[Federal Register Volume 91, Number 65 (Monday, April 6, 2026)]
[Proposed Rules]
[Pages 17338-17382]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-06604]
[[Page 17337]]
Vol. 91
Monday,
No. 65
April 6, 2026
Part II
Department of Health and Human Services
-----------------------------------------------------------------------
Centers for Medicare & Medicaid Services
-----------------------------------------------------------------------
42 CFR Part 418
Medicare Program; FY 2027 Hospice Wage Index and Payment Rate Update
and Hospice Quality Reporting Program Requirements; Proposed Rule
Federal Register / Vol. 91 , No. 65 / Monday, April 6, 2026 /
Proposed Rules
[[Page 17338]]
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 418
[CMS-1851-P]
RIN 0938-AV78
Medicare Program; FY 2027 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: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would update the hospice wage index,
payment rates, and aggregate cap amount for Fiscal Year (FY) 2027. This
proposed rule also includes an analysis of Medicare non-hospice
spending, including details regarding a hospice service and spending
variation index (SSVI), and proposes to require that hospices provide
the hospice election statement addendum to all Medicare beneficiaries
at the time of hospice election. Additionally, this rule proposes
conforming regulation text changes to discharge from hospice care
regulations; regulation text changes to the face-to-face encounter
regulations; and includes requests for information on community
palliative care services; the construction of a hospice specific wage
index; and the overlap between hospice and medical aid in dying (MAID).
Finally, this rule proposes changes to the Hospice Quality Reporting
Program.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below by June 1, 2026.
ADDRESSES: In commenting, refer to file code CMS-1851-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (choose only one of the ways listed):
1. Electronically. You may submit electronic comments on this
regulation to https://www.regulations.gov/docket/CMS-2026-1156. Follow
the ``Submit a comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-1851-P, P.O. Box 8010,
Baltimore, MD 21244-1850.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-1851-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
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:
Inspection of Public Comments: All comments received before the
close of the comment period are available for viewing by the public,
including any personally identifiable or confidential business
information that is included in a comment. We post all comments
received before the close of the comment period on the following
website as soon as possible after they have been received: https://www.regulations.gov. Follow the search instructions on that website to
view public comments. CMS will not post on Regulations.gov public
comments that make threats to individuals or institutions or suggest
that the individual will take actions to harm the individual. CMS
continues to encourage individuals not to submit duplicative comments.
We will post acceptable comments from multiple unique commenters even
if the content is identical or nearly identical to other comments.
Plain Language Summary: In accordance with 5 U.S.C. 553(b)(4), a
plain language summary of this proposed rule may be found at https://www.regulations.gov/.
I. Executive Summary
A. Purpose
This proposed rule would update the hospice wage index, payment
rates, and cap amount for FY 2027 as required under section 1814(i) of
the Social Security Act (the Act). This proposed rule also includes an
analysis of Medicare non-hospice spending under a hospice election,
including details regarding a hospice spending variation index (SSVI).
The SSVI includes a scoring system that monitors nine claims-based
metrics in order to comprehensively assess hospice services and yield a
provider ranking that can be utilized by beneficiaries to make more
informed health decisions and support program integrity efforts. This
rule also proposes to require that hospices provide the hospice
election statement addendum to all Medicare beneficiaries at the time
of hospice election. Additionally, this proposed rule proposes
conforming regulation text changes to allow a physician designee or
physician member of the interdisciplinary group (IDG), in addition to
the hospice medical director, to discharge a patient from hospice care.
This proposed rule also proposes conforming regulation text changes to
the hospice telehealth face-to-face policy for the sole purpose of
hospice recertification codified at Sec. 418.22(a)(4)(ii) to align
with the end date and new requirement to include modifiers or codes for
such encounters as set forth in statute at section 1814(a)(7)(D)(i)(II)
of the Act, as well as a subclause that prohibits the use of telehealth
to conduct the face-to-face encounter in specific situations related to
moratoriums (section 1866(j)(7) of the Act), enhanced oversight
(section 1866(j)(3) of the Act), or enrollment status (section 1866(j)
of the Act). This proposed rule also includes requests for information
(RFI) on enhancing community palliative care services under current
Medicare benefits, the construction of a hospice specific wage index
using Bureau of Labor Statistics (BLS) data, and the overlap between
hospice and medical aid in dying (MAID). Finally, this rule proposes
adding an icon to the Medicare.gov Compare Tool as part of the Hospice
Quality Reporting Program (HQRP), in addition to other updates to the
HQRP.
B. Summary of the Major Provisions
Section III.A.1. of this proposed rule includes proposed 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 proposed rule includes the proposed FY
2027 hospice payment update percentage.
Section III.A.3. of this proposed rule includes the proposed FY
2027 hospice payment rates.
