wage index value of
0.7440, we would multiply 0.7440 by 1.15, which equals 0.8556. Because
0.8556 is greater than 0.8000, CBSA ``B's'' hospice wage index would be
0.8000.
In the FY 2023 Hospice Wage Index and Rate Update final rule (87 FR
45673), we finalized for FY 2023 and subsequent years the application
of a permanent 5 percent cap on any decrease to a geographic area's
wage index from its wage index in the prior year, regardless of the
circumstances causing the decline, so that a geographic area's wage
index would not be less than 95 percent of its wage index calculated in
the prior FY. When calculating the 5 percent cap on wage index
decreases, we start with the current FY's pre-floor, pre-
reclassification hospital wage index value for a CBSA or statewide
rural area, and if that wage index value is below 0.8000, we apply the
hospice floor as discussed previously in this section of the proposed
rule. Next, we compare the current FY's wage index value after the
application of the hospice floor to the
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final wage index value from the previous FY. If the current FY's wage
index value is less than 95 percent of the previous year's wage index
value, the 5 percent cap on wage index decreases would be applied and
the final wage index value would be set equal to 95 percent of the
previous FY's wage index value. If the 5 percent cap is applied in one
FY, then in the subsequent FY, that year's pre-floor, pre-
reclassification hospital wage index would be used as the starting wage
index value and adjusted by the hospice floor. The hospice floor
adjusted wage index value would be compared to the previous FY's wage
index which had the 5 percent cap applied. If the hospice floor
adjusted wage index value for that FY is less than 95 percent of the
capped wage index from the previous year, then the 5 percent cap would
be applied again, and the final wage index value would be 95 percent of
the capped wage index from the previous FY. Using the example
previously stated, if CBSA A has a pre-floor, pre-reclassified hospital
wage index value of 0.3994, we would multiply 0.3994 by 1.15, which
equals 0.4593. If CBSA ``A'' had a wage index value of 0.6200 in the
previous FY, then we would compare 0.4593 to the previous FY's wage
index value. Since 0.4593 is less than 95 percent of 0.6200, then CBSA
``A's'' hospice wage index would be 0.5890, which is equal to 95
percent of the previous FY's wage index value of 0.6200. In the next
FY, the updated wage index value would be compared to the wage index
value of 0.5890.
Previously, this 5 percent cap methodology was applied to all the
counties that make up a CBSA or rural area. However, beginning in FY
2025, we finalized a policy that the 5 percent cap methodology also be
applied to individual counties. In the FY 2025 Hospice Wage Index and
Rate Update final rule (89 FR 64202), as a transition to the adoption
of the revised delineations from OMB No. 23-01, we finalized a policy
applying the permanent 5 percent cap on wage index decreases at the
county level. Specifically, counties that were impacted by the revised
designations beginning in FY 2025 would receive a 5 percent cap on any
decrease in a geographic area's wage index value from the wage index
value from the prior FY. Also, beginning in FY 2025, counties that have
a different wage index value than the CBSA or rural area into which
they are designated due to the application of the 5 percent cap
(including redesignated counties that will receive the 5 percent cap
and redesignated counties that move into a CBSA or rural area where all
other constituent counties receive the 5 percent cap) would use a wage
index transition code. These special codes are five digits in length
and begin with ``50''. The 50XXX wage index transition codes are used
only in specific counties. Counties located in CBSAs and rural areas
that do not correspond to a different transition wage index value will
still use the CBSA number.
Finally, we finalized a policy to apply the 5 percent cap to a
county that corresponds to a different wage index value than the wage
index value assigned to the CBSA or rural area in which they are
designated due to a delineation change until the county's new wage
index is more than 95 percent of the wage index from the previous FY.
In order to capture the correct wage index value, the county will
continue to use the assigned 50XXX transition code until the county's
wage index value calculated for that FY using the new OMB delineations
is not less than 95 percent of the county's capped wage index from the
previous FY.
While we did not propose any changes to the hospice floor or 5
percent cap policies for FY 2026, we did receive a few comments on
these finalized policies. A summary of the comments and our responses
to those comments are as follows:
Comment: Several commenters expressed support for the continued
application of the 5 percent cap on wage index decreases. A commenter
stated that the 5 percent cap policy provides an important protection
for hospices in areas experiencing wage index volatility due to the
adoption of revised OMB statistical area delineations. This commenter
also expressed support for the application of the cap at the county
level, stating that the county-level application of the 5 percent cap
represents a thoughtful approach to mitigating the financial impact of
geographic reclassifications while maintaining the integrity of the
wage index system.
Response: We thank the commenters for their support.
Comment: Other commenters recommended changes to the 5 percent cap
policy. While MedPAC recommended that CMS also apply a cap to the wage
index increase that a provider can experience in a given year, other
commenters expressed concern that the 5 percent cap on wage index
decreases may not be sufficient and recommended lowering the cap
threshold. A commenter stated that even a 5 percent cut year-over-year
can significantly strain hospice operations, especially amid rising
costs. In addition, a commenter stated that a 5 percent cap on wage
index decreases may stabilize some regions but still leaves many
providers undercompensated, compromising access and quality. A few
commenters expressed concern with the financial impact of wage index
decreases in high cost of living areas, specifically in New York state
and Northern California. A commenter stated that decreases to 6 of the
15 New York CBSAs for FY 2026 (with one reaching the 5 percent cap and
three other CBSAs proposed to see decreases of 4.03 percent, 3.37
percent, and 2.86 percent), will make serving Medicare hospice
beneficiaries in these areas of New York more challenging. Another
commenter stated that the wage index for Sacramento has decreased since
FY 2022 (from 1.7072 in FY 2022 to 1.631 in FY 2025, with CMS now
proposing a further decrease to 1.5690 for FY 2026) and as a result,
the projected payment for Hospice payments in FY 2026 will be less than
the payment received in 2022 despite a cumulative nationwide inflation
of 15.98 percent over the same period. The commenter expressed concern
that hospice programs in Northern California cannot sustain 4 years
with no increase in payment given the ongoing inflationary trends. This
commenter stated they believe that in order to ensure stability, CMS
should cap wage index decreases to the level of the market basket
update.
Additionally, a commenter recommended that CMS consider lowering
the cap to 2.5 or 3 percent to protect hospice providers who are
operating with negative operating margins and are still experiencing
multiple negative consequences due to the COVID-19 pandemic, such as
increased costs and loss of staff. Another commenter recommended that
CMS cap wage index reductions to the level of the market basket update
or only permit upward adjustments in CBSA wage index values in order to
ensure stability in hospice payments. Finally, a commenter recommended
that CMS apply a zero percent floor to wage index adjustments in CBSAs
with demonstrably increasing labor costs.
Response: We appreciate the commenters' recommendations; however,
these comments are outside the scope of the proposed rule as we did not
propose any changes to the wage index cap. Regarding MedPAC's
suggestion that the wage index cap policy should also be applied to
wage index increases, the purpose of the 5 percent cap policy is to
help mitigate the significant negative impacts of wage index decreases.
Therefore, we do not
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believe it would be appropriate to also cap wage index increases.
Furthermore, with respect to commenters' recommendations about
lowering the cap on decreases, we continue to believe that the 5
percent cap on wage index decreases is sufficient to effectively
mitigate any significant decreases in a hospice's wage index for a
fiscal year, while still balancing the importance of ensuring that area
wage index values accurately reflect relative differences in area wage
levels. We continue to believe that a 5 percent cap on wage index
decreases is sufficient because it provides a degree of predictability
in payment changes for providers and allows providers time to adjust to
any significant decreases they may face year to year. Also, while we
appreciate the concerns raised by commenters on the financial impact of
wage index decreases on high cost of living areas we believe that 5
percent is a reasonable level for the cap because it effectively
mitigates any significant decreases in a hospice's wage index for
future FYs, while still balancing the importance of ensuring that area
wage index values accurately reflect relative differences in area wage
levels. Therefore, we do not believe that it would be appropriate to
lower the cap percentage, to apply a zero percent floor to wage index
adjustments or to only permit upward wage index adjustments.
Comment: A few commenters expressed concern with the hospice floor
policy. A commenter recommended that CMS reevaluate the hospice floor
policy to ensure adequate reimbursement in persistently underserved
rural regions, especially with declining wage index adjustments.
Another commenter stated that even with the hospice-specific floor
(capped at 0.8000), providers in rural areas receive substantially
lower reimbursement for delivering the same services, limiting their
ability to retain staff, cover operating expenses, and invest in care
quality. Additionally, a commenter stated that without a wage index
floor or multi-year transition strategy, many hospices, regardless of
location, face abrupt and destabilizing reimbursement cuts.
Response: We appreciate these recommendations. However, these
comments are out of scope as we did not propose any changes to the
hospice floor policy. Regardless, we believe that the hospice floor,
which adjusts the pre-floor, pre-reclassified hospital wage index
values below 0.8000 by a 15 percent increase subject to a maximum wage
index value of 0.8000, and the 5 percent cap on wage index decreases is
sufficient to mitigate any potential negative impact for hospices
serving beneficiaries in these rural areas.
Final Decision: We did not propose any changes to finalized hospice
floor and 5 percent cap policies. Therefore, the FY 2026 hospice wage
index will continue to include the hospice floor as well as the 5
percent cap on wage index decreases. For FY 2026, the 5 percent cap on
wage index decreases will continue to be calculated at the county level
. While some counties that required a transition code for FY 2025 will
continue to use the same transition code for FY 2026, other counties
that required a transition code in FY 2025 will no longer require a
transition code in FY 2026. For these counties, the FY 2026 wage index
of the CBSA or rural area that they are designated into has a wage
index higher than 95 percent of their previous FY's wage index.
Therefore, these counties will use the CBSA or rural county code of the
area they were redesignated into based on OMB Bulletin No. 23-01.
More information regarding these special codes can be found in the
FY 2025 Hospice Wage Index and Rate Update final rule (89 FR 64220
through 64224). Additionally, the list of counties that must use a
50XXX transition code for a given FY can be found as a separate tab in
the hospice wage index file for that FY available on the CMS website at
https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-wage-index.
c. Final FY 2026 Hospice Wage Index
In the FY 2020 Hospice Wage Index and Rate Update final rule (84 FR
38484) we finalized a policy to use the current FY's hospital wage
index data to calculate the hospice wage index values. For FY 2026, we
proposed that the hospice wage index would be based on the FY 2026
hospital pre-floor, pre-reclassified wage index for hospital cost
reporting periods beginning on or after October 1, 2021 and before
October 1, 2022 (FY 2022 cost report data). We noted that the FY 2026
hospice wage index would not consider any geographic reclassification
of hospitals, including those in accordance with sections 1886(d)(8)(B)
or 1886(d)(10) of the Act. The regulations that govern hospice payment
do not provide a mechanism for allowing hospices to seek geographic
reclassification or to utilize the rural floor provisions that exist
for Inpatient Prospective Payment System (IPPS) hospitals. The
reclassification provision found in section 1886(d)(10) of the Act is
specific to hospitals. Section 4410(a) of the Balanced Budget Act of
1997 (Pub. L. 105-33) provides that the area wage index applicable to
any hospital located in an urban area of a State may not be less than
the area wage index applicable to hospitals located in rural areas in
that State. This rural floor provision is also specific to hospitals.
Because the reclassification and the hospital rural floor policies
apply to hospitals only, and not to hospices, we continue to believe
the use of the pre-floor and pre-reclassified hospital wage index is
the most appropriate adjustment to the labor portion of the hospice
payment rates. This position is longstanding and consistent with other
Medicare payment systems, for example, the skilled nursing facility
prospective payment system (SNF PPS), the inpatient rehabilitation
facility prospective payment system (IRF PPS), and the home health
prospective payment system (HH PPS). However, the hospice wage index
does include the hospice floor, which is applicable to all CBSAs, both
rural and urban. The hospice floor adjusts pre-floor, pre-reclassified
hospital wage index values below 0.8000 by a 15 percent increase
subject to a maximum wage index value of 0.8000.
The appropriate FY 2026 wage index value will be applied to the
labor portion of the hospice payment rate based on the geographic area
in which the beneficiary resides when receiving RHC or CHC. The
appropriate FY 2026 wage index value will be applied to the labor
portion of the payment rate based on the geographic location of the
facility for beneficiaries receiving GIP or IRC.
There exist some geographic areas where there are no hospitals, and
thus, no hospital wage data on which to base the calculation of the
hospice wage index. In the FY 2006 Hospice Wage Index and Rate Update
final rule (70 FR 45135), we adopted the policy that, for urban labor
markets without a hospital from which hospital wage index data could be
derived, all the CBSAs within the State would be used to calculate a
statewide urban average pre-floor, pre-reclassified hospital wage index
value to use as a reasonable proxy for these areas. For FY 2026, the
only CBSA without a hospital from which hospital wage data can be
derived is 25980, Hinesville, Georgia. As such, the proposed FY 2026
hospice wage index for Hinesville, Georgia was 0.8892. Based on updated
wage index data, the final FY 2026 hospice wage index value for
Hinesville, Georgia is 0.8894.
In the FY 2008 Hospice Wage Index and Rate Update final rule (72 FR
50217 through 50218), we implemented a methodology to update the
hospice wage index for rural areas without hospital wage data. In cases
where there
[[Page 37409]]
is a rural area without rural hospital wage data, we use the average
pre-floor, pre-reclassified hospital wage index data from all
contiguous CBSAs, to represent a reasonable proxy for the rural area.
The term ``contiguous'' means sharing a border (72 FR 50217). In the FY
2025 Hospice Wage Index and Rate Update final rule (89 FR 64207), as
part of our adoption of the revised OMB delineations, rural North
Dakota became a rural area without a hospital from which hospital wage
data can be derived. Therefore, to calculate the proposed FY 2026 wage
index for rural area 99935, North Dakota, we used as a proxy the
average pre-floor, pre-reclassified hospital wage data (updated by the
hospice floor and 5 percent cap) from the contiguous CBSAs: CBSA 13900-
Bismark, ND, CBSA 22020-Fargo, ND-MN, CBSA 24220-Grand Forks, ND-MN and
CBSA 33500, Minot, ND, which resulted in a proposed FY 2026 hospice
wage index of 0.8486 for rural North Dakota. Based on updated wage
index data, the final FY 2026 hospice wage index value for rural North
Dakota is 0.8469.
Previously, the only rural area without a hospital from which
hospital wage data could be derived was in Puerto Rico. However, for
rural Puerto Rico, we did not apply this methodology due to the
distinct economic circumstances that exist there (for example, due to
the close proximity of almost all of Puerto Rico's various urban areas
to non-urban areas, this methodology would produce a wage index for
rural Puerto Rico that is higher than that of half of its urban areas).
Instead, we used the most recent wage index previously available for
that area, which was 0.4047, subsequently adjusted by the hospice floor
for an adjusted wage index of 0.4654. For FY 2025, we noted as part of
our adoption of the revised OMB delineations, there is now a hospital
in rural Puerto Rico from which hospital wage data can be derived.
Therefore, we finalized a wage index for rural Puerto Rico based on the
hospital wage data for the area instead of the previously available
pre-hospice floor wage index of 0.4047, which equaled an adjusted wage
index value of 0.4654. The proposed FY 2026 pre-hospice floor
unadjusted wage index for rural Puerto Rico was 0.2452 subsequently
adjusted by the hospice floor to equal 0.2820. Because 0.2820 is more
than a 5 percent decline in the FY 2025 wage index, the adjusted FY
2026 wage index with the 5 percent cap applied would equal 0.95
multiplied by 0.4421 (that is, the FY 2025 wage index with 5 percent
cap), which resulted in a proposed FY 2026 wage index value of 0.4200.
Based on updated wage index data, the final FY 2026 pre-hospice floor
unadjusted wage index for rural Puerto Rico is 0.2443 subsequently
adjusted by the hospice floor to equal 0.2809. Because 0.2809 is more
than a 5 percent decline in the FY 2025 wage index, the adjusted FY
2026 wage index with the 5 percent cap applied would equal 0.95
multiplied by 0.4421 (that is, the FY 2025 wage index with 5 percent
cap), which results in a final FY 2026 wage index value of 0.4200.
The final hospice wage index applicable for FY 2026 (October 1,
2025 through September 30, 2026) is available on the CMS website for
the Hospice Wage Index page located at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-wage-index as well as
the FY 2026 Hospice Wage Index final rule web page at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-regulations-and-notices.
We received 24 public comments on the proposed FY 2026 hospice wage
index. A summary of the comments and our responses to those comments
are as follows:
Comment: Several commenters including MedPAC recommended more far-
reaching revisions and reforms to the wage index methodology used under
Medicare fee-for-service than the proposed wage index policies outlined
in the FY 2026 Hospice Wage Index and Rate Update proposed rule. MedPAC
recommended that the Secretary use existing authority to adopt the
Commission's June 2023 wage index plan that calls for Congress to
repeal the existing Medicare wage index statutes, including current
exceptions, and require the Secretary to phase in a new Medicare wage
index system for hospitals and other types of providers that: uses all-
employer, occupation-level wage data with different occupation weights
for the wage index of each provider type; reflects local area level
differences in wages between and within metropolitan statistical areas
and statewide rural areas; and smooths wage index differences across
adjacent local areas.