Section III.A.4. of this proposed rule includes the proposed update
to the hospice cap amount for FY 2027 by the hospice payment update
percentage.
Section III.B.1. of this proposed rule includes analysis of
Medicare non-
[[Page 17339]]
hospice spending under a hospice election.
Section III.B.2. of this proposed rule includes details regarding a
hospice SSVI.
Section III.C. of this proposed rule proposes to make the hospice
election statement addendum mandatory for all hospice elections.
Section III.D.1. of this proposed rule proposes a clarifying
regulation text change at Sec. 418.26(b) that aligns the Conditions of
Participation (CoPs) and payment regulations regarding who may
discharge a patient from hospice care.
Section III.D.2. of this proposed rule proposes technical
regulation text changes at Sec. 418.22(a)(4)(ii) to extend the end
date of the telehealth allowance for the face-to-face encounter until
December 31, 2027, as set forth at section 1814(a)(7)(D)(i)(II) of the
Act, and to include a new requirement to include modifiers or codes for
such encounters, and prohibit the use of telehealth to conduct the
face-to-face encounter in specific situations related to moratoriums
(section 1866(j)(7) of the Act), enhanced oversight (section 1866(j)(3)
of the Act), or enrollment status (section 1866(j) of the Act).
Section III. E.1. of this proposed rule includes a Request for
Information (RFI) on ways to enhance the provision of community
palliative care outside of hospice care.
Section III. E.2. of this proposed rule includes an RFI regarding
the construction of a hospice specific wage index.
Section III. E.3. of this proposed rule includes an RFI on Medical
Aid in Dying.
Section III.F. of this proposed rule proposes to provide updates to
the HQRP to include public reporting timeframes, future measures and a
proposal to add a data submission icon to the Care Compare tool.
C. Summary of Impacts
The overall economic impact of this proposed rule is estimated to
be $785 million in increased payments to hospices in FY 2027.
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
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, physician
designee, or physician member of the hospice 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 (Sec. 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 rule must comply with applicable civil
rights laws, including section 504 of the Rehabilitation Act of 1973
(Pub. L. 93-112, September 26, 1973), the Americans with Disabilities
Act (Pub. L. 101-336, July 26, 1990), and section 1557 of the Patient
Protection and Affordable Care Act (Pub. L. 111-148, March 23, 2010),
which prohibit covered entities from discriminating against individuals
based on disability. This includes requiring covered entities to take
appropriate steps to ensure that communication 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
[[Page 17340]]
the benefits of, a service, program, or activity of a covered
entity.\1\
---------------------------------------------------------------------------
\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. CMS must ensure that pursuant to 42
U.S.C. 1396a(w) facilities provide written information to residents
of their rights to have and make advance directives and that care
facilities must respect the conscience rights of providers and
healthcare workers in caring for patients with respect to advance
directives and under 42 U.S.C. 1396a(w)(3).
---------------------------------------------------------------------------
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 ``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\
---------------------------------------------------------------------------
\2\ Hospice Regulations and Notices. https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-regulations-and-notices.
---------------------------------------------------------------------------
III. Provisions of the Proposed Rule
A. Proposed FY 2027 Hospice Wage Index and Rate Update
1. Proposed FY 2027 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.
[[Page 17341]]
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 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 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.
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.
Once the county's wage index value calculated using the new OMB
delineation is higher than 95 percent of their previous FY's wage
index, the county will no longer use their assigned transition code.
Instead, 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. Proposed FY 2027 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 2027, we
are proposing that the hospice wage index would be based on the FY 2027
hospital pre-floor, pre-
[[Page 17342]]
reclassified wage index for hospital cost reporting periods beginning
on or after October 1, 2022 and before October 1, 2023 (FY 2023 cost
report data). We note that the FY 2027 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 (BBA) of 1997 (Pub. L. 105-33,
August 5, 1997) 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. We propose that the FY
2027 hospice wage index would continue to include the hospice floor as
well as the 5 percent cap on wage index decreases.
The appropriate FY 2027 wage index value would 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 2027 wage index value would 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 2027, the
only CBSA without a hospital from which hospital wage data can be
derived is 25980, Hinesville, Georgia. As such, we are proposing that
the proposed FY 2027 hospice wage index for Hinesville, Georgia would
be 0.8917.
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 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 2027
wage index for rural area 99935, North Dakota, we use 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 would result in a proposed FY 2027 hospice
wage index of 0.8299 for rural North Dakota. Additionally, in the FY
2026 Hospice Wage Index and Rate Update final rule (90 FR 37410), using
our established methodology for rural areas with no hospitals, we
finalized that 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.