Other commenters urged CMS to engage with interested parties in
exploring alternatives to the current reliance on hospital-based wage
data to set hospice payments. A few commenters stated that the hospice
wage index, based on inpatient hospital data, fails to adequately
account for unique and considerable hospice-specific circumstances and
costs such as the costs associated with travel to patients' homes.
Another commenter requested changes to the hospice wage index
methodology and stated that the pre-floor, pre-reclassified hospital
wage index is wholly inadequate for adjusting hospice and home health
costs in states like New York, which has some of the nation's highest
labor costs, and which continue to increase. Finally, a commenter
requested CMS publish a state- and county-level wage index impact
analysis and consider an alternative hospice-specific wage index
methodology in future rulemaking.
Response: We thank the commenters for their recommendations. While
we did not propose any changes to the wage index methodology in the
proposed rule, we may consider these recommendations in future
rulemaking.
Comment: A few commenters expressed concern that hospice providers
are unable to benefit from IPPS hospital wage index policies such as
out-migration, reclassification, and the rural floor. Specifically,
some commenters expressed concern that hospices in Kootenai County, ID
do not benefit from the hospital outmigration policy and stated that
CMS has already acknowledged the labor market overlap through this
county's eligibility for a hospital wage index out-migration
adjustment. They stated that it is inconsistent and financially unsound
to recognize this disparity for hospitals but not for hospice providers
operating in the same environment and serving the same communities.
Other commenters recommended that the hospice wage index
incorporate the hospital reclassification policy. A commenter
recommended that the reclassification provision be extended
specifically to provider-based home health and hospice agencies
affiliated with hospital or health systems. A commenter stated that the
inability to reclassify leaves hospices uniquely vulnerable in a
competitive labor market with a limited pipeline of available workers.
Finally, a commenter requested that CMS reinstitute its prior
policy that no hospice be paid below the rural floor for their State.
Response: We remind interested parties that the statutory
provisions that govern hospice payment do not provide a mechanism for
allowing hospices to seek geographic reclassification or to utilize the
rural floor or out-migration provisions that exist for IPPS hospitals.
The reclassification provision found in section 1886(d)(10) of the Act
is specific to hospitals. Section 4410(a) of the Balanced Budget Act of
1997 (Pub. L. 105-33) provides that the area wage index applicable to
any hospital that is
[[Page 37410]]
in an urban area of a State may not be less than the area wage index
applicable to hospitals located in rural areas in that State. Section
1886(d)(13) of the Act outlines the adjustment that is applied to
hospitals that experience a significant shift in their patient
population due to patients seeking care outside their geographic area
(out-migration). Because the reclassification provision, the hospital
rural floor, and the out-migration provision apply only to hospitals,
and not to hospices (even those hospices that are affiliated with a
hospital or other health care system), we continue to believe the use
of the pre- floor and pre-reclassified hospital wage index results is
the most appropriate adjustment to the labor portion of the hospice
payment rates. However, we note that hospices do receive the hospice
floor which adjusts the pre- floor, pre-reclassified hospital wage
index values below 0.8000 by a 15 percent increase subject to a maximum
wage index value of 0.8000 and the 5 percent cap on wage index
decreases and these policies apply to both urban and rural areas.
Comment: A few commenters expressed concern with the CBSA
designations and wage index values assigned to their specific
geographic areas. Several commenters representing hospices in Coeur
d'Alene, ID stated that the economy and cost-of-living of Coeur
d'Alene, ID and Kootenai County, ID is not reflective of the rest of
the Idaho region but rather is more reflective of the ``Pacific''
region that includes the Spokane, WA CBSA. A commenter stated that
despite being part of a shared economic and labor market with
neighboring counties in Washington and Montana, the Coeur d'Alene, ID
reimbursement rate is falling behind at a time when costs are rising
across the board. These commenters recommended that CMS align Coeur
d'Alene, ID and Kootenai County's hospice reimbursement rate with that
of the Spokane, WA metropolitan area.
Response: We thank the commenters for these recommendations.
However, we have used CBSAs for determining hospice payments since FY
2006 and continue to believe that the OMB's geographic area
delineations represent a useful proxy for differentiating between labor
markets and that the geographic area delineations are appropriate for
use in determining Medicare hospice payments. CBSAs provide a uniform
and consistent basis for determining statistical area delineations,
based on long-standing statistical standards maintained by OMB.
Further, OMB conducts periodic review of the standards to ensure their
continued usefulness and relevance. Additionally, other provider types,
such as IPPS hospitals, home health agencies (HHAs), skilled nursing
facilities (SNFs), and inpatient rehabilitation facilities (IRFs), all
use CBSAs to define their labor market areas. Therefore, we believe it
is important to apply this method consistently among providers. Using
the most current OMB delineations provides an accurate representation
of geographic variation in wage levels. For example, we do not believe
it would be appropriate to allow Kootenai County, ID to be reassigned
into a higher CBSA designation. However, if OMB redesignates Kootenai
County, ID into the Spokane, WA, we would propose this change in future
rulemaking consistent with our longstanding approach of adopting OMB
statistical area delineations outlined in the most recent OMB
bulletins.
Final Decision: After consideration of public comments, we are
finalizing our proposal to use the FY 2026 pre-floor, pre-reclassified
hospital wage index data as the basis for the FY 2026 hospice wage
index. Additionally, using our established methodology for rural areas
with no hospitals, we are including in the FY 2026 hospice wage index
the wage indexes for the Northern Mariana Islands and American Samoa.
Consistent with our established methodology, we compute an appropriate
wage index for rural areas with no hospital using the average wage
index values from contiguous CBSAs to represent a reasonable proxy. We
believe that CBSA 99965 (Guam) represents a reasonable proxy because
the islands are located within the Pacific Rim and share a common
status of US territories. While Guam does not share a land border with
either the Northern Mariana Islands or American Samoa, we believe that
Guam's wage index is a reasonable proxy for the wage indexes of
American Samoa and the Northern Mariana Islands under our contiguous
CBSA policy given that those two territories cannot share a land border
with others CBSAs Therefore, hospices that provide services in the
Northern Mariana Islands and American Samoa should use CBSA 99965
(Guam) and should receive the wage index assigned to CBSA 99965 (Guam)
of 0.9611. Although we did not propose this in the proposed rule, we
believe notice and comment rulemaking is not needed to add the wage
indexes of the Northern Mariana Islands and American Samoa because
their inclusion aligns with our current methodology, current law for
establishing the wage index, and current practice. As stated
previously, choosing Guam's wage index as the reasonable proxy for the
wage indexes of the Northern Mariana Islands and American Samoa is the
best application of CMS's contiguous CBSA policy to the anomalous
situation of U.S. territories separated by the ocean, and applying the
contiguous policy as described ensures that the Northern Mariana
Islands and American Samoa have wage indexes per 42 CFR 418.306(c). The
addition of the Northern Mariana Islands and American Samoa to the wage
index would also have no effect on hospice payment because hospices in
the two territories currently receive payment based on calculations
using Guam's wage index. Moreover, there is good cause to waive
rulemaking for the addition of the Northern Mariana Islands and
American Samoa to the wage index. We explain why there is good cause
for a waiver in section IV. of this final rule, Waiver of Proposed
Rulemaking.
The wage index applicable for FY 2026 is available on our website
at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-wage-index. The hospice wage index for FY 2026 is
effective October 1, 2025, through September 30, 2026.
2. Final FY 2026 Hospice Payment Update Percentage
Section 4441(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L.
105-33) amended section 1814(i)(1)(C)(ii)(VI) of the Act to establish
updates to hospice rates for FYs 1998 through 2002. Hospice rates were
to be updated by a factor equal to the inpatient hospital market basket
percentage increase set out under section 1886(b)(3)(B)(iii) of the
Act, minus one percentage point. Payment rates for FYs since 2002 have
been updated as required by section 1814(i)(1)(C)(ii)(VII) of the Act,
which states that the update to the payment rates for subsequent FYs
must be the inpatient hospital market basket percentage increase for
that FY. In the FY 2022 IPPS/LTCH PPS final rule (86 FR 45194 through
45204), we finalized the rebased and revised IPPS market basket to
reflect a 2018 base year. For FY 2026, we proposed to rebase and revise
the IPPS market basket to reflect a 2023 base year. For more
information on this proposal, we refer readers to the FY 2026 IPPS/LTCH
PPS proposed rule (90 FR 18237 through 18247).
Section 3401(g) of the Affordable Care Act mandated that, starting
with FY 2013 (and in subsequent FYs), the hospice payment update
percentage be
[[Page 37411]]
annually reduced by changes in economy-wide productivity as specified
in section 1886(b)(3)(B)(xi)(II) of the Act. The statute defines the
productivity adjustment to be equal to the 10-year moving average of
changes in annual economy-wide private nonfarm business multifactor
productivity (MFP) as projected by the Secretary for the 10-year period
ending with the applicable FY, year, cost reporting period, or other
annual period (the ``productivity adjustment''). The United States
Department of Labor's Bureau of Labor Statistics (BLS) publishes the
official measures of productivity for the United States economy. We
note that, previously, the productivity measure referenced in section
1886(b)(3)(B)(xi)(II) of the Act was published by BLS as private
nonfarm business multifactor productivity. Beginning with the November
18, 2021 release of productivity data, BLS replaced the term
``multifactor productivity'' with ``total factor productivity'' (TFP).
BLS noted that this is a change in terminology only and would not
affect the data or methodology. As a result of the BLS name change, the
productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of the
Act is now published by BLS as ``private nonfarm business total factor
productivity.'' However, as mentioned, the data and methods are
unchanged. We refer readers to http://www.bls.gov for the BLS
historical published TFP data. A complete description of IHS Global
Inc.'s (IGIs) TFP projection methodology is available on the CMS
website at https://www.cms.gov/data-research/statistics-trends-and-reports/medicare-program-rates-statistics/market-basket-research-and-information. In addition, in the FY 2022 IPPS final rule (86 FR 45214),
we noted that beginning with FY 2022, CMS changed the name of this
adjustment to refer to it as the ``productivity adjustment'' rather
than the ``MFP adjustment''.
Consistent with our historical practice, we estimate the market
basket percentage increase, and the productivity adjustment based on
IGI's forecast, using the most recent available data. The proposed
hospice payment update percentage for FY 2026 was based on the most
recent estimate of the inpatient hospital market basket (based on IGI's
fourth quarter 2024 forecast). Due to the requirements at sections
1886(b)(3)(B)(xi)(II) and 1814(i)(1)(C)(v) of the Act, the proposed
inpatient hospital market basket percentage increase for FY 2026 of 3.2
percent was required to be reduced by a productivity adjustment as
mandated by section 3401(g) of the Affordable Care Act. The proposed
productivity adjustment for FY 2026 was 0.8 percentage point (based on
IGI's fourth quarter 2024 forecast). Therefore, the proposed hospice
payment update percentage for FY 2026 was 2.4 percent. We also proposed
that if more recent data became available after the publication of the
proposed rule and before the publication of the final rule (for
example, a more recent estimate of the inpatient hospital market basket
percentage increase or productivity adjustment), we would use such
data, if appropriate, to determine the hospice payment update
percentage in the FY 2026 final rule. We continue to believe it is
appropriate to routinely update the hospice payment system so that it
reflects the best available data regarding differences in patient
resource use and costs among hospices as required by the statute.
In the FY 2022 Hospice Wage Index and Rate Update final rule (86 FR
42532), we rebased and revised the labor shares for RHC, CHC, GIP, and
IRC using Medicare cost report data for freestanding hospices (CMS Form
1984-14, OMB Control Number 0938-0758) from 2018. The current labor
portion of the payment rates are: RHC, 66.0 percent; CHC, 75.2 percent;
GIP, 63.5 percent; and IRC, 61.0 percent. The non-labor portion is
equal to 100 percent minus the labor portion for each level of care.
The non-labor portion of the payment rates are as follows: RHC, 34.0
percent; CHC, 24.8 percent; GIP, 36.5 percent; and IRC, 39.0 percent.
We received 37 public comments on our proposal for the FY 2026
hospice payment update percentage. A summary of the comments and our
responses to those comments are as follows:
Comment: Several commenters expressed their appreciation for the
proposed inpatient hospital market basket update for FY 2026; however,
most commenters expressed their belief that the proposed 2.4 percent
increase would not cover their increased operating costs. Specifically,
these commenters stated that they have been facing unprecedented
increases in labor costs which have far outpaced the market basket
updates that hospices have received in recent years. They stated they
continue to grapple with a healthcare workforce shortage causing
intense competition for skilled staff (including but not limited to
nurses, social workers, aides, among other professionals), driving
wages upward. Several commenters noted that BLS data indicates that
healthcare sector inflation continues to be higher than historical
norms and wages, salaries, and employer costs for health care are
increasing at higher rates. Several commenters noted that MedPAC
reports nonprofit hospices have margins in the single digits which they
stated makes it even more difficult for them in the midst of rising
costs for medications, supplies, employee wages, and benefits.
The commenters also stated that the proposed payment update has not
appropriately captured the inflation pressures experienced for non-
labor operating expenses, specifically the increased costs for medical
supplies, personal protective equipment, durable medical equipment,
pharmaceuticals, rent and utilities. A commenter also noted that
tariffs will only further increase the cost of doing business for
hospice providers. A commenter stated that hospices incur substantial
travel-related costs in their state. A commenter stated they believe
the proposed payment update does not reflect the increased costs of the
new EMR and information-technology management contracts to comply with
the revised HIPAA Security Rule; the increased training and education
requirements to meet new CMS hospice regulatory demands; and the
additional administrative personnel required to manage medical reviews
and investigations secondary to new CMS regulations, and payment issues
from Managed Care and Medicare Advantage plans.
Several commenters recommended CMS increase the proposed FY 2026
hospice payment increase by a different update than the proposed IPPS
market basket update. A commenter requested CMS to recognize the cost-
saving value of hospice services to the Medicare program and implement
a one-time catch-up adjustment to hospice payments to reflect the true
cost of care. A commenter requested CMS examine trends relative to IHS
Global Inc.'s forecasts to determine whether more recently available
data could be used for the final FY 2026 rule, resulting in a higher
market basket update. They also requested CMS determine whether
additional updates could be made during the course of FY 2026 to
provide additional support to hospice and other providers, such as
through a one-time adjustment. A commenter requested that CMS continue
to monitor profit margins, wage index variations, and the myriad of
factors that impact nonprofit hospices as CMS moves forward with
changes to the current methodology. Several commenters requested CMS
pursue all possible administrative options available to support
hospices and provide a higher payment update
[[Page 37412]]
for FY 2026. To the extent that CMS' hands are tied by statutory
formulas for updating hospice payments, they requested CMS work with
Congress to address this need. A commenter stated that the hospice
payment updates rely on cost reports that are 2 to 3 years old, failing
to reflect real-time operational cost increases which they say is
particularly damaging in periods of economic volatility. They requested
that CMS consider implementing a prospective payment model based on
current-year data, perhaps utilizing real-time provider-reported
financial data or a claims-based adjustment mechanism. A commenter
requested CMS index the base payment update to actual medical inflation
or provide a targeted supplemental increase for providers serving a
high proportion of dual-eligible beneficiaries.
Response: We acknowledge concerns about recent inflation trends and
requests for a higher FY 2026 hospice payment update or an alternative
payment recommendation that differs from the statutorily required
productivity-adjusted IPPS market basket update.
However, section 1814(i)(1)(C)(ii)(VII) of the Act requires CMS to
update hospice payments by the IPPS market basket percentage increase
(as defined in section 1886(b)(3)(B)(iii) of the Act) adjusted for
productivity. We note that in the FY 2026 IPPS/LTCH proposed rule (90
FR 18237 through 18247), we proposed to rebase and revise the IPPS
market basket to reflect a 2023 base year. Section 1886(b)(3)(B)(iii)
of the Act states the Secretary shall update IPPS payments based on a
market basket percentage increase estimated by the Secretary before the
beginning of the period or fiscal year, by which the cost of the mix of
goods and services (including personnel costs but excluding
nonoperating costs) comprising routine, ancillary, and special care
unit inpatient hospital services, based on an index of appropriately
weighted indicators of changes in wages and prices which are
representative of the mix of goods and services included in such
inpatient hospital services. The IPPS market basket is a fixed-weight,
Laspeyres-type index that measures price changes over time and would
not reflect increases in costs associated with changes in the volume or
intensity of input goods and services. As such, the IPPS market basket
update would reflect the prospective price pressures described by the
commenters during a high inflation period (such as faster wage growth
or higher energy prices) but might not reflect other factors that could
increase costs such as the quantity of labor used or any shifts between
contract and staff nurses. We note that cost changes (that is, the
product of price and quantities) would only be reflected when a market
basket is rebased, and the base year weights are updated to a more
recent time period.
We understand that the market basket updates may differ from other
overall inflation indexes such as the CPI for Medical Care; however, we
would reiterate that these topline indexes are not comparable since
they measure different mixes of products, services, or wages than the
legislatively defined CMS IPPS hospital market basket. We would
highlight that the market basket percentage increase is a forecast of
the price pressures that hospitals are expected to face in FY 2026. We
also note that when developing its forecast for the various price
indexes used in the IPPS market basket, IGI considers industry-specific
and overall economic conditions. More specifically for the ECI for
hospital workers (which is used to measure compensation prices), IGI
considers overall labor market conditions (including the impact of wage
pressures on skill mix) as well as trends in contract labor wages,
which both have an impact on wage pressures for workers employed
directly by the hospital.