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 2027 pre-hospice floor
unadjusted wage index for rural Puerto Rico is 0.2577 subsequently
adjusted by the hospice floor to equal 0.2964. Because 0.2964 is more
than a 5 percent decline in the FY 2026 wage index, the adjusted
proposed FY 2027 wage index with the 5 percent cap applied would equal
0.95 multiplied by 0.4200 (that is, the FY 2026 wage index with 5
percent cap), which would result in a proposed FY 2027 wage index value
of 0.3990.
The proposed hospice wage index applicable for FY 2027 (October 1,
2026 through September 30, 2027) is available on the FY 2027 Hospice
Wage Index proposed rule web page at https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-regulations-and-notices.
2. Proposed FY 2027 Hospice Payment Update Percentage
Section 4441(a) of the BBA of 1997, August 5, 1997) 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. In
the FY 2026 IPPS/LTCH PPS final rule (90 FR 36859 through 36866), we
finalized the rebased and revised IPPS market basket to reflect a 2023
base year, to begin in FY 2026.
[[Page 17343]]
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 economy-wide productivity
as specified in section 1886(b)(3)(B)(xi)(II) of the Act. The Act
defines the productivity adjustment to be equal to the 10-year moving
average of changes in annual economy-wide private nonfarm business
multifactor productivity 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.
The productivity measure referenced in section 1886(b)(3)(B)(xi)(II) of
the Act is published by BLS as private nonfarm business total factor
productivity (TFP) (previously referred to as multifactor
productivity).\3\ We refer readers to https://www.bls.gov/ productivity
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.
---------------------------------------------------------------------------
\3\ https://www.bls.gov/productivity/notices/2021/mfp-to-tfp-term-change.htm.
---------------------------------------------------------------------------
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 2027 is based on the most
recent estimate of the inpatient hospital market basket (based on IGI's
fourth quarter 2025 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 2027 of 3.2
percent is 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 2027 is 0.8 percentage point (based on
IGI's fourth quarter 2025 forecast). Therefore, the proposed hospice
payment update percentage for FY 2027 is 2.4 percent. We are also
proposing that if more recent data become 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 2027 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.
3. Proposed FY 2027 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.
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 day
61 and subsequent days. 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 occur 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 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 2027, the proposed SIA budget neutrality factor is 0.9999 for RHC
days 1-60 and 0.9999 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 to eliminate the aggregate effect of annual
variations in hospital wage data. For FY 2027 hospice rate setting, we
are continuing our longstanding policy of using the most recent data
available. Specifically, we propose using FY 2025 claims data (as of
January 15, 2026) for the FY 2027 payment rate updates. We note that
the budget neutrality factors and payment rates would be updated with
more complete FY 2025 claims data in the FY 2027 hospice final rule.
The wage index standardization factor is calculated by simulating total
payments using FY 2025 hospice utilization claims data with the FY 2026
wage index (pre-floor, pre-reclassified hospital wage index with the
hospice floor and the 5 percent cap on wage index decreases) and FY
2026 payment rates and compare it to our simulation of total payments
using FY 2025 utilization claims data, the FY 2027 hospice wage index
(pre-floor, pre-reclassified hospital wage index with hospice floor,
and the 5 percent cap on wage index decreases) and FY 2026 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 2026 wage index and
FY 2026 payment rates for each level of care by the FY 2027 wage index
and FY 2026 payment rates, we obtain a wage index standardization
factor for each level of care. The proposed wage index standardization
factors using FY 2025 claims data (as of January 15, 2026) for each
level of care are shown in Tables 1 and 2.
The proposed FY 2027 RHC payment rates are shown in Table 1. The
proposed FY 2027 payment rates for CHC, IRC, and GIP are shown in Table
2.
[[Page 17344]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.000
[GRAPHIC] [TIFF OMITTED] TP06AP26.001
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 for 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 proposed FY 2027 rates
for hospices that do not submit the required quality data would be
updated by -1.6 percent, which is the proposed FY 2027 hospice payment
update percentage of 2.4 percent minus 4 percentage points. The
proposed payment rates for hospices that do not submit the required
quality data are shown in Tables 3 and 4.
[[Page 17345]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.002
[GRAPHIC] [TIFF OMITTED] TP06AP26.003
4. Proposed Hospice Cap Amount for FY 2027
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, March 15, 2022) 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. 117-328, December 29, 2022) 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, March 9, 2024) extends this provision to October 1, 2033.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
[[Page 17346]]
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.
Division J, section 6218 of the Consolidated Appropriations Act,
2026 (CAA, 2026) (Pub. L. 119-75, February 3, 2026) amended section
1814(i)(2)(B) of the Act and extended the accounting years impacted by
the adjustment made to the hospice cap calculation until 2035. 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, 2033. Therefore, for accounting years
that end after September 30, 2016, and before October 1, 2035, the
hospice cap amount is updated by the hospice payment update percentage
rather than the CPI-U. As a result of the changes mandated by the CAA,
2026, we are proposing 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 2027 cap year would be
$36,210.11 which is equal to the FY 2026 cap amount ($35,361.44)
updated by the proposed FY 2027 hospice payment update of 2.4 percent.
We are also proposing that if more recent data become available after
the publication of the proposed rule and before the publication of the
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 2027 hospice final rule.
B. Non-Hospice Spending During a Hospice Election
1. Medicare Non-Hospice Spending
a. Background
The Medicare hospice per diem payment amounts were developed to
cover all services needed for the palliation and management of the
terminal illness and related conditions, as described in section
1861(dd)(1) of the Act. Hospice services provided under a written plan
of care (POC) should reflect patient and family goals and interventions
based on the problems identified in the initial, comprehensive, and
updated comprehensive assessments as outlined in the hospice CoPs at
Sec. 418.56. As referenced in our regulations at Sec. 418.64, a
hospice must routinely provide all core services directly by hospice
employees and they must be provided in a manner consistent with
acceptable standards of practice. Under the current payment system,
hospices are paid for each day that a beneficiary is enrolled in
hospice care, regardless of whether services are rendered on any given
day.
Additionally, when a beneficiary elects the Medicare hospice
benefit, he or she waives the right to Medicare payment for services
related to the treatment of the terminal illness and related
conditions, except for services provided by the designated hospice and
the attending physician. The comprehensive nature of the services
covered under the Medicare hospice benefit is structured so that
hospice beneficiaries would not have to routinely seek items, services,
and medications beyond those provided by hospice. We believe that it
would be unusual and exceptional to see services provided outside of
hospice for those individuals who are approaching the end of life, and
we have reiterated since 1983 that ``virtually all'' care needed by the
terminally ill individual would be provided by the hospice (48 FR
56010, 84 FR 38509, 85 FR 47091, 86 FR 19713, 88 FR 20032, 89 FR
64202). Hospices are required to provide the individual (or
representative) with information indicating that services unrelated to
the terminal illness and related conditions are exceptional and unusual
and the hospice should be providing virtually all care needed by the
individual who has elected hospice, as codified in regulations at Sec.
418.24(b)(3).
b. Medicare Non-Hospice Spending Since Implementation of the Hospice
Election Statement Addendum
Since the implementation of the hospice election statement addendum
requirement in FY 2020 (84 FR 38484), which must be provided upon
request, Medicare non-hospice spending for beneficiaries who have
elected the hospice benefit has shown substantial and consistent
growth. Specifically, Medicare paid over $2.8 billion in non-hospice
spending during a hospice election in FY 2024 for items and services
under Parts A, B, and D (see Figure 1 and B).
Figure 1: Medicare Payments for Non-Hospice Medicare Part A and Part B
Items and Services During Hospice Elections, FYs 2020-2024
[[Page 17347]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.004
Figure 2: Medicare Payments for Non-Hospice Medicare Part D Drugs
During Hospice Elections, FYs 2020-2024
[[Page 17348]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.005
Medicare payments for non-hospice Part A and Part B items and
services received by hospice beneficiaries during a hospice election
increased from nearly $790 million in FY 2020 to over $2 billion in FY
2024 (see Figure B1). This represents an increase in non-hospice
Medicare spending for Parts A and B of nearly $1.3 billion, or 160
percent. The most substantial increase in a single year occurred from
FY 2023 to FY 2024, which demonstrated an increase in non-hospice
Medicare spending for Part A and Part B items and services of $770
million, or 60 percent.
While there is minimal beneficiary cost sharing under the Medicare
hospice benefit,\4\ non-hospice services received outside of the
Medicare hospice benefit are subject to beneficiary cost sharing. In FY
2024, the total beneficiary cost sharing amount for beneficiaries
electing the hospice benefit was $510 million for Parts A and B.\5\ In
FY 2024, beneficiaries receiving hospice services from for-profit
hospices had, on average, nearly 167 percent higher non-hospice
spending per day compared to beneficiaries under non-profit hospice
care. This represents a significant increase from FY 2022, when
beneficiaries receiving hospice services from for-profit hospices had,
on average, 60 percent higher non-hospice spending per day compared to
beneficiaries under non-profit hospice care.
---------------------------------------------------------------------------
\4\ The amount of coinsurance for each prescription approximates
five percent of the cost of the drug or biological to the hospice
determined in accordance with the drug copayment schedule
established by the hospice, except that the amount of coinsurance
for each prescription may not exceed $5. The amount of coinsurance
for each respite care day is equal to five percent of the payment
made by CMS for a respite care.
\5\ Part A and B cost sharing is calculated by summing together
the deductible and coinsurance amounts for each claim.