As stated in the FY 2026 IPPS/LTCH proposed rule (90 FR 18266) we
proposed a FY 2026 applicable percentage increase of 2.4 percent,
reflecting the proposed 2023-based IPPS market basket rate-of-increase
of 3.2 percent and proposed productivity adjustment of 0.8 percentage
point. We also proposed that if more recent data became available, we
would use such data, if appropriate, to derive the final FY 2026 IPPS
market basket update for the final rule. We appreciate the commenters'
concerns regarding inflationary pressure and the request to use more
recent data to determine the FY 2026 IPPS market basket update. For
this final rule, we are using an updated forecast of the price proxies
underlying the market basket that incorporates more recent historical
data and reflects a revised outlook regarding the U.S. economy. As
published in the FY 2026 IPPS/LTCH final rule, based on more recent
data available for this FY 2026 Hospice Wage Index and Rate Update
final rule (that is, IGI's second quarter 2025 forecast of the 2023-
based IPPS market basket rate-of-increase with historical data through
the first quarter of 2025), we estimate that the FY 2026 IPPS market
basket increase is 3.3 percent. Based on more recent data available as
published in the FY 2026 IPPS/LTCH PPS final rule (that is, IGI's
second quarter 2025 forecast of the productivity adjustment), the
current estimate of the productivity adjustment for FY 2026 is 0.7
percentage point. Therefore, the final hospice payment update
percentage for FY 2026 is 2.6 percent (0.2 percentage point higher than
the proposed hospice payment update percentage). We note that while
there are multiple offsetting factors contributing to differences in
the forecasts underlying the proposed and final rules, the final FY
2026 IPPS market basket increase is slightly higher due to economic
uncertainty.
Comment: Many commenters requested CMS make a one-time market
basket adjustment of 4.9 percent to account for the cumulative
shortfall in hospice payment rates due to forecast errors over FYs 2021
through 2025. Commenters also stated that because annual payment
updates compound, the impact of forecast errors is cumulative. They
further stated that Medicare hospice expenditures totaled about $27.5
billion in FY 2024 and so a 4.9 percent shortfall equates to roughly
$1.3 billion in annual underpayments relative to what payments would
have been with accurate market basket updates. Commenters also noted
that skilled nursing facilities have received forecast error
adjustments, including a 0.6 percentage point correction in FY 2024 and
a 1.7 percentage points correction in FY 2025.
Commenters urged CMS to consider any and all opportunities to
implement a one-time catch-up adjustment for hospice payments, as has
been done in the past for other provider types in extraordinary
circumstances to rectify cost disparities. Several commenters stated
that if CMS is limited by statutory requirements to implement an
adjustment for updating hospice payments that CMS work with Congress to
include funding for a one-time market basket forecast error adjustment
for hospice providers as a component of any end of year legislation
taken up by the 119th Congress.
Response: We thank the commenters for their recommendations. The
inpatient hospital market basket percentage increases are required by
law to be set prospectively, which means that the update relies on a
mix of both historical data for part of the period for which the update
is calculated and forecasted data for the remainder. There is currently
no mechanism to adjust for market basket forecast error in the hospice
payment update. Furthermore, beginning in 1989, Congress gave hospices
their first increase (20 percent) in reimbursement since 1986 and tied
[[Page 37413]]
future increases to the annual increase in the hospital market basket
through a provision contained in the Omnibus Budget Reconciliation Act
of 1989. While the projected IPPS hospital market basket updates for FY
2021 through FY 2024 (the last historical fiscal year) were under
forecast, this was largely due to unanticipated inflationary and labor
market pressures as the economy emerged from the COVID-19 PHE. The
forecast error has been both positive and negative during past years,
and over longer periods of time the cumulative forecast has not
deviated significantly from the historical measures. Only considering a
forecast error for years when the final inpatient hospital market
basket percentage increase was lower than the actual inpatient hospital
market basket percentage increase does not consider the numerous years
that providers benefited from a forecast error. We understand that the
market basket updates may differ from other overall inflation indexes
such as the topline ECI, CPI, or PPI; however, we would reiterate that
comparisons between these topline indexes are not comparable since they
measure different mixes of products, services, or wages than reflected
in the legislatively defined CMS IPPS hospital market basket.
Comment: Commenters recognized that CMS is statutorily required to
apply the productivity adjustment based on the 10-year moving average
of changes in annual economy-wide private nonfarm business total factor
productivity; however, they expressed concerns about the magnitude and
methodology of the adjustment. Commenters stated that the productivity
adjustment largely reflects output growth driven by technology, capital
investment, and process efficiencies--factors more applicable to
industrial or tech-driven sectors. They remained concerned that this
adjustment does not fairly reflect the nature of hospice care, which is
fundamentally labor-intensive and not amenable to typical productivity
gains. Other commenters expressed concern regarding the increase in the
productivity adjustment for FY 2026 relative to prior years, noting
that the average was 0.5 percent over the 2012 to 2025 time period as
well as noting the upward trend with 0.2 percent in FY 2024, 0.5
percent in FY 2025, and 0.8 percent in FY 2026. They stated this
volatility underscores the inconsistency of applying a uniform,
economy-wide productivity factor across all sectors and highlights the
financial strain it imposes on labor-intensive providers such as
hospice and home health, which lack the ability to realize capital-
based efficiencies.
A commenter stated CMS should elect to implement the most de
minimis productivity adjustment that may be applied under current law
as a component of the FY 2026 hospice rate update. Other commenters
requested CMS reevaluate the productivity adjustment methodology to
account for the unique structure of hospice care.
Response: Section 3401(g) of the Affordable Care Act mandated that,
starting with FY 2013 (and in subsequent FYs), the hospice payment
update percentage be annually reduced by changes in 10-year moving
average growth in economy-wide private nonfarm business multi-factor
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act.
We recognize the concerns of the commenters regarding the
appropriateness of the productivity adjustment; however, we are
required pursuant to section 1886(b)(3)(B)(xi)(II) of the Act to apply
the specific productivity adjustment described here.
We have always made available on the CMS website the general method
for calculating the productivity adjustment. This includes providing a
link to the most recent BLS historical total factor productivity (TFP)
(previously referred to as multifactor productivity) data (http://www.bls.gov), which allows interested parties to obtain historical TFP
annual index levels for 1987 through 2024. We also provided the IGI
projection model (https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/medicareprogramratesstats/downloads/tfp_methodology.pdf), which is used to derive annual TFP
growth rates for 2025 and 2026. The annual index level derived from
this method is then interpolated to quarterly levels, and the FY 2026
productivity adjustment is equal to the percent change in the 40-
quarter moving average projected level for the period ending September
30, 2026 relative to the 40-quarter moving average projected level for
the period ending September 30, 2025. We believe our methodology for
the productivity adjustment is consistent with section
1886(b)(3)(B)(xi)(II) of the Act which states that the productivity
adjustment is equal to the 10-year moving average of changes in annual
economy-wide private nonfarm business multi-factor productivity (as
projected by the Secretary for the 10-year period ending with the
applicable fiscal year, year, cost reporting period, or other annual
period).
At the time of this final rule, the FY 2026 productivity adjustment
reflects BLS historical TFP data through 2024 (released on March 21,
2025) and IGI's forecasted TFP growth for 2025 and 2026. The average
annual growth rate of historical TFP published by BLS for 2017 through
2024 is currently 0.9 percent and IGI is projecting average TFP growth
of about 0.0 percent for 2025 and 2026 based on IGI's second-quarter
2025 forecast. Combining the historical and projected TFP data over the
entire 10-year time period results in a compound annual growth rate of
TFP of 0.7 percent for 2026. The productivity adjustment (based on the
10-year period ending with FY 2026) for the FY 2026 IPPS/LTCH final
rule is 0.1 percentage point lower than in the FY 2026 IPPS/LTCH
proposed rule and primarily reflects the incorporation of a revised
outlook from IGI that has lower projected economic growth over 2025 and
2026. The 0.7-percent productivity adjustment in the FY 2026 final rule
is larger than the productivity adjustment in prior final rules for FY
2023 and FY 2024 mainly due to the incorporation of updated BLS
historical data.
Final Decision: We are finalizing the hospice payment update using
the methodology outlined. Based on the more recent IGI second quarter
2025 forecast with historical data through the first quarter of 2025
the 2023-based IPPS market basket increase factor for FY 2026 is 3.3
percent. The FY 2026 productivity adjustment based on the more recent
IGI second quarter 2025 forecast is 0.7 percentage point. Therefore,
CMS is finalizing for FY 2026, a hospice payment update percentage of
2.6 percent (3.3 percent market basket percentage increase less a 0.7
percentage point productivity adjustment).
3. Final FY 2026 Hospice Payment Rates
There are four payment categories that are distinguished by the
location and intensity of the hospice services provided. The base
payments are adjusted for geographic differences in wages by
multiplying the labor share, which varies by category, of each base
rate by the applicable hospice wage index. A hospice is paid the RHC
rate for each day the beneficiary is enrolled in hospice, unless the
hospice provides CHC, IRC, or GIP. CHC is provided during a period of
patient crisis to maintain the patient at home; IRC is short-term care
to allow the usual caregiver to rest and be relieved from caregiving;
and GIP care is intended to treat symptoms that cannot be managed in
another setting.
[[Page 37414]]
As discussed in the FY 2016 Hospice Wage Index and Rate Update
final rule (80 FR 47172), we implemented two different RHC payment
rates, one RHC rate for the first 60 days and a second RHC rate for
days 61 and beyond. In addition, in that final rule, we implemented a
Service Intensity Add-On (SIA) payment for RHC when direct patient care
is provided by a registered nurse (RN) or social worker during the last
7 days of the beneficiary's life. The SIA payment is equal to the CHC
hourly rate multiplied by the hours of nursing or social work provided
(up to 4 hours total) that occurred on the day of service if certain
criteria are met. To maintain budget neutrality, as required under
section 1814(i)(6)(D)(ii) of the Act, the new RHC rates were adjusted
by an SIA budget neutrality factor (SBNF). The SBNF is used to reduce
the overall RHC rate in order to ensure that SIA payments are budget
neutral. At the beginning of every FY, SIA utilization is compared to
the prior year in order calculate a budget neutrality adjustment. For
FY 2026, the proposed SIA budget neutrality factor was 1.0005 for RHC
days 1-60 and 1.0001 for RHC days 61+. With updated FY 2024 claims data
(as of May 9, 2025), the final SIA budget neutrality factor is 1.0005
for days 1-60 and 1.0001 for RHC days 61+.
In the FY 2017 Hospice Wage Index and Rate Update final rule (81 FR
52156), we initiated a policy of applying a wage index standardization
factor to hospice payments in order to eliminate the aggregate effect
of annual variations in hospital wage data. For FY 2026 hospice rate
setting, we are continuing our longstanding policy of using the most
recent data available. Specifically, we proposed to use FY 2024 claims
data (as of January 13, 2025) for the FY 2026 payment rate updates. We
noted that the budget neutrality factors and payment rates would be
updated with more complete FY 2024 claims data for the final rule. With
updated claims data (as of May 9, 2025), the wage index standardization
factor was calculated by simulating total payments using FY 2024
hospice utilization claims data with the FY 2025 wage index (pre-floor,
pre-reclassified hospital wage index with the hospice floor and the 5
percent cap on wage index decreases) and FY 2025 payment rates and
compare it to our simulation of total payments using FY 2024
utilization claims data, the FY 2026 hospice wage index (pre-floor,
pre-reclassified hospital wage index with hospice floor, and the 5
percent cap on wage index decreases) and FY 2025 payment rates. By
dividing payments for each level of care (RHC days 1 through 60, RHC
days 61+, CHC, IRC, and GIP) using the FY 2025 wage index and FY 2025
payment rates for each level of care by the FY 2026 wage index and FY
2025 payment rates, we obtain a wage index standardization factor for
each level of care. The final wage index standardization factors using
FY 2024 claims data (as of May 9, 2025) for each level of care are
shown in Tables 1 and 2.
The final FY 2026 RHC payment rates are shown in Table 1. The final
FY 2026 payment rates for CHC, IRC, and GIP are shown in Table 2.
Table 1--Final FY 2026 Hospice RHC Payment Rates
----------------------------------------------------------------------------------------------------------------
SIA budget Wage index FY 2026
Code Description FY 2025 neutrality standardization hospice FY 2026
payment rates factor factor payment update payment rates
----------------------------------------------------------------------------------------------------------------
651....... Routine Home Care $224.62 1.0005 1.0011 1.026 $230.83
(days 1-60).
651....... Routine Home Care 176.92 1.0001 1.0022 1.026 181.94
(days 61+).
----------------------------------------------------------------------------------------------------------------
Table 2--Final FY 2026 Hospice CHC, IRC, and GIP Payment Rates
----------------------------------------------------------------------------------------------------------------
Wage index FY 2026
Code Description FY 2025 standardization hospice FY 2026 payment rates
payment rates factor payment update
----------------------------------------------------------------------------------------------------------------
652............ Continuous Home Care $1,618.59 1.0082 1.026 $1,674.29 ($69.76 per
Full Rate = 24 hours hour).
of care.
655............ Inpatient Respite 518.78 1.0004 1.026 $532.48.
Care.
656............ General Inpatient 1,170.04 0.9995 1.026 $1,199.86.
Care.
----------------------------------------------------------------------------------------------------------------
Sections 1814(i)(5)(A) through (C) of the Act require that hospices
submit quality data on measures to be specified by the Secretary. In
the FY 2012 Hospice Wage Index and Rate Update final rule (76 FR 47320
through 47324), we implemented a Hospice Quality Reporting Program
(HQRP) as required by those sections. Hospices were required to begin
collecting quality data in October 2012 and submit those quality data
in 2013. Section 1814(i)(5)(A)(i) of the Act requires that beginning FY
2014 through FY 2023, the Secretary shall reduce the market basket
percentage increase by 2 percentage points for any hospice that does
not comply with the quality data submission requirements with respect
to that FY. Section 1814(i)(5)(A)(i) of the Act was amended by section
407(b) of Division CC, Title IV of the Consolidated Appropriations Act
(CAA), 2021 (Pub. L. 116-260) to change the payment reduction for
failing to meet hospice quality reporting requirements from 2 to 4
percentage points. Depending on the amount of the annual update for a
particular year, a reduction of 4 percentage points beginning in FY
2024 makes a negative payment update more likely than the previous 2
percent reduction. This could result in the annual market basket update
being less than zero percent for a FY and may result in payment rates
that are less than payment rates for the preceding FY. We applied this
policy beginning with the FY 2024 Annual Payment Update (APU), which we
based on CY 2022 quality data. Therefore, the final FY 2026 rates for
hospices that do not submit the required quality data would be updated
by -1.4 percent, which is the final FY 2026 hospice payment update
percentage of 2.6 percent minus 4 percentage points. The final payment
rates for hospices that do not submit the required quality data are
shown in Tables 3 and 4.
[[Page 37415]]
Table 3--Final FY 2026 Hospice RHC Payment Rates for Hospices That DO NOT Submit the Required Quality Data
----------------------------------------------------------------------------------------------------------------
FY 2026 hospice
FY 2025 SIA budget Wage index payment update of FY 2026
Code Description payment rates neutrality standardization 2.6%-4 percentage payment rates
factor factor points =-1.4%
----------------------------------------------------------------------------------------------------------------
651...... Routine Home $224.62 1.0005 1.0011 0.986 $221.83
Care (days 1-
60).
651...... Routine Home 176.92 1.0001 1.0022 0.986 174.84
Care (days
61+).
----------------------------------------------------------------------------------------------------------------
Table 4--Final FY 2026 Hospice CHC, IRC, and GIP Payment Rates for Hospices That DO NOT Submit the Required
Quality Data
----------------------------------------------------------------------------------------------------------------
FY 2026 hospice
FY 2025 Wage index payment update of FY 2026 payment
Code Description payment rates standardization 2.6%-4 percentage rates
factor points =-1.4%
----------------------------------------------------------------------------------------------------------------
652........... Continuous Home Care $1,618.59 1.0082 0.986 $1,609.02 ($67.04
Full Rate = 24 per hour).
hours of care.
655........... Inpatient Respite 518.78 1.0004 0.986 511.72.
Care.
656........... General Inpatient 1,170.04 0.9995 0.986 1,153.08.
Care.
----------------------------------------------------------------------------------------------------------------
We received two public comments on our proposals for the FY 2026
hospice payment rates. A summary of the comments and our responses to
those comments are as follows:
Comment: A commenter expressed concern with the enforcement of the
4 percent payment reduction for hospices that fail to meet reporting
requirements. This commenter stated that the strict enforcement of this
penalty could disproportionately impact smaller or resource-limited
providers and ultimately affect vulnerable patients.
Another commenter recommended that the Service Intensity Add-On
(SIA) payment be expanded to include social work visits beyond the
final 7 days to improve holistic end-of-life care.
Response: We appreciate the commenters' recommendations. However,
these comments are outside the scope of the FY 2026 Hospice Wage Index
and Payment Update proposed rule as we did not propose any changes to
these policies. Furthermore, the 4 percent payment reduction for
failing to meet hospice quality reporting requirements is required by
statute. Any changes to these policies would need to be proposed
through rulemaking or updated through statute.