---------------------------------------------------------------------------
We also examined non-hospice spending during a hospice election by
claim type for Part A and Part B items and services, as shown in Table
5. In percentage terms, we found the most dramatic increase in billing
related to carrier/physician supply. From FY 2020 to FY 2024, non-
hospice spending related to carrier/physician supply increased 317.5
percent with a notable single year spike from FY 2022 to FY 2023 of
63.5 percent, and the largest increase in one year occurred from FY
2023 to FY 2024 with an increase of 90.8 percent. The diagnosis code
for carrier claims with the largest increase in spending in FY 2024 was
for pressure ulcers, largely associated with skin substitutes, which
accounted for 47 percent, almost half of the carrier claim spending.
Carrier claims for ulcers from FY 2020 to FY 2024 increased by almost
4,000 percent, rising from $18 million in FY 2020 to $714 million in FY
2024. CMS is aware of the increased provision of skin substitutes
overall and changes were made to the reimbursement for
[[Page 17349]]
skin substitutes beginning in 2026. Effective January 1, 2026, CMS
implemented major changes to skin substitute payments, transitioning
most products to a single, national unified rate of approximately
$127.14 per cm\2\ (90 FR 49266, 90 FR 53448) in CY 2026, with the
intent to propose payment rates that differentiate among three FDA
regulatory categories in future years. This policy, applicable to both
non-facility and hospital outpatient settings, classifies products as
``incident-to'' supplies to eliminate the Average Sales Price (ASP) + 6
percent model, aiming to significantly reduce Medicare spending.
Additionally, it is not unusual for terminally ill patients to have
skin breakdown as a result of their deconditioned state and where wound
care would be appropriate for comfort. As such, we question why
hospices would not be providing needed wound care for pressure ulcers
(which could potentially require a skin substitute in certain
circumstances) given that pressure ulcers generally develop from
unrelieved pressure as a result of limited mobility and in terminally
ill individuals who are chairbound or bedbound.
Additionally, we found notable consistent increases in outpatient
and inpatient services in recent years, as shown in Table 5. From FY
2020 to FY 2024, non-hospice spending related to outpatient services
increased 40.4 percent and inpatient services increased by 26.9 percent
in the same time frame. Additionally, we found that 30.1 percent and
25.9 percent of the non-hospice spending that occurred in FY 2024 was
related to the primary hospice diagnosis of Alzheimer's disease/
dementia/Parkinson's and heart conditions (Congestive Heart Failure and
other heart disease), respectively. We also found that daily rates of
non-hospice spending for services in FY 2024 are greater for every
claim type, and 166.9 percent higher in total spending per day, for
patients receiving hospice services in for-profit vs. non-profit
hospices. We also noted that 67 percent of non-hospice spending
occurred after hospice election day 60.
[GRAPHIC] [TIFF OMITTED] TP06AP26.006
Hospices are responsible for covering drugs and biologicals related
to the palliation and management of the terminal illness and related
conditions while the patient is under hospice care. After a hospice
election, many maintenance drugs or drugs used to treat or cure a
condition are typically discontinued as the focus of care shifts to
palliation and comfort measures. However, those same drugs may be
appropriately continued, as they may offer symptom relief for the
palliation and management of the terminal prognosis.\6\ Similar to the
increase in non-hospice spending during a hospice election for Medicare
Parts A and B items and services, non-hospice spending for Part D drugs
increased from $552.9 million in FY 2020 to $813.1 million in FY 2024,
which represents an increase of over a 47 percent (Figure B2).
---------------------------------------------------------------------------
\6\ Update on Part D Payment Responsibility for Drugs for
Beneficiaries Enrolled in Medicare Hospice. November 2016. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/Hospice/Downloads/2016-11-15-Part-D-Hospice-Guidance.pdf.
---------------------------------------------------------------------------
Table 6 details the various components of Part D spending for
patients receiving hospice care for FYs 2020 to FY 2024. The portion of
the FY 2020 to FY 2024 Part D spending that was paid by Medicare is the
sum of the Low-Income Cost-Sharing Subsidy and the Covered Drug Plan
Paid Amount, approximately $3.3 billion. The beneficiary cost sharing
amount was approximately $335.1 million.\7\
---------------------------------------------------------------------------
\7\ Part D cost sharing is calculated by summing together the
``the patient pay amount'' and the ``other true out of pocket''
amount that are recorded on the Part D PDE.
---------------------------------------------------------------------------
[[Page 17350]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.007
We also note hospice beneficiaries with principal diagnoses of
neurological and degenerative diseases, circulatory and cerebrovascular
diseases, respiratory diseases, and neoplasms have received clinically
indicated services for these conditions outside the hospice benefit.
This issue may arise from hospices misclassifying conditions, referring
patients to non-hospice providers, failing to coordinate care, or
deliberately avoiding costs. We have examined principal hospice
diagnoses on claims and identified Part B items and services paid
outside the hospice benefit and have found concerning trends in non-
hospice spending. Our intent in including data regarding non-hospice
spending related to hospice principal diagnosis codes in this proposed
rule is to highlight items and services we believe should be covered
under the hospice benefit. For example, it is not clear why medications
like bronchodilators or oxygen would be considered unrelated to a
respiratory condition indicated as the primary hospice diagnosis.
As we discussed previously, the hospice model is interdisciplinary
and focuses on symptom management rather than curative treatment.
Covering related services under the hospice benefit reinforces this
philosophy by ensuring that care for the terminal condition, including
medications, equipment, supplies, and therapies, is managed and
integrated by the hospice IDG. We question whether increased spending
outside of the hospice benefit is indicative of diminishing
comprehensive and patient-centered care. Covering all items and
services related to the principal hospice diagnosis ensures that
patients receive coordinated medical, nursing, psychosocial, and
supportive services that address the full scope of a patient's end-of-
life needs. This approach reduces fragmentation, prevents gaps in care,
and supports comfort, dignity, and quality of life. Further, it reduces
the burden of navigating additional coverage and cost sharing that the
patient would not have under the hospice benefit.
As the hospice benefit requires hospice coverage of all items and
services related to the terminal illness and any related conditions,
the increase in non-hospice spending, particularly for items and
services that appear objectively related to the principal diagnosis,
may suggest non-compliance with statutory and regulatory requirements
and inappropriate cost-
[[Page 17351]]
shifting to other Medicare benefits. Covering items and services
related to the principal hospice diagnosis is essential to maintaining
the integrity of the hospice benefit, ensuring coordinated and
compassionate end-of-life care, protecting beneficiaries, and
supporting responsible stewardship of Medicare resources. In the
following section, we describe in more detail spending data on non-
hospice services from FY 2024.
[GRAPHIC] [TIFF OMITTED] TP06AP26.008
Additionally, we analyzed the same principal diagnosis coding
groups for Part D drugs paid outside of the hospice benefit.
[GRAPHIC] [TIFF OMITTED] TP06AP26.009
Neurological and Degenerative Diseases
We grouped claims in this diagnostic coding group using ICD-10-CM
codes for G30, G31, and G20. This group includes Alzheimer's disease,
Parkinson's disease, and other degenerative diseases of the nervous
system. In FY 2024 claims, there are about 48,840,937 hospice days and
1,951,568 hospice claims in this diagnosis coding group. The non-
hospice spending for this category for DME and carrier claim types was
about $576 million. DME services that were billed during hospice stays
related to these conditions during the same time included medical/
surgical supplies, such as wound care supplies, catheters and
incontinence supplies, tubing, masks, and needles, costing about $400
million, and wheelchairs, oxygen supplies, and hospital beds together
cost about $0.5 million. Part D drugs that were billed during hospice
stays related
[[Page 17352]]
to these conditions included (but are not limited to) about $44.5
million for common palliative drugs, such as analgesics, anxiolytics,
antiemetics, and laxatives; $1.7 million for therapeutic nutrients and
electrolytes; and $0.8 million for diuretics.
Circulatory and Cerebrovascular Diseases
We grouped claims in this diagnostic coding group using ICD-10-CM
codes for I11, I25, I50, I63, I67, I69, and I13. This group includes
circulatory and cerebrovascular diseases, such as heart failure,
cerebrovascular diseases (stroke), ischemic heart disease, and
hypertensive heart/kidney disease. In FY 2024 claims, there are about
47,380,977 hospice days and 1,938,372 hospice claims in this diagnosis
coding group. The non-hospice spending for these conditions for DME and
carrier claim types was about $590 million. DME services that were
billed during hospice stays related to these conditions during the same
time included (but are not limited to) medical/surgical supplies
costing about $402 million; wheelchairs, oxygen supplies, and hospital
beds together cost about $1.1 million. Part D drugs that were billed
during hospice stays related to these conditions included about $177
million for anticoagulants, blood cell stimulations, beta blockers,
vasodilators, and anti-hypertensives; $18.6 million for common
palliative drugs, such as analgesics, anxiolytics, antiemetics, and
laxatives; $3 million for therapeutic nutrients and electrolytes; and
$2.2 million for diuretics.