Final Decision: We are finalizing the FY 2026 hospice payment
rates, SIA budget neutrality factor, and wage index standardization
factors. The final FY 2026 RHC payment rates are shown in Table 1. The
final FY 2026 payment rates for CHC, IRC, and GIP are shown in Table 2.
The final payment rates for hospices that do not submit the required
quality data are shown in Tables 3 and 4.
4. Final Hospice Cap Amount for FY 2026
As discussed in the FY 2016 Hospice Wage Index and Rate Update
final rule (80 FR 47183), we implemented changes mandated by the IMPACT
Act of 2014 (Pub. L. 113-185, Oct. 6, 2014). Specifically, we stated
that for accounting years that end after September 30, 2016, and before
October 1, 2025, the hospice cap is updated by the hospice payment
update percentage rather than using the consumer price index for all
urban consumers (CPI-U). Division CC, section 404 of the CAA, 2021
extended the accounting years impacted by the adjustment made to the
hospice cap calculation until 2030. In the FY 2022 Hospice Wage Index
and Rate Update final rule (86 FR 42539), we finalized conforming
regulation text changes at Sec. 418.309 to reflect the provisions of
the CAA, 2021. Division P, section 312 of the CAA, 2022 (Pub. L. 117-
103) amended section 1814(i)(2)(B) of the Act and extended the
provision that mandates the hospice cap be updated by the hospice
payment update percentage (the inpatient hospital market basket
percentage increase reduced by the productivity adjustment) rather than
the CPI-U for accounting years that end after September 30, 2016 and
before October 1, 2031. Division FF, section 4162 of the CAA, 2023
(Pub. L. 118-328) amended section 1814(i)(2)(B) of the Act and extended
the provision that currently mandates the hospice cap be updated by the
hospice payment update percentage (the inpatient hospital market basket
percentage increase reduced by the productivity adjustment) rather than
the CPI-U for accounting years that end after September 30, 2016 and
before October 1, 2032. Division G, Section 308 of the Consolidated
Appropriations Act, 2024 (CAA, 2024) (Pub. L. 118-42) extends this
provision to October 1, 2033. Before the enactment of this provision,
the hospice cap update was set to revert to the original methodology of
updating the annual cap amount by the CPI-U beginning on October 1,
2032. Therefore, for accounting years that end after September 30,
2016, and before October 1, 2033, the hospice cap amount is updated by
the hospice payment update percentage rather than the CPI-U. In the FY
2025 Hospice Wage Index and Rate Update final rule (89 FR 64202), as a
result of the changes mandated by the CAA, 2024, we finalized
conforming regulation text changes at Sec. 418.309 to reflect the
revisions at section 1814(i)(2)(B) of the Act.
The proposed hospice cap amount for the FY 2026 cap year was
$35,292.51, which was equal to the FY 2025 cap amount ($34,465.34)
updated by the proposed FY 2026 hospice payment update of 2.4 percent.
We also proposed that if more recent data became available after the
publication of the proposed rule and before the publication of this
final rule (for example, a more recent estimate of the hospice payment
update percentage), we would use such data, if appropriate, to
determine the hospice cap amount in the FY 2026 final rule. Using the
updated data, the final cap amount for the FY 2026 cap year will be
$35,361.44 which is equal to the FY 2025 cap
[[Page 37416]]
amount ($34,465.34) updated by the final FY 2026 hospice payment update
percentage of 2.6 percent.
We received eight public comments on our proposed update to the
hospice cap for FY 2026. A summary of the comments and our responses to
those comments are as follows:
Comment: A commenter expressed support for the proposed FY 2026
hospice cap amount.
Response: We thank this commenter for their support.
Comment: Most commenters opposed the proposed 2.4 percent update to
the hospice cap amount for FY 2026. These commenters expressed concern
that the proposed hospice cap update does not reflect the rising costs
that hospices are currently facing. A commenter stated that the hospice
cap warrants reevaluation to ensure it aligns with actual per-patient
costs and does not disproportionately impact high-need populations.
Another commenter recommended CMS reform the aggregate cap to account
for patient mix, acuity, and regional cost differentials, ensuring that
providers serving complex patients are not penalized. This commenter
stated that the cap disproportionately penalizes providers caring for
patients with non-cancer diagnoses; dual-eligible individuals requiring
wraparound services and extended hospice stays; and vulnerable
populations with limited access to caregivers or community support. The
commenter also stated that even with the cap increase, many hospices
will still exceed the limit due to factors beyond their control which
creates disincentives to admit or retain high-need patients and
exacerbates disparities in access to care. Finally, a commenter
recommended that CMS abolish the hospice cap and stated that the
hospice aggregate cap disincentivizes hospices from serving the most
complex, high-need patients.
Response: We thank the commenters for their recommendations
pertaining to the hospice cap; however, we are required by law to
update the hospice cap amount from the preceding year by the hospice
payment update percentage, in accordance with section 1814(i)(2)(B)(ii)
of the Act. Therefore, we do not have the statutory authority to update
the cap amount in a different manner nor account for patient mix,
acuity, or regional cost differentials.
Final Decision: We are finalizing the update to the hospice cap
amount for FY 2026 in accordance with statutorily mandated
requirements.
B. Finalized Regulation Change to Admission to Hospice Care
The Medicare hospice benefit provides coverage for a comprehensive
set of services described in section 1861(dd)(1) of the Act for
individuals who are deemed ``terminally ill'' based on a medical
prognosis that the individual's life expectancy is 6 months or less, as
described in section 1861(dd)(3)(A) of the Act. As such, section
1814(a)(7)(A) of the Act requires the individual's attending physician
(if the patient designates an attending physician) and hospice medical
director (or physician member of the interdisciplinary group (IDG)) to
certify in writing at the beginning of the first 90-day period of
hospice care that the individual is ``terminally ill'' based on the
physician's or medical director's clinical judgment regarding the
normal course of the individual's illness. In a subsequent 90- or 60-
day period of hospice care, only the hospice medical director or the
physician member of the IDG recertifies at the beginning of the period
that the patient is terminally ill based on such clinical judgment.
Operation Restore Trust (ORT), a government initiative that began
in 1995, coordinated with the Centers for Medicare & Medicaid Services
(CMS), the Office of the Inspector General (OIG), and the
Administration on Aging (AoA) to identify vulnerabilities in the
Medicare program and to pursue ways to reduce Medicare's exposure to
fraud and abuse. Through audits, ORT identified several areas of
weakness in the hospice benefit, primarily in the area of hospice
eligibility. In response to concerns raised by ORT regarding
beneficiaries who had been receiving hospice care for more than 210
days but who were later determined to have not been eligible \3\ and to
reduce Medicare exposure to abusive practices, the FY 2006 Medicare
Program; Hospice Care Amendments final rule (70 FR 70532, 70535, 70547)
added a new Sec. 418.25, ``Admission to hospice care,'' which
established specific requirements that must be met before a hospice
provider admits a patient to its care.
---------------------------------------------------------------------------
\3\ Operation Restore Trust: Review of Medicare Hospice
Eligibility at the San Diego Hospice Corporation https://oig.hhs.gov/reports/all/1997/operation-restore-trust-review-of-medicare-hospice-eligibility-at-the-san-diego-hospice-corporation/.
---------------------------------------------------------------------------
Section 418.25(a) requires that the hospice admit a patient only on
the recommendation of the medical director (or the physician designee,
as defined in Sec. 418.3) in consultation with, or with input from,
the patient's attending physician (if any). Section 418.25(b) sets out
the information that the hospice medical director (or the physician
designee, as defined in Sec. 418.3) must consider in reaching a
decision to certify that the patient is terminally ill. Section
418.25(b) is not the only regulation that discusses the certification
of terminal illness. Section 418.22(c)(1) sets forth the sources of the
certification of terminal illness and Sec. 418.102(b) provides the
standard for the initial certification of terminal illness in the
condition of participation (CoP) for hospice medical directors.
However, while each of these regulations pertains to the determination
that a patient is terminally ill, they do not align regarding the
physicians who can make these determinations.
In particular, Sec. 418.25 only describes any of the two
physicians on the recommendation of whom the hospice may admit a
patient: the medical director or the physician designee (in addition to
the patient's attending physician, if any). However, the payment
certification of terminal illness and medical director CoP regulations
at Sec. Sec. 418.22(c)(1)(i) and 418.102(b), respectively, list any of
three physicians who provide the written certification of terminal
illness: the medical director of the hospice, the physician designee,
or physician member of the hospice IDG.
Several out of scope comments were received regarding the FY 2025
Hospice Wage Index and Rate Update final rule (89 FR 64231),
specifically requesting that the physician member of the IDG be added
to the hospice admission regulation at Sec. 418.25. Specifically,
commenters requested that the language regarding which physicians can
make determinations for hospice admission align with current
certification requirements and CoPs. We did not make a change to Sec.
418.25 in the FY 2025 hospice final rule as we did not propose this
change.
We agree with the commenters that our regulations should
consistently describe the physicians who can certify terminal illness
and determine patient admission to hospice care. Accordingly, to align
with the current payment and CoP regulations at Sec. Sec.
418.22(c)(1)(i) and 418.102(b), respectively, we proposed to add the
text ``or the physician member of the hospice interdisciplinary group''
at Sec. 418.25(a) and (b) to indicate that, in addition to the medical
director or physician designee, the physician member of the hospice IDG
may also determine admission to hospice care. We noted that we believe
aligning the language at Sec. 418.25(a) and (b) with the language at
Sec. Sec. 418.102(b) and 418.22(c)(1)(i) would allow for greater
[[Page 37417]]
consistency between key components of hospice regulations and policies.
We received 31 public comments on our proposed changes to Sec.
418.25(a) and (b). A summary of the comments and our responses to those
comments are as follows:
Comment: Commenters overwhelmingly supported the proposal to add
the physician member of the hospice IDG to Sec. 418.25(a) and (b) and
a few commenters expressed appreciation that CMS was responsive to the
out of scope requests provided in the FY 2025 Hospice Wage Index and
Rate Update final rule (89 FR 64231). Specifically, commenters stated
that the regulation change would reduce ambiguity and improve clarity,
leading to improved patient access to hospice care; reduce delays in
services; improve timeliness of hospice services; improve accurate
payment determinations; prevent inappropriate hospice citations; and
align language with hospice certification payment requirements and
CoPs.
Response: We thank commenters for their support.
Comment: We received a comment that opposed the addition of the
physician member of the hospice IDG due to concerns that such a
physician may materially benefit from recommending hospice if the
physician has significant ownership in the for-profit hospice.
Response: We appreciate the concern raised; however, we would like
to remind readers that Sec. 418.25 simply aligns the admission process
requirements with the certification requirements. The certification
source for certifying a patient for hospice at Sec. 418.22(c) includes
the physician member of the IDG and also requires the individual's
attending physician, if the individual has one, to certify the
individual for hospice in the initial 90-day certification for hospice
admission. Additionally, a patient must still meet eligibility
requirements under Sec. 418.20. The text change aligns language
between payment policies and the CoPs in order to reduce ambiguity.
Comment: Several commenters requested clarification regarding
whether the proposed regulatory changes to Sec. 418.25(a) and (b)
would also apply to Sec. 418.26 (Discharge from hospice care) or
whether we would be proposing this change (and include additional
physician types) in future rulemaking. Some of these commenters
requested that the same proposed physician language in Sec. 418.25 be
applied to Sec. 418.26 for consistency and clarity, to improve timely
discharge situations, and to further align hospice regulatory language.
Response: We thank commenters for their comments and
recommendations. CMS is only finalizing the proposed changes to Sec.
418.25(a) and (b) and is not amending Sec. 418.26. We may consider
adding ``physician member of the interdisciplinary group'' or
additional physician types to Sec. 418.26 in future rulemaking.
Comment: A commenter requested allowing nurse practitioners (NPs)
and physician assistants (PAs) to certify a beneficiary as terminally
ill.
Response: We thank this commenter for their suggestion; however,
allowing NPs and PAs to certify a beneficiary as terminally ill is not
permitted under the statute.
Final Decision: After consideration of public comments, we are
finalizing our proposal to add the text ``or the physician member of
the hospice interdisciplinary group'' to Sec. 418.25(a) and (b) to
indicate that, in addition to the medical director or physician
designee, the physician member of the hospice IDG may also determine
admission to hospice care.
C. Finalized Clarifying Regulation Change Regarding Face-to-Face
Attestation
The Medicare Program; Home Health Prospective Payment System Rate
Update for Calendar Year 2011; Changes in Certification Requirements
for Home Health Agencies and Hospices final rule (CY 2011 HH PPS final
rule) implemented the requirements in section 1814(a)(7)(D) of the Act,
as added by section 3132(b) of the Affordable Care Act (75 FR 70435).
Subclause (i) of section 1814(a)(7)(D) requires that on and after
January 1, 2011, a hospice physician or nurse practitioner (NP) must
have a face-to-face encounter with a hospice patient to determine the
patient's continued eligibility for hospice care prior to the 180-day
recertification, and prior to each subsequent recertification. Section
1814(a)(7)(D)(i) also requires that the hospice physician or NP attest
that such a visit took place, in accordance with procedures established
by the Secretary. Additionally, as existing regulatory text at Sec.
418.22 requires, if the face-to-face encounter was not performed by the
certifying physician, the attestation of the physician or nurse
practitioner who performed the face-to-face encounter shall state that
the clinical findings of that visit were provided to the certifying
physician for use in determining continued eligibility for hospice
care. These requirements were codified at Sec. 418.22 to ensure that a
hospice patients' continued eligibility is appropriately assessed
through a face-to-face encounter conducted by either a hospice
physician or NP.
As explained in the CY 2011 HH PPS final rule, the regulation at
Sec. 418.22(b)(4) set forth that the physician or NP who performs the
face-to-face encounter with the patient must attest in writing that he
or she had a face-to-face encounter with the patient and, at that time,
set forth that the attestation of the nurse practitioner shall state
that the clinical findings of that visit were provided to the
certifying physician, for use in determining whether the patient
continues to have a life expectancy of 6 months or less, should the
illness run its normal course. Further, the regulation set forth that
the attestation, its accompanying signature, and the date signed, must
be a separate and distinct section of, or an addendum to, the
recertification form, and must be clearly titled (75 FR 70463).
In the FY 2012 Hospice Wage Index final rule (76 FR 47314), as a
result of interested parties' concerns regarding access risks resulting
from the policy implemented in the CY 2011 HH PPS final rule, we
finalized that any hospice physician can perform the face-to-face
encounter regardless of whether that physician recertifies the
patient's terminal illness and composes the recertification narrative.
Additionally, we amended the regulatory text at Sec. 418.22(b)(4) to
provide that the attestation of the NP or a non-certifying hospice
physician shall state that the clinical findings of that encounter were
provided to the certifying physician, for use in determining continued
eligibility for hospice.
In that final rule, however, we inadvertently omitted from the
regulatory text at Sec. 418.22(b)(4) the explicit requirements that
the attestation include the accompanying signature of the practitioner
who performed the -face encounter, and the date signed. While the CY
2011 HH PPS final rule regulatory text required the hospice physician
or the NP conducting the encounter to attest to its occurrence,
including the date and their signature, the unintentional omission of
this explicit requirement in the FY 2012 Hospice Wage Index final rule
led to discrepancies in documentation practices and introduced
potential ambiguity into compliance requirements along with
inconsistencies in implementation among hospice providers.
Specifically, the lack of clarity regarding the full attestation
requirements complicated documentation standards and audit processes,
led to confusion about the
[[Page 37418]]
expectations for what elements the attestation should minimally
include, and thereby undermined of the intent of the original statute
and rule to require verifiable documentation of appropriately assessed
continued eligibility.
As such, we proposed to amend Sec. 418.22(b)(4) to set forth that
the physician, or NP who performs the face-to-face encounter attest
that the face-to-face encounter occurred, and the attestation must
include the signature of the physician or NP who conducted the face-to-
face encounter and the date it was signed. Further, we proposed that
the attestation, its accompanying signature, and the date signed must
be a separate and distinct section of, or an addendum to, the
recertification form, and must be clearly titled. With these proposals,
we sought to realign the regulatory text at Sec. 418.22(b)(4) with the
original intent of the CY 2011 HH PPS final rule and the statutory
requirement in section 1814(a)(7)(D)(i)(I) of the Act.
Accordingly, we proposed to clarify the current regulation at Sec.
418.22(b)(4) as follows: The physician or nurse practitioner who
performs the face-to-face encounter with the patient described in
paragraph (a)(4) of this section must attest in writing that he or she
had a face-to-face encounter with the patient, including the date of
that visit. The attestation must include the physician's or nurse
practitioner's signature and the date it was signed. The attestation,
its accompanying signature, and the date signed, must be a separate and
distinct section of, or an addendum to, the recertification form, and
must be clearly titled. If the face-to-face encounter was not performed
by the certifying physician, the attestation of the physician or nurse
practitioner who performed the face-to-face encounter shall state that
the clinical findings of that visit were provided to the certifying
physician for use in determining continued eligibility for hospice
care.
We noted that these additions would help to resolve current
ambiguities, improve documentation standards, and promote consistent
implementation across providers.
In total, we received 26 public comments on our proposed
clarification of the regulation text regarding the face-to-face
attestation. The following is a summary of the comments we received,
our responses, and the final decision.
Comment: Several commenters supported the proposed regulatory text
changes at Sec. 418.22(b)(4), citing that a more detailed face-to-face
encounter attestation process will strengthen program integrity.
Commenters also stated the proposed attestation changes are already
supported by hospice electronic medical records, reflect the current
practice at many hospices, and are not expected to disrupt operations.
Response: We thank the commenters for this feedback.
Comment: A few commenters requested that CMS work with Congress to
expand telehealth flexibility for face-to-face recertification.
Response: We appreciate the commenters' recommendations; however,
these comments are outside the scope of the proposed rule. Please note
that section 2207(f) of the Full-Year Continuing Appropriations and
Extensions Act, 2025 (Pub. L. 119-4, March 15, 2025), amended section
1814(a)(7)(D)(i)(II) of the Act and extended the use of telehealth by a
hospice physician or hospice nurse practitioner to conduct a face-to-
face encounter for the sole purpose of hospice recertification through
September 30, 2025.
Comment: A commenter stated Advanced Practice Registered Nurses
(APRN) should be permitted to both perform and sign the attestation
when conducting the face-to-face encounter to reduce redundancy,
improve timeliness, and enhance access to care especially given access
issues in rural areas and their scope of practice under state law. As
such, this commenter strongly encouraged CMS to revise the regulation
to authorize APRNs, within their scope of practice, to both conduct and
sign the face-to-face encounter attestation for hospice
recertification.
Response: We thank the commenter and acknowledge the critical role
APRNs play in hospice care delivery. We remind commenters that in
accordance with subclause (i) of section 1814(a)(7)(D) of the Act, a
hospice physician or NP may conduct a face-to- face encounter with a
hospice patient to determine the patient's continued eligibility for
hospice care prior to the 180-day recertification, and prior to each
subsequent recertification. However, the statute limits the
practitioners who may conduct a face-to-face, and thereby does not
permit other APRNs such as clinical nurse specialists (CNS), certified
registered nurse anesthetists (CRNA), or certified nurse midwives (CNM)
to perform this function.
Comment: A few commenters noted that the requirement for attesting
that findings were shared with the certifying physician is redundant
given existing narrative requirements. Specifically, commenters stated
that Sec. 418.22(b)(3)(v) already require the certifying physician's
narrative to include an explanation of why the clinical findings of the
face-to-face encounter support a life expectancy of 6 months or less,
and that it would not be possible for the certifying physician to
include this in the narrative if the physician was not provided with
the clinical findings from the encounter (contained in the clinical
note from the encounter).
Response: While we appreciate this comment, it is outside the scope
of the proposal in the CY 2026 hospice proposed rule. We may consider
this issue in future rulemaking.
Comment: While there was agreement that the proposed clarification
to the regulation text at Sec. 418.22(b)(4) requiring the signature
and date of the signature be included with the face-to-face attestation
will increase the integrity of this process, the majority of the
commenters believe that implementation of this proposal would increase
provider documentation burden. Commenters contend that the attestation
process should prioritize appropriate clinical oversight rather than
introduce administrative barriers that could delay care for vulnerable
patients. Commenters suggested this proposal may result in a potential
increase in delayed care for the most vulnerable patient populations.
Additionally, several commenters remarked that the proposed attestation
formatting requirements introduce an increase in audit vulnerability,
compliance pitfalls and technical denials. They stated flexibility
should be permitted, especially due to EMR constraints and costs, and
that CMS should remove the proposed specific formatting requirement for
face-to-face attestations.
Response: We appreciate these comments and agree that regulatory
requirements should support, rather than hinder, timely access to
appropriate hospice care. We also recognize the importance of balancing
program integrity with administrative feasibility and remain committed
to employing documentation requirements that do not impede care
delivery. Additionally, we agree with commenters who pointed out that
we have historically allowed hospices discretion in how documentation
is structured, including for example, with the hospice election
statement and addendum.
Comment: Several interested parties requested that CMS consider
allowing a signed clinical note to serve as a substitute to a separate
attestation that the face-to-face encounter occurred, highlighting that
the statutory intent under section 1814(a)(7)(D)(i) of the Act is met
if signed and dated clinical
[[Page 37419]]
documentation clearly demonstrates that the encounter occurred and is
filed in the medical record.
Response: Section 1814(a)(7)(D)(i) of the Act specifies that the
medical record must include evidence that a face-to-face encounter
occurred prior to each recertification for hospice services. While CMS
previously required a separate attestation to ensure that this
statutory requirement was met, we recognize the burden in requiring a
separate attestation when the information is already documented within
a signed and dated clinical note. Therefore, we believe the statutory
requirement is met through the signed and dated clinical note, without
an additional attestation. CMS generally aims to reduce burden when
appropriate, and we appreciate commenters bringing this to our
attention.
Final Decision: In response to commenters' aforementioned concerns
regarding potential administrative burden, and CMS' goal to maintain
the validity of the recertification process, we are finalizing a
modification to the regulation text at Sec. 418.22(b)(4) to clarify
that the attestation requirement may be fulfilled by not only a clearly
titled section of or an addendum to the recertification form, but also
by a signed and dated clinical note within the medical record that
documents clear indication that the face-to-face encounter occurred and
includes the date of the visit, the signature of the practitioner who
conducted the face-to-face encounter, and the date of the signature.
The proposed revisions to Sec. 418.22(b)(4) align with our
proposal to implement a revised attestation policy. As we stated in the
proposed rule, our goal remains to resolve ambiguities that stem from
prior rulemaking by clarifying that the attestation is identifiable and
verifiable and therefore, must include the signature and date of the
practitioner who conducted the face-to-face encounter in accordance
with the statutory requirement at section 1814(a)(7)(D)(i) of the Act.
The objective in the aforementioned revision to allow the face-to-face
clinical note to serve as meeting the attestation requirement also
achieves the regulatory intent that was first implemented in the CY
2011 HH PPS final rule and amended in the FY 2012 Hospice Wage Index
final rule, as the clinical note still requires a dated signature from
the practitioner who conducted the face-to-face encounter in order to
allow clear identification of the attestation within the medical
record. Moreover, a dated signature on the face-to-face clinical note
serves to meet the definition of a medical attestation since it is a
formal statement by a qualified practitioner verifying the accuracy of
medical documentation which would include the clinical findings of the
face-to-face encounter, the date of the visit, and the signature of the
physician or nurse practitioner who conducted the face-to-face
encounter, and the date of the signature. Given that these changes
collectively address interested party concerns and provide increased
clarity and standardization, while also preserving the statutory
requirement at section 1814(a)(7)(D)(i) of the Act that a face-to-face
encounter occur and be sufficiently documented by the practitioner who
conducted said visit for each recertification for continued
eligibility, these revisions fall within the scope of what a reasonable
commenter would have understood from the FY 2026 Hospice proposed rule.
Therefore, we are finalizing a revision to the regulation text at
Sec. 418.22(b)(4) to state, the physician or nurse practitioner who
performs the face-to-face encounter with the patient described in
paragraph (a)(4) must attest in writing that he or she had a face-to-
face encounter with the patient, including the date of that visit. The
attestation must include the physician's or nurse practitioner's
signature and the date it was signed. The attestation could be a
separate and distinct section of, or an addendum to, the
recertification or the signed and dated face-to-face clinical note
itself, as long as said clinical note indicates the face-to-face
encounter occurred, and includes the clinical findings of the face-to-
face encounter, the date of the visit, the signature of the physician
or nurse practitioner who conducted the face-to-face encounter, and the
date of the signature. If the attestation of the nurse practitioner or
a non-certifying hospice physician is a separate and distinct section
of, or an addendum to, the recertification, the attestation shall state
that the clinical findings of that visit were provided to the
certifying physician for use in determining continued eligibility for
hospice care.
D. Technical Regulations Text Change to Certification of Terminal
Illness: Face-to-Face Encounter
In this final rule, we include a technical change that conforms the
regulatory text at Sec. 418.22(a)(4)(ii) with its underlying statute
at section 1814(a)(7)(D)(i)(II) of the Act by changing the date
``December 31, 2024'' to ``September 30, 2025''. We inadvertently
omitted this date change in the proposed rule. A discussion of this
change is included in section IV. of this final rule, Waiver of
Proposed Rulemaking.
E. Updates for the Hospice Quality Reporting Program (HQRP)
1. Background and Statutory Authority
Section 1814(i)(5) of the Act requires the Secretary to establish
and maintain a quality reporting program for hospices. The Hospice
Quality Reporting Program (HQRP), consisting of Hospice Item Set (HIS),
administrative data, and Consumer Assessment of Healthcare Providers
and Systems (CAHPS[supreg]), Hospice Survey, specifies reporting
requirements that hospices complete and submit a standardized set of
items for each patient to capture patient-level data, regardless of
payer or patient age (Sec. 418.312(b)). Beginning with FY 2014,
section 1814(i)(5) of the Act requires the Secretary to reduce the
market basket update by 2 percentage points for those hospices failing
to meet quality reporting requirements. Section 407(b) of Division CC,
Title IV of the Consolidated Appropriations Act (CAA), 2021 amended
section 1814(i)(5)(A)(i) of the Act to change the payment reduction for
failing to meet hospice quality reporting requirements from 2 to 4
percentage points beginning in FY 2024 for any hospice that does not
comply with the submission requirements above for that FY. In the FY
2024 Hospice final rule, we codified the application of the 4-
percentage point payment reduction for failing to meet hospice quality
reporting requirements and set completeness thresholds at Sec.
418.312(j).
Depending on the amount of the annual update for a particular year,
a reduction of 4 percentage points beginning in FY 2024 could result in
the annual market basket update being less than zero percent for a FY
and may result in payment rates that are less than payment rates for
the preceding FY. Any reduction based on failure to comply with the
reporting requirements, as required by section 1814(i)(5)(B) of the
Act, would apply only for the specified year.
In the FY 2014 Hospice Wage Index and Payment Rate Update final
rule (78 FR 48234, 48257 through 48262), and in compliance with section
1814(i)(5)(C) of the Act, we finalized a new standardized patient-level
data collection vehicle called the Hospice Item Set (HIS). We also
finalized the specific collection of data items that support eight
consensus-based entity (CBE)-endorsed measures for hospice.
In the FY 2015 Hospice Wage Index and Payment Rate Update final
rule (79
[[Page 37420]]
FR 50452), we finalized national implementation of the CAHPS[supreg]
Hospice Survey, a component of the CMS HQRP which is used to collect
data on the experiences of hospice patients and the primary caregivers
listed in their hospice records. Readers who want more information
about the development of the survey, originally called the Hospice
Experience of Care Survey, may refer to the FY 2014 and FY 2015 Hospice
Wage Index and Payment Update final rules (78 FR 48234 and 79 FR 50452,
respectively) or to https://www.hospicecahpssurvey.org/. National
implementation commenced January 1, 2015. We adopted eight
CAHPS[supreg] survey-based measures for the CY 2018 data collection
period and for subsequent years. These eight measures are publicly
reported on the Care Compare website.
In the FY 2016 Hospice Wage Index and Rate Update final rule (80 FR
47142, 47186 through 47188), we finalized the policy for retention of
HQRP measures adopted for previous payment determinations and seven
factors for removal. In that same final rule, we discussed how we would
provide public notice through rulemaking of measures under
consideration for removal, suspension, or replacement. We also stated
that if we had reason to believe continued collection of a measure
raised potential safety concerns, we would take immediate action to
remove the measure from the HQRP and not wait for the annual rulemaking
cycle. The measures would be promptly removed, and we would immediately
notify hospices and the public of such a decision through the usual
HQRP communication channels, including but not limited to listening
sessions, email notifications, Open Door Forums, and Web postings. In
such instances, the removal of a measure would be formally announced in
the next annual rulemaking cycle.
On August 31, 2020, we added correcting language to the FY 2016
Hospice Wage Index and Payment Rate Update and Hospice Quality
Reporting Requirements; Correcting Amendment (85 FR 53679) hereafter
referred to as the FY 2021 HQRP Correcting Amendment. In the correcting
amendment, we made updates to Sec. 418.312 to correct technical errors
identified in the FY 2016 Hospice Wage Index and Payment Rate Update
final rule. Specifically, the FY 2021 HQRP Correcting Amendment (85 FR
53679) added paragraph (i) to Sec. 418.312 to reflect our exemptions
and extensions requirements for reporting, which were referenced in the
preamble but inadvertently omitted from the regulations text. Thus,
these exemptions or extensions can occur when a hospice encounters
certain extraordinary circumstances.
In the FY 2017 Hospice Wage Index and Payment Rate Update final
rule, we finalized the ``Hospice Visits When Death is Imminent''
measure pair (HVWDII, Measure 1 and Measure 2), effective April 1,
2017. We refer the public to the FY 2017 Hospice Wage Index and Payment
Rate Update final rule (81 FR 52144, 52163 through 52169) for a
detailed discussion.
As stated in the FY 2019 Hospice Wage Index and Rate Update final
rule (83 FR 38622, 38635 through 38648), we launched the ``Meaningful
Measures Initiative'' (which identifies high priority areas for quality
measurement and improvement) to improve outcomes for patients, their
families, and providers while also reducing burden on clinicians and
providers. The Meaningful Measures Initiative is not intended to
replace any existing CMS quality reporting programs but will help such
programs identify and select individual measures. The Meaningful
Measures Initiative priority areas are intended to increase measure
alignment across our quality programs and other public and private
initiatives. Additionally, it will point to high priority areas where
there may be gaps in available quality measures while helping to guide
our efforts to develop and implement quality measures to fill those
gaps. More information about the Meaningful Measures Initiative can be
found at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityInitiativesGenInfo/MMF/General-info-Sub-Page.html.
In the FY 2022 Hospice Wage Index and Payment Rate Update final
rule (86 FR 42552), we finalized two new measures using claims data:
(1) Hospice Visits in the Last Days of Life (HVLDL); and (2) Hospice
Care Index (HCI). We also removed the HVWDII measure, as it was
replaced by HVLDL. We also finalized a policy that claims-based
measures would use 8 quarters of data, which would allow CMS to
publicly report on more hospices. Additionally, the rule indicated that
public data reflecting hospices' reporting of the two new claims-based
quality measures (QMs), the HVLDL and the HCI measures, would be
available on the Care Compare/Provider Data Catalogue (PDC) web pages
as of the August 2022 refresh.
In addition, we removed the seven HIS Process Measures from the
program as individual measures, and ceased their public reporting
because, in our view, the HIS Comprehensive Assessment Measure is
sufficient for measuring care at admission without the seven individual
process measures. In the FY 2022 Hospice Wage Index and Rate Update
final rule (86 FR 42553), we finalized Sec. 418.312(b)(2), which
requires hospices to provide administrative data, including claims-
based measures, as part of the HQRP requirements for Sec. 418.306(b).
In that same final rule, we provided CAHPS Hospice Survey updates.
In the FY 2023 and FY 2024 Hospice Wage Index final rules, we did
not propose any new quality measures. However, we provided updates on
already-adopted measures.
In the FY 2025 Hospice Wage Index final rule, the HQRP finalized
two measures, including new data collection through the Hospice
Outcomes and Patient Evaluation (HOPE) tool and plans for further
development.
Table 5 shows the current quality measures in effect for the FY
2026 HQRP, which were updated and finalized in the FY 2025 Hospice Wage
Index and Payment Rate Update final rule.
Table 5--Quality Measures in Effect for the FY 2026 Hospice Quality
Reporting Program
------------------------------------------------------------------------
Hospice Quality Reporting Program
-------------------------------------------------------------------------
Hospice Items Set (HIS) and Hospice Outcomes and Patient Evaluation
(HOPE)
------------------------------------------------------------------------
Hospice and Palliative Care Composite Process Measure--Comprehensive
Assessment Measure at Admission includes:
1. Patients Treated with an Opioid who are Given a Bowel Regimen
2. Pain Screening
3. Pain Assessment
4. Dyspnea Treatment
5. Dyspnea Screening
[[Page 37421]]
6. Treatment Preferences
7. Beliefs/Values Addressed (if desired by the patient)
------------------------------------------------------------------------
Administrative Data, including Claims-based Measures
------------------------------------------------------------------------
Hospice Visits in the Last Days of Life (HVLDL)
Hospice Care Index (HCI):
1. Continuous Home Care (CHC) or General Inpatient (GIP) Provided
2. Gaps in Skilled Nursing Visits
3. Early Live Discharges
4. Late Live Discharges
5. Burdensome Transitions (Type 1)--Live Discharges from Hospice
Followed by Hospitalization and Subsequent Hospice Readmission
6. Burdensome Transitions (Type 2)--Live Discharges from Hospice
Followed by Hospitalization with the Patient Dying in the Hospital
7. Per-beneficiary Medicare Spending
8. Skilled Nursing Care Minutes per Routine Home Care (RHC) Day
9. Skilled Nursing Minutes on Weekends
10. Visits Near Death
------------------------------------------------------------------------
CAHPS Hospice Survey
------------------------------------------------------------------------
CAHPS Hospice Survey:
1. Communication with Family
2. Getting Timely Help
3. Treating Patient with Respect
4. Emotional and Spiritual Support
5. Help for Pain and Symptoms
6. Training Family to Care for Patient
7. Care Preferences
8. Rating of this Hospice
9. Willing to Recommend this Hospice
------------------------------------------------------------------------
2. Update on the Comprehensive Assessment at Admission Measure
We retained key items from the HIS in HOPE v1.0 and continue to
collect data to inform the Comprehensive Assessment at Admission (CBE
#3235) while gathering additional data to support new quality measures.