Respiratory Diseases
We grouped claims in this diagnostic coding group using ICD-10-CM
codes for J44 and J96. This group includes chronic obstructive
pulmonary disease and respiratory. In FY 2024 claims, there are about
11,101,869 hospice days and 511,917 hospice claims in this diagnosis
coding group. The non-hospice spending for this category for DME and
carrier claim types was about $95 million. DME services that were
billed during hospice stays related to these conditions during the same
time included medical/surgical supplies costing about $50 million;
wheelchairs, oxygen supplies, and hospital beds together costing about
$0.5 million. Part D drugs that were billed during hospice stays
related to this condition included (but are not limited to) about $24
million for bronchodilators; $7 million for common palliative drugs,
such as analgesics, anxiolytics, antiemetics, and laxatives; $0.6
million for therapeutic nutrients and electrolytes; and $0.5 million
for diuretics.
All Cancers
We grouped claims in this diagnostic coding group using ICD-10-CM
codes for C00-D49. This group included all the diagnosis codes in the
Neoplasms (C00-D49) Chapter in the ICD-10-CM. In FY 2024 claims, there
are about 18,721,188 hospice days and 1,008,342 hospice claims in this
diagnosis coding group. The non-hospice spending for this category for
DME and carrier claim types was about $106 million. DME services that
were billed during hospice stays related to these conditions during the
same time included medical/surgical supplies costing about $46 million;
wheelchairs, oxygen supplies, and hospital beds together cost about
$0.3 million. Part D drugs that were billed during hospice stays
related to these conditions included (but are not limited to) about
$5.6 million for common palliative drugs, such as analgesics,
anxiolytics, antiemetics, and laxatives; $0.5 million for therapeutic
nutrients and electrolytes; and $0.4 million for diuretics.
For more detailed non-hospice spending data, the full file is
available in the downloads section found at the FY 2027 hospice final
rule link on the Hospice Center web page at https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/hospice-center.
2. Service and Spending Variation Index (SSVI)
CMS currently monitors and publicly shares data related to hospice
utilization. Using the most recent, complete claims data, CMS analyzes
Medicare spending, utilization by level of care, lengths of stay, live
discharge rates, and skilled visits during the last days of life.
Interested parties report that such data is useful in highlighting
certain issues and trends regarding Medicare policies. Additionally, we
monitor a variety of other metrics from claims data including: percent
of beneficiaries discharged with length of stay 180 days or more,
percent of total discharges that were live discharges, total number of
discharges (live or dead), average minutes of direct patient care per
RHC day, average visits per RHC day, percent of RHC days on the weekend
with at least one skilled visit, non-hospice spending per day, the
percent of live discharges where a beneficiary returns to the same
hospice within seven days, and total amount of non-hospice spending. By
analyzing hospice utilization and other metrics, CMS can evaluate the
behaviors of hospices to combat potential risks to the integrity of the
Medicare program.
Analyzing these particular Medicare hospice metrics together is
important because patterns across them can signal potential program
integrity risks, inappropriate utilization, or quality of care
concerns, especially when they deviate substantially between different
hospices or from expected norms. For example, long lengths of stay
combined with high live discharge rates may signal inappropriate
enrollment of ineligible beneficiaries. Low number of visits, shorter
visits, or fewer weekend visits may indicate minimal service provision.
We recognize that patient census could vary year to year for each
hospice (for example, in a given year, it may be possible that a
hospice had a patient census that did not require any general inpatient
level of care) and does not necessarily signal that a hospice is acting
in an inappropriate manner. As such, we developed a scoring system, the
SSVI, that is calculated using nine claims-based measures, each
representing different aspects of hospice utilization as well as non-
hospice spending. To calculate the SSVI score, we first determined a
threshold for each of the nine metrics. For the non-hospice spending
component of the SSVI score, we created eight separate thresholds for
total non-hospice spending, as the degree to which a hospice spends
outside of the hospice benefit can indicate varying levels of concern.
For example, a hospice with higher non-hospice spending levels receives
a higher number of points than a hospice with about 12.5 percent less
non-hospice spending. Metrics related to utilization reflect visit and
discharge patterns. The SSVI can be used to identify hospices that are
outliers across many different utilization metrics and those that have
a high level of non-hospice spending. We established thresholds using
percentiles. For most of the individual measures, we established the
threshold at the top or bottom 25 percent of the distribution. It is
important to note that falling into this quartile on a single measure
does not necessarily indicate poor performance or improper practices.
There are often legitimate operational reasons for a hospice to be an
outlier in an isolated area. Instead, this 25 percent threshold acts as
a preliminary filter. The objective of the SSVI is not to evaluate
hospices based on a single metric, but to identify hospices that are
outliers across multiple independent metrics. A hospice triggering the
25 percent threshold on at least one metric is not uncommon. A hospice
triggering that
[[Page 17353]]
threshold across many distinct metrics could indicate unusual
utilization that may require further review.
For these utilization metrics, when a hospice's outcome for that
metric surpasses the metric's threshold, then the hospice receives one
point in its score for that metric. Second, we add each of the nine
scores, that is, one score per metric, together to calculate the SSVI
score. The total SSVI score is derived by adding together a hospice's
total non-hospice spending score and their utilization score.