The Comprehensive Assessment Measure assesses the proportion of
patients for whom the hospice performed all seven care processes, as
applicable, at admission.
First endorsed by the National Quality Forum (NQF) in July 2017,
the measure was endorsed again by NQF in July 2021, and this measure
endorsement has been extended through Fall 2026 under the new CBE,
Battelle.
3. Update on Hospice Claims-Based Measures
In the FY 2022 Hospice Wage Index and Payment Rate Update final
rule (86 FR 42552), we finalized two new measures using claims data:
(1) Hospice Visits in the Last Days of Life (HVLDL); and (2) Hospice
Care Index (HCI).
Our measure selection activities for the HQRP take into
consideration input we receive from the CBE, as part of a pre-
rulemaking process that we have established and are required to follow
under section 1890A of the Act. The CBE convenes interested parties
from multiple groups to provide CMS with recommendations on the
Measures Under Consideration (MUC) list. This input informs how CMS
selects certain categories of quality and efficiency measures as
required by section 1890A(a)(3) of the Act. By February 1st of each
year, the CBE must provide that input to CMS. On July 26, 2022, the CBE
endorsed the claims-based HVLDL measure. More information can be found
on the HQRP Quality Measure Development web page at https://www.cms.gov/medicare/hospiceequality-reporting-program/quality-measure-development and the HQRP Current Measures web page at https://www.cms.gov/medicare/quality/hospice/current-measures. In November
2024, HVLDL was sent to the CBE advisory group for endorsement
extension. HVLDL was re-endorsed with conditions in February 2025 and
is endorsed through 2027. We are considering respecifying HCI, see the
Hospice Technical Expert Panel (TEP) and Caregiver Report on this web
page at https://www.cms.gov/medicare/quality/hospice/provider-and-stakeholder-engagement.
We received two public comments on the Hospice Claims-based
Measures. The following is a summary of the comments we received and
our responses.
Comment: A commenter urged CMS to re-evaluate HVLDL to evaluate
correlation of the measure with other disciplines and the new CAHPS
satisfaction surveys to allow time for provider and TEP engagement.
Another commenter encouraged CMS to revisit the HCI scoring methodology
to more accurately reflect the care provided by hospices.
Response: We thank commenters for their recommendations and will
take them into consideration as we consider the re-specification of HCI
and updates to HVLDL.
4. Update on the HOPE Instrument and Public Reporting and Future
Quality Measure (QM) Development
The HOPE assessment was developed as the new patient assessment
tool to replace the HIS as part of the HQRP. HOPE was finalized in the
FY 2025 Hospice Wage Index final rule (89 FR 64202) and once
implemented in FY 2026 (October 1, 2025), will provide value to hospice
providers, patients, and families. Additional information regarding
HOPE and its associated costs and burden can be found in the FY 2025
Paperwork Reduction Act of 1995 (PRA) submission (CMS-10390; OMB
Control Number: 0938-1153).
HOPE will provide assessment-based quality data to enhance the HQRP
[[Page 37422]]
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.
We encourage providers and vendors to visit the HOPE Technical
Information web page at https://www.cms.gov/medicare/quality/hospice-quality-reporting-program/hospice-outcomes-and-patient-evaluation-hope-technical-information for the latest updates and resources related to
HOPE data submission specifications and other technical information.
More detailed comprehensive training will be available on the HQRP
Training and Education Library web page linked previously in this
section.
As finalized in the FY 2025 Hospice Wage Index final rule (89 FR
64202), public reporting of the HOPE quality measures will be
implemented no earlier than FY 2028. Data collected by hospices during
the four quarters of CY 2026 (for example, Q 1, 2, 3 and 4 CY 2026)
will be analyzed starting in CY 2027. We will inform the public of the
decisions about whether CMS will report some or all of the quality
measures publicly based on the findings of analysis of the CY 2026 data
through future rulemaking. Providers will have the opportunity to
preview HOPE data before it is publicly reported, with the first HOPE-
based QM public reporting anticipated to be no earlier than November
2027 (FY 2028). Table 6 shows the anticipated schedule for HOPE public
reporting, should CMS decide that this information will be publicly
reported.
Table 6--Anticipated HOPE Public Education, Data Collection, and
Reporting
------------------------------------------------------------------------
Key event Time period
------------------------------------------------------------------------
Provider Trainings for HOPE Implementation. Spring/Summer 2025.
Data Collection Begins..................... October 1, 2025.
CY 2026 Data Analyzed to Assess Quality and Winter/Spring 2027.
Completeness.
Provider Preview Reports for HOPE Summer 2027.
Measure(s) Provided to Hospices *.
Public Reporting of HOPE Measure(s) Begins Fall 2027.
*.
------------------------------------------------------------------------
* These dates are subject to change based on the quality and
reportability of the data as determined based on CMS analyses; updates
will be provided in the FY 2027 Hospice Rule.
Lastly, as stated in the FY 2022 Hospice Wage Index final rule (86
FR 42528), we continue to consider developing hybrid quality measures
that could be calculated from multiple data sources, such as claims,
HOPE data, or other data sources (for example, CAHPS Hospice Survey).
We also intend to develop several quality measures based on information
collected by HOPE after HOPE is implemented. More information on
measure development can be found on the HQRP Quality Measure
Development web page at https://www.cms.gov/medicare/hospice-quality-reporting-program/quality-measure-development.
We received 30 public comments on the HOPE Instrument and Public
Reporting and Future Quality Measure (QM) Development. The following is
a summary of the comments we received and our responses.
Comment: Many commenters raised concerns about the transition from
HIS to the HOPE tool, slated to begin October 1, 2025. Commenters
expressed concerns about the lack of technical readiness among
providers and vendors due to some final technical specifications not
yet being released as of the publication of the proposed rule and only
one vendor call occurring in November 2024. Some commenters expressed
concern about additional financial burden and potential delays with the
transition to the new CMS submission and reporting system, which is set
to be implemented concurrently with the HOPE tool. To account for these
issues, many commenters suggested delaying HOPE implementation until 6
months after the final specifications and trainings have been released,
with a few suggesting delaying implementation by a year, and waiving
timeliness penalties for providers for the first two quarters of HOPE.
Some commenters also suggested phasing in penalties over the course of
HOPE implementation, up to three years, to allow time for providers to
adjust to HOPE. A few commenters were supportive of the transition to
HOPE and noted no concerns with the implementation timeline.
A few commenters requested additional updates to or clarifications
about HOPE, including that CMS consider allowing telehealth for HOPE,
requesting that CMS collect data on chaplain services using the
Healthcare Common Procedure Coding System (HCPCS) codes for chaplains,
and asking for clarification around Medicare Advantage payer source
coding.
Response: We appreciate interested parties' input regarding the
transition to the HOPE tool. In this final rule we have provided
updates as to where providers and vendors can find current information
about HOPE, including the HOPE Guidance Manual, HOPE Item Sets, and
Data Submission Specifications as well as training for HOPE
implementation. Although most HOPE items are derived from the original
HIS items, we recognize that providers will be acclimating to a new
tool and submission system as of October 1, 2025, and will take this
transition into consideration. For example, we will monitor the first
quarter of HOPE data collection (quarter 4 of 2025) and provide sub-
regulatory guidance on when public reporting of the two HOPE measures
will begin. We will closely monitor the first quarter of HOPE data and
expect providers to submit accurate and complete HOPE data beginning on
October 1, 2025. Regarding other suggestions about the HOPE instrument,
we will take them into consideration, and if modifications to the HOPE
instrument or HOPE implementation are made, we will propose them in
future rulemaking.
Regarding the comment about payer source coding, the intent of Item
A1400 is to identify all of the payers that the patient has regardless
of whether the payer is expected or likely to provide reimbursement
during the hospice stay. We are not changing this guidance for HOPE,
since it remains the same as long-standing HIS guidance.
Comment: Many commenters raised concerns about the HOPE burden
calculated in the finalized PRA package (CMS-10390; OMB Control Number:
0938-1153), noting that CMS used the median wage rather than the mean
wage and used 2022 Bureau of Labor Statistics (BLS) data \4\ rather
than more recent 2024 BLS data. Commenters also believe in-person
follow-up visits should be included in the estimated
[[Page 37423]]
burden. Due to these concerns, commenters felt CMS underestimated the
burden of the HOPE tool on providers.
---------------------------------------------------------------------------
\4\ May 2022 National Occupational Employment and Wage
Estimates, United States. https://www.bls.gov/oes/2022/may/oes_nat.htm.
---------------------------------------------------------------------------
Response: We thank commenters for their input regarding the HOPE
burden calculations. When this PRA package was finalized for HOPE (CMS-
10390; OMB Control Number: 0938-1153), no comments were received
regarding these concerns. However, when comparing the finalized burden
calculations using 2022 BLS Median wages, we find that using the 2022
BLS Mean wages instead would have resulted in a 9.5 percent increase in
the additional annual cost per hospice. If the data were updated using
the 2024 BLS Median wages, this would have resulted in a 15.3 percent
increase in the additional annual cost per hospice and using the 2024
BLS Mean wages would have resulted in 21.1 percent increase. We
recognize these differences may be significant for hospices and these
concerns will be taken into consideration in anticipation of the next
PRA package submission for the HOPE tool in 2026. We also understand
commenters' concerns about the potential staffing burdens of in-person
visits, but remind commenters that we selected this requirement based
on expert input regarding hospice best practices during the beta test
that noted these visits align with their usual practices (https://www.federalregister.gov/d/2024-16910/p-224).
5. Update on the Transition to iQIES
In the FY 2020 Hospice Wage Index and Payment Rate Update final
rule (84 FR 38484), we finalized migrating our systems for submitting
and processing assessment data and the reporting system. Hospices are
currently required to submit HIS data to CMS using the Quality
Improvement and Evaluation System (QIES) Assessment and the Submission
Processing (ASAP) system and obtain reports in the Certification and
Survey Provider Enhanced Reports (CASPER) system. The FY 2020 Hospice
Wage Index and Payment Rate Update final rule (84 FR 38484) finalized
the proposal to migrate to a new single CMS submission and reporting
system.
In the FY 2025 Hospice Wage Index and Payment Rate Update final
rule (86 FR 64202), we finalized the HOPE tool to replace the HIS as
part of the HQRP. Beginning on October 1, 2025, the new CMS submission
and reporting system will begin accepting the data from HOPE, in line
with the start of HOPE data collection. Provider reports will also be
available in this system beginning October 1, 2025. The QIES system
will stop accepting HIS records for hospice admissions and discharges
that occurred prior to October 1, 2025, including any corrections,
after February 15, 2026.
Although we did not propose the transition to the new CMS
submission and reporting system in the proposed rule, we received 13
public comments. The following is a summary of the comments we received
and our responses.
Comment: Commenters raised concerns about the feasibility of
transitioning hospice providers to the new CMS system due to historical
delays as other provider types transitioned into the new CMS system and
the intensive process needed to enroll providers and staff members. As
noted in the prior section, commenters also raised concerns around this
transition occurring alongside the transition to the HOPE tool,
creating additional burden for providers.
Response: We appreciate commenters' input regarding the transition
to the new CMS submission and reporting system. We note that while
providers and vendors will be submitting HOPE data to a new CMS system
on October 1, 2025, we expect hospice providers to onboard successfully
and as planned, as has occurred with the assessment submission and
reporting migrations for other provider types. The submission process
will be similar to the process for submitting data to QIES. In
addition, we will provide a similar set of provider, APU, and QM
reports to enable providers to monitor their data submissions.
We note that although there is a different enrollment process for
the new CMS submission and reporting system, there are several benefits
to the new system that are intended to provide a more streamlined user
experience. The new system is web-based and accessible with a single
login for submitting HOPE data and accessing HOPE-related reports,
replacing the current two-step process that requires two different
login credentials. In addition, the new system enables a provider to
have unlimited users able to submit HOPE data and access reports, with
user access managed internally by a provider's designated security
official, which is designed to promote timely data submission and
support APU compliance.
In this final rule we have provided updates as to where providers
and vendors can find additional information about this transition.
Providers and vendors should visit the HOPE Technical Information web
page at https://www.cms.gov/medicare/quality/hospice-quality-reporting-program/hospice-outcomes-and-patient-evaluation-hope-technical-information for the latest updates and resources related to HOPE data
submission specifications, including the final Hospice Outcomes and
Patient Evaluation (HOPE) data submission specifications (V1.00.1) and
other technical information. As noted in this final rule, providers
must have access to iQIES by October 1, 2025, to submit HOPE
assessments and the QIES system will no longer accept HIS records after
February 15, 2026. Additional questions about the transition to iQIES
can be addressed to the iQIES Help Desk at [email protected].
6. Form, Manner, and Timing of Quality Measure Data Submission
a. Statutory Penalty for Failure To Report
Section 1814(i)(5)(C) of the Act requires that each hospice submit
data to the Secretary on quality measures specified by the Secretary.
The data must be submitted in a form and manner, and at a time
specified by the Secretary. Section 1814(i)(5)(A)(i) of the Act was
amended by the CAA, 2021 and the payment reduction for failing to meet
hospice quality reporting requirements was increased from 2 percent to
4 percent beginning with FY 2024. During FYs 2014 through 2023, the
Secretary reduced the market basket update by 2 percentage points for
non-compliance. Beginning in FY 2024 and for each subsequent year, the
Secretary will reduce the market basket update by 4 percentage points
for any hospice that does not comply with the quality measure data
submission requirements for that FY. In the FY 2023 Hospice Wage Index
final rule (87 FR 45669), we revised our regulations at Sec.
418.306(b)(2) in accordance with this statutory change.
b. Compliance
HQRP Compliance requires understanding the different timeframes for
both HIS (or HOPE, once implemented) and CAHPS: The relevant Reporting
Year, the payment FY, and the Reference Year.
The ``Reporting Year''' (HIS or HOPE) or ``Data Collection
Year''' (CAHPS) is based on the calendar year (CY). It is the same CY
for both HIS (or HOPE, once it is implemented) and CAHPS. If the CAHPS
Data Collection year is CY 2025, then the HIS (or HOPE) reporting year
is also CY 2025.
In the ``Payment FY'', the APU is subsequently applied to
FY payments based on compliance in the
[[Page 37424]]
corresponding Reporting Year/Data Collection Year.
For the CAHPS Hospice Survey, the Reference Year is the CY
before the Data Collection Year. The Reference Year applies to hospices
submitting a size exemption from the CAHPS survey (there is no similar
exemption for HIS or HOPE).\5\ For example, for the CY 2025 data
collection year, the Reference Year is CY 2024. This means providers
seeking a size exemption for CAHPS in CY 2025 will base it on their
hospice size in CY 2024.
---------------------------------------------------------------------------
\5\ CAHPS Hospice Survey, Participation Exemption for Size.
https://www.hospicecahpssurvey.org/en/participation-exemption-for-size/.
---------------------------------------------------------------------------
Submission requirements are codified at Sec. 418.312. Table 7
summarizes the three timeframes. It illustrates how the CY interacts
with the FY payments, covering the CY 2023 through CY 2026 data
collection periods and the corresponding APU application from FY 2025
through FY 2028. Please note that during the first reporting year that
implements HOPE, APUs may be based on fewer than four quarters of data.
We will provide additional subregulatory guidance regarding APUs for
the HOPE implementation year.
Table 7--HQRP Reporting Requirements and Corresponding Annual Payments
Updates
------------------------------------------------------------------------
Annual payment Reference year for
Reporting year for HIS/HOPE and update impacts CAHPS size
data collection year for CAHPS payments for the exemption (CAHPS
data (calendar year) FY only)
------------------------------------------------------------------------
CY 2024......................... FY 2026 APU....... CY 2023.
CY 2025......................... FY 2027 APU....... CY 2024.
CY 2026......................... FY 2028 APU....... CY 2025.
CY 2027......................... FY 2029 APU....... CY 2026.
------------------------------------------------------------------------
As illustrated in Table 7, CY 2024 data submissions compliance
impacts the FY 2026 APU. CY 2025 data submissions compliance impacts
the FY 2027 APU. CY 2026 data submissions compliance impacts FY 2028
APU. This CY data submission impacting FY APU pattern follows for
subsequent years.
c. Submission of Data Requirements
As finalized in the FY 2016 Hospice Wage Index final rule (80 FR
47142, 47192), hospices' compliance with HIS requirements beginning
with the FY 2020 APU determination (that is, based on HIS Admission and
Discharge records submitted in CY 2018) are based on a timeliness
threshold of 90 percent. This means CMS requires that hospices submit
90 percent of all required HIS records within 30 days of the event
(that is, patient's admission or discharge). The 90-percent threshold
is hereafter referred to as the timeliness compliance threshold. Ninety
percent of all required HIS records must be submitted and accepted
within the 30-day submission deadline to avoid the statutorily mandated
payment penalty.
We will apply the same submission requirements for HOPE admission,
discharge, and up to two hospice update visit (HUV) records. After HIS
is phased out, hospices will continue to be required to submit 90
percent of all required HOPE records to support the quality measures
within 30 days of the event or completion date (patient's admission,
discharge, and based on the patient's length of stay up to two HUV
timepoints).
Hospice compliance with claims data requirements is based on
administrative data collection. Since Medicare claims data are already
collected from claims, hospices are considered 100 percent compliant
with the submission of these data for the HQRP. There is no additional
submission requirement for administrative data.
To comply with CMS' quality reporting requirements for CAHPS,
hospices are required to collect data monthly using the CAHPS Hospice
Survey. Hospices comply by utilizing a CMS-approved third-party vendor.
Approved Hospice CAHPS vendors must successfully submit data on the
hospice's behalf to the CAHPS Hospice Survey Data Center. A list of the
approved vendors can be found on the CAHPS Hospice Survey website at
https://www.hospicecahpssurvey.org.
Table 8 HQRP Compliance Checklist illustrates the APU and
timeliness threshold requirements.
Table 8--HQRP Compliance Checklist
------------------------------------------------------------------------
Annual payment update HIS/HOPE CAHPS
------------------------------------------------------------------------
FY 2026....................... Submit at least 90 Ongoing monthly
percent of all HIS participation
records within 30 in the Hospice
days of the event CAHPS survey 1/
date (for example, 1/2024-12/31/
patient's admission 2024.
or discharge) for
patient admissions/
discharges occurring
1/1/24-12/31/24.
FY 2027....................... Submit at least 90 Ongoing monthly
percent of all HIS/ participation
HOPE records within in the Hospice
30 days of the event CAHPS survey 1/
date (for example, 1/2025-12/31/
patient's admission 2025.
or discharge) for
patient admissions/
discharges occurring
1/1/25-12/31/25.
FY 2028....................... Submit at least 90 Ongoing monthly
percent of all HOPE participation
records within 30 in the Hospice
days of the event or CAHPS survey 1/
completion date (for 1/2026-12/31/
example, patient's 2026.
admission date, HUV
completion date or
discharge date) for
patient admissions/
discharges occurring
1/1/26-12/31/26.
[[Page 37425]]
FY 2029....................... Submit at least 90 Ongoing monthly
percent of all HOPE participation
records within 30 in the Hospice
days of the event CAHPS survey 1/
date (for example, 1/2028-12/31/
patient's admission 2027.
date, HUV completion
date or discharge
date) for patient
admissions/discharges
occurring 1/1/27-12/
31-2027.
------------------------------------------------------------------------
Note: The data source for the claims-based measures will be Medicare
claims data that are already collected and submitted to CMS. There is
no additional submission requirement for administrative data (Medicare
claims), and hospices with claims data are 100-percent compliant with
this requirement.
Most hospices that fail to meet HQRP requirements do so because
they miss the 90 percent threshold. We offer many trainings and
educational opportunities through our websites, which are available 24/
7, 365 days per year, to enable hospice staff to learn at the pace and
time of their choice. We want hospices to be successful with meeting
the HQRP requirements. We encourage hospices to visit the frequently-
updated HQRP website at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting.
Available trainings can be found on the HQRP Training and Education
Library web page at https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/Hospice-Quality-Reporting/Hospice-Quality-Reporting-Training-Training-and-Education-Library and
additional resources are located on the Requirements and Best Practices
web page at https://www.cms.gov/medicare/quality/hospice/hqrp-requirements-and-best-practices. We also encourage readers to stay
informed about HQRP by visiting the HQRP Provider and Stakeholder
Engagement web page at https://www.cms.gov/medicare/quality/hospice/provider-and-stakeholder-engagement to sign-up for the Hospice Quality
Listserv.
7. Revision to Sec. 418.312(j)(2) To Correct Regulatory Text
We proposed to revise the regulatory text at Sec. 418.312(j)(2) to
correct a reference to another part of the regulations. Specifically,
we proposed replacing a reference to Sec. 412.306(b)(2) with the
correct reference to Sec. 418.306(b)(2).
We received a comment in support of this proposal to revise Sec.
418.312(j)(2) and we are finalizing as proposed.
IV. Waiver of Proposed Rulemaking
Under 5 U.S.C. 553(b) of the Administrative Procedure Act (APA),
the agency is required to publish a notice of the proposed rule in the
Federal Register before the provisions of a rule take effect.
Specifically, 5 U.S.C. 553 requires the agency to publish a notice of
the proposed rule in the Federal Register that includes a reference to
the legal authority under which the rule is proposed, and the terms and
substance of the proposed rule or a description of the subjects and
issues involved. Similarly, section 1871(b)(1) of the Act requires the
Secretary to provide for notice of the proposed rule in the Federal
Register and provide a period of not less than 60 days for public
comment for rulemaking to carry out the administration of the Medicare
program under title XVIII of the Act. Sections 553(b)(B) and 553(d)(3)
of the APA provide for exceptions from the notice and comment and delay
in effective date APA requirements. In cases in which these exceptions
apply, sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the Act also
provide exceptions from the notice and 60-day comment period and delay
in effective date requirements of the Act. In this final rule, we are
not waiving the delay in effective date of the finalized provisions,
but rather we are exercising the waiver of notice and comment
rulemaking for the provisions summarized in this section. Section
553(b)(B) of the APA and section 1871(b)(2)(C) of the Act authorize an
agency to dispense with normal rulemaking requirements for good cause
if the agency makes a finding that the notice and comment process are
impracticable, unnecessary, or contrary to the public interest.
Here, we are making two technical changes to the regulations for
which there is good cause to waive notice and comment rulemaking.
First, we are making a technical change to Sec. 418.22(a)(4)(ii)
that was not proposed to align the regulation with its underlying
statute. We believe that there is good cause to waive advance notice
and comment because public participation is unnecessary for this
technical change that will conform the regulatory text at Sec.
418.22(a)(4)(ii) with its underlying statute, that is, section
1814(a)(7)(D)(i)(II) of the Act. Section 2207(f) of the Full-Year
Continuing Appropriations and Extensions Act, 2025 (Pub L. 119-4)
amended section 1814(a)(7)(D)(i)(II) of the Act to extend the use of
telehealth by a hospice physician or hospice nurse practitioner to
conduct a face-to-face encounter for the sole purpose of hospice
recertification through September 30, 2025. However, the regulation at
Sec. 418.22(a)(4)(ii) continued to use ``December 31, 2024'' instead
of ``September 30, 2025'' because we inadvertently omitted this date
change in the proposed rule underlying Sec. 418.22(a)(4)(ii). Given
that this final rule simply conforms the regulation with its
implementing statute, notice-and-comment rulemaking is unnecessary, and
thus there is good cause to waive such rulemaking.
Second, as discussed in the comments and responses in section
III.A.1.c. of this final rule, we are including in the FY 2026 hospice
wage index the wage indexes for the Northern Mariana Islands and
American Samoa using our established methodology for rural areas with
no hospitals. The Northern Mariana Islands and American Samoa are rural
areas with no hospital data from which a wage index can be calculated.
Consistent with our established methodology, we compute an appropriate
wage index for rural areas with no hospital using the average wage
index values from contiguous CBSAs to represent a reasonable proxy. We
believe that CBSA 99965 (Guam) represents a reasonable proxy because
the islands are located within the Pacific Rim and share a common
status of US territories. While Guam does not share a land border with
either the Northern Mariana Islands or American Samoa, we believe that
Guam's wage index is a reasonable proxy for the wage indexes of
American Samoa and the Northern Mariana Islands under our contiguous
CBSA policy given that those two territories cannot share a land border
with other CBSAs. Therefore, hospices that provide services in the
Northern Mariana Islands and American Samoa should use CBSA 99965
(Guam) and should receive the wage index
[[Page 37426]]
assigned to CBSA 99965 (Guam) of 0.9611.
While CMS believes that notice-and-comment rulemaking is not
required for the addition of the wage indexes for the Northern Mariana
Islands and American Samoa, were it required, there is good cause to
waive such rulemaking as unnecessary. Notice-and-comment rulemaking is
unnecessary because CMS is applying the existing methodology, that is,
calculating the wage index of a rural area without a hospital based on
the wage indexes of contiguous CBSAs, to the circumstances of the
Northern Mariana Islands and American Samoa, and those two territories
have historically and are currently receiving payment using Guam's wage
index. As CMS is not altering a current wage index calculation
methodology, there is good cause to waive notice and comment rulemaking
to finalize the addition of the Northern Mariana Islands and American
Samoa to the FY 2026 hospice wage index.
V. Collection of Information Requirements
In the proposed rule we noted that this rule, if finalized, would
revise the attestation requirements at Sec. 418.22(b)(4) to better
align with the original intent of the statutory requirements under
section 1814(a)(7) of the Act and CY 2011 HH PPS final rule for the
certification of terminal illness regulations to include the
physician's or nurse practitioner's signature and the date of the
signature on each face-to-face encounter attestation. These underlying
attestation requirements are collections of information that require
approval under the PRA and were previously approved in the ICR for the
Hospice Conditions of Participation (OMB Control Number 0938-1067).
However, the revisions we proposed were minor and would not
substantively change the scope of the attestation requirement or the
burden that it would entail and thus do not require any additional
approval that would go beyond the coverage provided by 0938-1067.
We received public comments on the attestation requirements
regarding collection of information requirements, which are summarized
in section III.C. of this final rule, stating that implementation of
some of the proposed regulatory language would increase provider
documentation and administrative burden. Therefore, we are finalizing
only the proposed signature and date requirement of the attestation
(which would not substantively change the scope of the attestation
requirement) and not finalizing the proposed language stating that the
attestation must be a separate and distinct section of, or an addendum
to, the recertification form, and must be clearly titled. This language
accounted for the part of the proposal that commenters stated would
increase provider burden. Additionally, we clarified that if the signed
and dated face-to-face encounter clinical note is included in the
medical record, this could substitute for a signed and dated
attestation, with the belief that this will further decrease
administrative burden.
We are seeking approval from OMB to reinstate Control Number 0938-
1067 separately from this rulemaking via the standard PRA process. The
revisions to the attestation requirements that are being finalized in
this rule will take effect once OMB approves the reinstatement.
VI. Regulatory Impact Analysis
A. Statement of Need
1. Hospice Payment
This final rule meets the requirements of our regulations at Sec.
418.306(c) and (d), which require annual issuance, in the Federal
Register, of the Hospice Wage Index based on the most current available
CMS hospital wage data, including any changes to the definitions of
CBSAs or previously used Metropolitan Statistical Areas (MSAs), as well
as any changes to the methodology for determining the per diem payment
rates. This final rule updates the payment rates for each of the
categories of hospice care, described in Sec. 418.302(b), for FY 2026
as required under section 1814(i)(1)(C)(ii)(VII) of the Act. The
payment rate updates are subject to changes in economy-wide
productivity as specified in section 1886(b)(3)(B)(xi)(II) of the Act.
B. Overall Impact
We have examined the impacts of this rule as required by Executive
Order 12866, ``Regulatory Planning and Review''; Executive Order 13132,
``Federalism''; Executive Order 13563, ``Improving Regulation and
Regulatory Review''; Executive Order 14192, ``Unleashing Prosperity
Through Deregulation''; the Regulatory Flexibility Act (RFA) (Pub. L.
96-354); section 1102(b) of the Social Security Act; and section 202 of
the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4); and the
Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select those regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety, and other advantages; and distributive
impacts). Section 3(f) of Executive Order 12866 defines a ``significant
regulatory action'' as any regulatory action that is likely to result
in a rule that may: (1) have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities; (2) create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency;
(3) materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or (4) raise novel legal or policy issues arising out of legal
mandates, or the President's priorities.
A regulatory impact analysis (RIA) must be prepared for a
regulatory action that is significant under section 3(f)(1) of E.O.
12866. Based on our estimates, OMB's Office of Information and
Regulatory Affairs has determined this rulemaking is significant per
section 3(f)(1) of E.O. 12866. Accordingly, we have prepared a
regulatory impact analysis that presents the costs and benefits of the
rulemaking to the best of our ability. Furthermore, pursuant to
Subtitle E of the Small Business Regulatory Enforcement Fairness Act of
1996 (also known as the Congressional Review Act), OIRA has determined
that this rule meets the criteria set forth in 5 U.S.C. 804(2).
Therefore, OMB has reviewed this final rule and the Department has
provided the following assessment of its impact.
1. Hospice Payment
We estimate that the aggregate impact of the payment provisions in
this final rule will result in an estimated increase of $750 million in
payments to hospices, resulting from the final hospice payment update
percentage of 2.6 percent for FY 2026. The impact analysis of this
final rule represents the projected effects of the changes in hospice
payments from FY 2025 to FY 2026. Using the most recent complete data
available at the time of rulemaking, in this case FY 2024 hospice
claims data as of May 9, 2025, we simulate total payments using the FY
2025 wage index (pre-floor, pre-reclassified hospital wage index with
the hospice floor, and the 5 percent cap on wage index decreases) and
FY 2025 payment rates and compare it to our simulation of total
payments using FY 2024 utilization claims data, the final FY 2026
Hospice Wage Index (pre-floor, pre-reclassified
[[Page 37427]]
hospital wage index with hospice floor, and the 5 percent cap on wage
index decreases) and FY 2025 payment rates. By dividing payments for
each level of care (RHC days 1 through 60, RHC days 61+, CHC, IRC, and
GIP) using the FY 2025 wage index and payment rates for each level of
care by the FY 2026 wage index and FY 2025 payment rates, we obtain a
wage index standardization factor for each level of care. We apply the
wage index standardization factors so that the aggregate simulated
payments do not increase or decrease due to changes in the wage index.
Certain events may limit the scope or accuracy of our impact
analysis, because such an analysis is susceptible to forecasting errors
due to other changes in the forecasted impact time-period. The nature
of the Medicare program is such that the changes may interact, and the
complexity of the interaction of these changes could make it difficult
to predict accurately the full scope of the impact upon hospices.
2. Hospice Quality Reporting Program
There were no new proposals related to the Hospice Quality
Reporting Program for FY 2026; accordingly, there are no impacts.
C. Detailed Economic Analysis
1. Final Hospice Payment Update for FY 2026
The FY 2026 hospice payment impacts appear in Table 9. We tabulate
the resulting payments according to the classifications (for example,
provider type, geographic region, facility size), and compare the
difference between current and future payments to determine the overall
impact. The first column shows the breakdown of all hospices by
provider type and control (non-profit, for-profit, government, other),
facility location, and facility size. The second column shows the
number of hospices in each of the categories in the first column. The
third column shows the effect of using the FY 2026 updated wage index
data with a 5 percent cap on wage index decreases. The aggregate impact
of the change in column three is zero percent, due to the hospice wage
index standardization factors. However, there are distributional
effects of using the FY 2026 hospice wage index. The fourth column
shows the effect of the hospice payment update percentage as mandated
by section 1814(i)(1)(C) of the Act and is consistent for all
providers. The hospice payment update percentage of 2.6 percent is
based on the final 3.3 percent inpatient hospital market basket
percentage increase reduced by a 0.7 percentage point productivity
adjustment. The fifth column shows the total effect of the updated wage
data and the hospice payment update percentage on FY 2026 hospice
payments. As illustrated in Table 9, the combined effects vary by
specific types of providers and by location. We note that simulated
payments are based on utilization in FY 2024 as seen on Medicare
hospice claims (accessed from the CCW on May 9, 2025) and only include
payments related to the level of care and do not include payments
related to the service intensity add-on.
As illustrated in Table 9, the combined effects vary by specific
types of providers and by location.
Table 9--Impact to Hospices for FY 2026
----------------------------------------------------------------------------------------------------------------
FY 2026 hospice Overall total
Hospice subgroup Hospices FY 2026 updated payment update impact for FY
wage data (%) (2.6%) 2026 (%)
----------------------------------------------------------------------------------------------------------------
All Hospices........................ 6,735 0.0 2.6 2.6
Hospice Type and Control:
Freestanding/Non-Profit......... 791 0.2 2.6 2.8
Freestanding/For-Profit......... 4,654 -0.1 2.6 2.5
Freestanding/Government......... 34 0.9 2.6 3.5
Freestanding/Other.............. 0 0.0 2.6 2.6
Facility/HHA Based/Non-Profit... 266 0.6 2.6 3.2
Facility/HHA Based/For-Profit... 4 0.3 2.6 2.9
Facility/HHA Based/Government... 97 0.5 2.6 3.1
Facility/HHA Based/Other............ 0 0.0 2.6 2.6
---------------------------------------------------------------------------
Subtotal: Freestanding 5,479 0.0 2.6 2.6
Facility Type..............
---------------------------------------------------------------------------
Subtotal: Facility/HHA Based 367 0.6 2.6 3.2
Facility Type..............
---------------------------------------------------------------------------
Subtotal: Non-Profit.... 1,067 0.3 2.6 2.9
---------------------------------------------------------------------------
Subtotal: For Profit.... 5,131 -0.1 2.6 2.5
---------------------------------------------------------------------------
Subtotal: Government.... 132 0.7 2.6 3.3
---------------------------------------------------------------------------
Subtotal: Other......... 12 0.6 2.6 3.2
---------------------------------------------------------------------------
Hospice Type and Control: Rural:
Freestanding/Non-Profit......... 206 0.5 2.6 3.1
Freestanding/For-Profit......... 392 0.3 2.6 2.9
Freestanding/Government......... 24 0.8 2.6 3.4
Freestanding/Other.............. 0 0.0 2.6 2.6
Facility/HHA Based/Non-Profit... 112 1.2 2.6 3.8
Facility/HHA Based/For-Profit... 0 0.0 2.6 2.6
Facility/HHA Based/Government... 71 0.1 2.6 2.7
Facility/HHA Based/Other........ 0 0.0 2.6 2.6
Hospice Type and Control: Urban:
Freestanding/Non-Profit......... 585 0.2 2.6 2.8
Freestanding/For-Profit......... 4,262 -0.2 2.6 2.4
Freestanding/Government......... 10 1.0 2.6 3.6
[[Page 37428]]
Freestanding/Other.............. 0 0.0 2.6 2.6
Facility/HHA Based/Non-Profit... 154 0.5 2.6 3.1
Facility/HHA Based/For-Profit... 4 0.3 2.6 2.9
Facility/HHA Based/Government... 26 0.7 2.6 3.3
Facility/HHA Based/Other........ 0 0.0 2.6 2.6
Hospice Location: Urban or Rural:
Rural........................... 849 0.4 2.6 3.0
Urban........................... 5,886 0.0 2.6 2.6
Hospice Location: Region of the
Country (Census Division):
New England..................... 159 1.3 2.6 3.9
Middle Atlantic................. 280 0.1 2.6 2.7
South Atlantic.................. 650 0.4 2.6 3.0
East North Central.............. 654 0.4 2.6 3.0
East South Central.............. 252 0.3 2.6 2.9
West North Central.............. 441 0.8 2.6 3.4
West South Central.............. 1,251 -0.5 2.6 2.1
Mountain........................ 701 0.2 2.6 2.8
Pacific......................... 2,270 -1.1 2.6 1.5
Outlying........................ 77 -0.4 2.6 2.2
Hospice Size (RHC Days):
0-3,499 RHC Days................ 1,751 -0.8 2.6 1.8
3,500-19,999 RHC Days........... 3,014 -0.4 2.6 2.2
20,000+ RHC Days................ 1,970 0.1 2.6 2.7
----------------------------------------------------------------------------------------------------------------
Source: FY 2024 hospice claims data from CCW accessed on May 9, 2025.
Note: The overall total impact reflects the addition of the individual impacts, which includes the wage index
impact as well as the hospice payment update of 2.6 percent.
Due to missing Provider of Services file and Cost Report information (from which hospice characteristics are
obtained), some subcategories in the impact tables have fewer agencies represented than the overall total (of
6,735). Subtypes involving ownership only add up to 6,342 while subtypes involving facility type only add up
to 5,846.
Region Key:
New England=Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont.
Middle Atlantic=Pennsylvania, New Jersey, New York.
South Atlantic=Delaware, District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina,
Virginia, West Virginia.
East North Central=Illinois, Indiana, Michigan, Ohio, Wisconsin.
East South Central=Alabama, Kentucky, Mississippi, Tennessee.
West North Central=Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota.
West South Central=Arkansas, Louisiana, Oklahoma, Texas.
Mountain=Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah, Wyoming.
Pacific=Alaska, California, Hawaii, Oregon, Washington.
Outlying=Guam, Puerto Rico, Virgin Islands.
We received a comment on the detailed economic analysis and impact
table. A summary of this comment and our response follows:
Comment: A commenter recommended enhanced data transparency
regarding the files used to categorize hospice provider types by
ownership and facility type in the FY 2026 hospice impact table. This
commenter requested further information about the differences in the
two files used to source this data and stated that CMS must be
transparent about this measure.
Response: Ownership and facility type have typically been sourced
from the provider of services (POS) file (https://data.cms.gov/resources/pos-file-iqies-for-hha-asc-and-hospice-providers-methodology). In recent years, ownership and facility type have
increasingly been missing from the POS. Starting with the FY 2026
proposed rule, we also incorporated cost report data. We first assign
ownership and facility type using information from the cost reports.
Then, if there is missing data, we use the POS data to determine
ownership and facility type. This improved our ability to assign
ownership and facility type, with 6,305 hospices having ownership type
information and 5,788 having facility type information. We encourage
all hospices to review their POS and cost report data to ensure
information on ownership and facility type are available and accurate.
Missing information on ownership or facility type only impacts the rows
of the impact table that are associated with ownership or facility
type. Other calculations throughout the rule are not impacted by
missing data on ownership or facility type.
D. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this final rule, we
should estimate the cost associated with the regulatory review. Due to
the uncertainty involved with accurately quantifying the number of
entities that will review the rule, we assume that the total number of
unique commenters on this year's proposed rule will be the number of
reviewers of this final rule. However, we acknowledge that this
assumption may understate or overstate the costs of reviewing this
final rule. It is possible that not all commenters reviewed this year's
proposed rule in detail, and it is also possible that some reviewers
chose not to comment on the proposed rule. Despite these limitations,
we believe that the number of commenters on this year's proposed rule
is a fair estimate of the number of reviewers of this final rule. We
received no comments on the approach to estimating the number of
entities that will review this final rule. We also recognize that
different types of
[[Page 37429]]
entities are in many cases affected by mutually exclusive sections of
this final rule, and therefore for the purposes of our estimate we
assume that each reviewer reads approximately 50 percent of the rule.
Using the May 2024 National median hourly wage rate (doubled for
benefits and overhead) for medical and health service managers (Code
11-9111); we estimate that the cost of reviewing this rule is $113.42
per hour, including overhead and fringe benefits (https://www.bls.gov/oes/current/oes_nat.htm). Assuming an average reading speed we estimate
that it would take approximately 1.76 hours for staff to review half of
this final rule. For each hospice that reviews the rule, the estimated
cost is $199.62 (1.76 hours x $113.42). Therefore, we estimate that the
total cost of reviewing this regulation is $11,977.20 ($199.62 x 60
reviewers; which is based on the number of comments received for the
proposed rule).
E. Alternatives Considered
1. Hospice Payment
Since the hospice payment update percentage is determined based on
statutory requirements, we did not consider alternatives to updating
the hospice payment rates by the hospice payment update percentage. The
final 2.6 percent hospice payment update percentage for FY 2026 is
based on a final 3.3 percent inpatient hospital market basket
percentage increase for FY 2026, reduced by a final 0.7 percentage
point productivity adjustment. Payment rates since FY 2002 have been
updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, which
states that the update to the payment rates for subsequent years must
be the market basket percentage increase for that fiscal year. Section
3401(g) of the Affordable Care Act also mandates that, starting with FY
2013 (and in subsequent years), the hospice payment update percentage
will be annually reduced by changes in economy-wide productivity as
specified in section 1886(b)(3)(B)(xi)(II) of the Act. For FY 2026,
since the hospice payment update percentage is determined based on
statutory requirements at section 1814(i)(1)(C) of the Act, we did not
consider alternatives for the hospice payment update percentage.
F. Accounting Statement and Table
Consistent with OMB Circular A-4 (available at https://trumpwhitehouse.archives.gov/sites/whitehouse.gov/files/omb/circulars/A4/a-4.pdf), we have prepared an accounting statement in Table 10
showing the classification of the expenditures associated with the
provisions of this final rule. Table 10 provides our best estimate of
the possible changes in Medicare payments under the hospice benefit as
a result of the policies in this final rule. This estimate is based on
the data for 6,735 hospices in our impact analysis file, which was
constructed using FY 2024 claims (accessed from the CCW on May 9,
2025). All expenditures are classified as transfers to hospices.
Table 10--Accounting Statement Classification of Estimated Transfers to
Medicare Hospices
------------------------------------------------------------------------
Hospice payment update FY 2025 to FY 2026
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $750 million \*\.
From Whom to Whom?........................ Federal Government to
Medicare Hospices.
------------------------------------------------------------------------
* The increase of $750 million in transfer payments is a result of the
2.6 percent hospice payment update compared to payments in FY 2025.
G. Regulatory Flexibility Act (RFA)
The RFA requires agencies to analyze options for regulatory relief
of small entities if a rule has a significant impact on a substantial
number of small entities. For purposes of the RFA, small entities
include small businesses, nonprofit organizations, and small
jurisdictions. We consider all hospices as small entities as that term
is used in the RFA. The North American Industry Classification System
(NAICS) was adopted in 1997 and is the current standard used by the
Federal statistical agencies related to the U.S. business economy.
There is no NAICS code specific to hospice services. Therefore, we
utilized the NAICS U.S. industry title ``Home Health Care Services''
and corresponding NAICS code 621610 in determining impacts for small
entities. The NAICS code 621610 has a size standard of $19 million.\6\
Table 11 shows the number of firms, revenue, and estimated impact per
home health care service category.
---------------------------------------------------------------------------
\6\ https://www.sba.gov/sites/sbagov/files/2023-03/Table%20of%20Size%20Standards_Effective%20March%2017%2C%202023%20%281%29%20%281%29_0.pdf.
Table 11--Number of Firms, Revenue, and Average Revenue per Firm of Home Health Care Services for NAICS Code 621610
--------------------------------------------------------------------------------------------------------------------------------------------------------
Enterprise size Average receipts
NAICS NAICS description ($1,000) Number of firms Receipts ($1,000) per firm ($1,000)
--------------------------------------------------------------------------------------------------------------------------------------------------------
621610............................. Home Health Care Services.............. <100 6,361 232,967 36.62
621610............................. Home Health Care Services.............. 100-499 7,099 1,869,713 263.38
621610............................. Home Health Care Services.............. 500-999 3,866 2,829,374 731.86
621610............................. Home Health Care Services.............. 1,000-2,499 5,218 8,370,496 1,604.16
621610............................. Home Health Care Services.............. 2,500-4,999 2,560 8,833,076 3,450.42
621610............................. Home Health Care Services.............. 5,000-7,499 885 5,275,636 5,961.17
621610............................. Home Health Care Services.............. 7,500-9,999 450 3,789,016 8,420.04
621610............................. Home Health Care Services.............. 10,000-14,999 466 5,256,982 11,281.08
621610............................. Home Health Care Services.............. 15,000-19,999 235 3,621,448 15,410.42
621610............................. Home Health Care Services.............. >20,000 1,058 73,271,709 69,254.92
621610............................. Home Health Care Services.............. Total 28,198 113,350,417 4,019.80
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Data obtained from United States Census Bureau table ``us_6digitnaics_rcptsize_2022'' (SOURCE: 2022 SUSB Annual Data Tables by Establishment
Industry) Release Date: 4/10/2025: https://www2.census.gov/programs-surveys/susb/tables/2022/us_6digitnaics_rcptsize_2022.xlsx.
[[Page 37430]]
Notes: The `Average Receipts Per Firm' column is calculated as the Receipts ($1,000)/Number of firms. The `Total' row represents all the home health
care services firms under NAICS 621610. Overall receipts (revenue) for the 28,198 firms (NAICS 621610) are approximately $113 billion.
The Department of Health and Human Services' practice in
interpreting the RFA is to consider effects economically
``significant'' only if greater than 5 percent of providers reach a
threshold of 3 to 5 percent or more of total revenue or total costs.
The majority of hospice visits are Medicare paid visits, and therefore
the majority of hospice agency revenue consists of Medicare payments.
Based on our analysis, we conclude that the policies finalized in this
rule will result in an estimated total impact of 3 to 5 percent or more
on Medicare revenue for greater than 5 percent of hospices. Therefore,
the Secretary has determined that this hospice final rule will have
significant economic impact resulting in a net increase in positive
revenue on a substantial number of small entities. We estimate that the
net impact of the policies in this rule is 2.6 percent or approximately
$750 million in increased revenue to hospices in FY 2026. The 2.6
percent increase in expenditures when comparing FY 2025 payments to
estimated FY 2026 payments is reflected in the last column of the first
row in Table 9 and is driven solely by the impact of the hospice
payment update percentage reflected in the fourth column of the impact
table. In addition, hospices with less than 3,500 RHC days will
experience a lower estimated increase (1.8 percent), compared to
hospices with 3,500-19,999 RHC days (2.2 percent) and hospices with
greater than 20,000 RHC days (2.7 percent) due to the final updated
wage index. We estimate that in FY 2026, hospices in urban areas would
experience, on average, a 2.6 percent increase in estimated payments
compared to FY 2025; while hospices in rural areas would experience, on
average, a 3.0 percent increase in estimated payments compared to FY
2025. Hospices providing services in the New England region would
experience the largest estimated increases in payments of 3.9 percent.
Hospices serving patients in the Pacific region will experience, on
average, the lowest estimated increase of 1.5 percent in FY 2026
payments. Further detail is presented in Table 9 by hospice type and
location. The analysis in this section along with the rest of the
regulatory impact analysis in this final rule constitutes our final
regulatory flexibility analysis. We did not receive any comments on our
proposed cost analysis.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of an MSA and has fewer
than 100 beds. As this rule will only affect hospices, the Secretary
has determined that this rule will not have a significant impact on the
operations of a substantial number of small rural hospitals (see Table
9).
H. Unfunded Mandates Reform Act (UMRA)
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2025, that
threshold is approximately $187 million. This rule will not have an
unfunded effect on state, local, or tribal governments, in the
aggregate, or on the private sector that exceeds this threshold in any
1 year.
I. Federalism
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. We have reviewed this rule under these criteria of
Executive Order 13132 and have determined that it will not impose
substantial direct costs on State or local governments.
J. E.O. 14192, ``Unleashing Prosperity Through Deregulation''
Executive Order 14192, entitled ``Unleashing Prosperity Through
Deregulation'' was issued on January 31, 2025, and requires that ``any
new incremental costs associated with new regulations shall, to the
extent permitted by law, be offset by the elimination of existing costs
associated with at least 10 prior regulations.'' Therefore, this final
rule is not an E.O. 14192 regulatory action since it does not impose
any more than de minimis regulatory costs.
K. Conclusion
We estimate that aggregate payments to hospices in FY 2026 will
increase by $750 million as a result of the 2.6 percent final hospice
payment update, compared to payments in FY 2025. We estimate that in FY
2026, hospices in urban areas would experience, on average, a 2.6
percent increase in estimated payments compared to FY 2025; while
hospices in rural areas would experience, on average, a 3.0 percent
increase in estimated payments compared to FY 2025. Hospices providing
services in the New England region would experience the largest
estimated increases in payments of 3.9 percent. Hospices serving
patients in the Pacific region will experience, on average, the lowest
estimated increase of 1.5 percent in FY 2026 payments.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
Mehmet Oz Administrator of the Centers for Medicare & Medicaid
Services, approved this document on July 21, 2025.
List of Subjects in 42 CFR Part 418
Health facilities, Medicare, Reporting and recordkeeping
requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services amends 42 CFR chapter IV, part 418 as set forth
below:
PART 418--HOSPICE CARE
0
1. The authority citation for part 418 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.
0
2. Section 418.22 is amended by revising paragraphs (a)(4)(ii) and
(b)(4) to read as follows:
Sec. 418.22 Certification of terminal illness.
(a) * * *
(4) * * *
(ii) During a Public Health Emergency, as defined in Sec. 400.200
of this chapter, or through September 30, 2025, whichever is later, if
the face-to-face encounter conducted by a hospice physician or hospice
nurse practitioner is for the sole purpose of hospice recertification,
such encounter may occur via a telecommunications technology and is
considered an administrative expense. Telecommunications technology
means the use of interactive multimedia communications equipment that
[[Page 37431]]
includes, at a minimum, the use of audio and video equipment permitting
two-way, real-time interactive communication between the patient and
the distant site hospice physician or hospice nurse practitioner.
(b) * * *
(4) The physician or nurse practitioner who performs the face-to-
face encounter with the patient described in paragraph (a)(4) of this
section must attest in writing that he or she had a face-to-face
encounter with the patient, including the date of that visit. The
attestation must include the physician's or nurse practitioner's
signature and the date it was signed. The attestation could be a
separate and distinct section of, or an addendum to, the
recertification or a clinical note that indicates the face-to-face
encounter occurred, and includes the clinical findings of the face-to-
face encounter, the date of the visit, the signature of the physician
or nurse practitioner who conducted the face-to-face encounter, and the
date of the signature. If the attestation of the nurse practitioner or
a non-certifying hospice physician is a separate and distinct section
of, or an addendum to, the recertification, the attestation shall state
that the clinical findings of that visit were provided to the
certifying physician for use in determining continued eligibility for
hospice care.
* * * * *
0
3. Section 418.25 is amended by revising paragraphs (a) and (b)
introductory text to read as follows:
Sec. 418.25 Admission to hospice care.
(a) The hospice admits a patient only on the recommendation of the
medical director (or the physician designee, as defined in Sec. 418.3)
or the physician member of the hospice interdisciplinary group, in
consultation with, or with input from, the patient's attending
physician (if any).
(b) In reaching a decision to certify that the patient is
terminally ill, the hospice medical director (or the physician
designee, as defined in Sec. 418.3) or the physician member of the
hospice interdisciplinary group, must consider at least the following
information:
* * * * *
0
4. Section 418.312 is amended by revising paragraph (j)(2) to read as
follows:
Sec. 418.312 Data submission requirements under the hospice quality
reporting program.
* * * * *
(j) * * *
(2) A hospice must meet or exceed the data submission compliance
threshold in paragraph (j)(1) of this section to avoid receiving a 4-
percentage point reduction to its annual payment update for a given FY
as described under Sec. 418.306(b)(2) of this chapter.
Robert F. Kennedy, Jr.,
Secretary, Department of Health and Human Services.
[FR Doc. 2025-14782 Filed 8-1-25; 4:15 pm]
BILLING CODE 4120-01-P