The lowest SSVI score a hospice can receive is zero, that is, a
score of zero for each of the nine metrics, and the maximum SSVI score
is 16, that is, with the highest points assigned for each of the nine
metrics. A higher SSVI score represents a potential higher level of
concern, as this may signal potential program integrity risks or
inappropriate utilization especially when a hospice's SSVI score is
substantially higher than its peers. In Table 9 below, we describe each
of the nine metrics and the threshold values for those metrics. Given
that we calculate a hospice's SSVI score using an evaluation of nine
metrics, a high SSVI score indicates to CMS that a hospice might have
more than one area of concern and may require additional targeted
education or oversight, such as medical review, education, and
investigations that could result in payment suspension, and revocation,
if there is identified fraud, waste, or abuse. In other words, each
score used to calculate the SSVI score can be used to identify a
specific area of concern for a hospice, and the SSVI score itself
provides an aggregate measure to evaluate a hospice as a whole. The
SSVI can assist interested parties in comparing hospices on a holistic
scale. Likewise, the SSVI is potentially another vehicle to target, and
address fraud, waste, and abuse. For example, higher spending outside
the Medicare hospice benefit may be indicative of abusive billing
because a hospice is paid a comprehensive per diem to cover essentially
all care at the end of life. Excessive non-hospice spending, for either
unrelated care or services and supplies which should be the hospice's
responsibility, may undermine the financial integrity of the hospice
benefit.
BILLING CODE 4120-01-P
[[Page 17354]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.010
We plan to determine the SSVI for individual hospices each fiscal
year using that applicable year's data. In this proposed rule, we are
publishing the SSVI scores calculated from data for FYs 2024 and 2025
because these are our
[[Page 17355]]
most recent and complete years of claims data. We may update the FY
2024 and FY 2025 SSVIs with any revisions we deem appropriate from
comments received on this proposed rule, when we publish the FY 2027
Hospice Wage Index and Rate Update final rule. In subsequent rulemaking
cycles, we would publish the updated SSVI, using the most recent claims
data, with the final rule. The FY 2024 hospice SSVI includes 6,409,155
hospice claims, representing 6,735 hospices and a total of 148,012,785
hospice days. The FY 2025 hospice SSVI includes 6,750,840 hospice
claims, representing 6,642 hospices and a total of 156,514,386 hospice
days. Table 10 shows the distribution of the number of hospices by
their total score for hospices in FYs 2024 and 2025 claims.
[GRAPHIC] [TIFF OMITTED] TP06AP26.011
BILLING CODE 4120-01-C
We will post the metrics and the SSVI scores for FYs 2024 and 2025,
additional data from claims-based measures, and related documentation
on the methodology on our Hospice Center web page at https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/hospice-center. Our goal is to identify individual hospice vulnerabilities to
help focus program integrity efforts, such as conducting medical
reviews, providing additional education, and conducting investigations
into individual hospices that could result in administrative actions
like payment suspension and/or revocation of hospices demonstrating
fraudulent behavior. We also believe the public will benefit from the
enhanced transparency this data provides, allowing beneficiaries and
their families the ability to make more informed choices regarding care
at the end of life. We seek feedback on the metrics used to calculate
the SSVI score as well as thoughts and suggestions regarding the
threshold values and point assignments.
[[Page 17356]]
C. Proposed Election Statement Addendum Changes
1. Background
Hospice care is a comprehensive, holistic approach to treatment
that recognizes the impending death of an individual may necessitate a
transition from curative to palliative care if the individual so
chooses. Medicare hospice care services are virtually all-inclusive,
and are focused on meeting the physical, emotional, psychosocial, and
spiritual needs of the terminally ill individual and his or her family.
In order to make an informed choice about whether to receive hospice
care, the patient, family, and caregiver must have an understanding of
what services are going to be provided by the hospice and that, because
there is no longer a reasonable expectation for a cure, care should now
focus on comfort and quality of life. The services covered under the
Medicare hospice benefit are comprehensive such that, upon election,
the individual waives all rights to Medicare payment for services
related to the treatment of the individual's condition with respect to
which a diagnosis of terminal illness has been made, except when
provided by the designated hospice or attending physician. Because of
the significance of this decision, the terminally ill individual must
elect hospice care in order to receive services under the Medicare
hospice benefit. Since we first implemented the Medicare hospice
benefit in 1983, it has been our general view that the waiver required
by law requires hospices to provide virtually all the care that is
needed by terminally ill patients (48 FR 56010). In the FY 2020 Hospice
Wage Index and Payment Rate Update and Hospice Quality Reporting
Requirements final rule (84 FR 38484), we finalized a policy, for
elections beginning on and after October 1, 2020, that requires
hospices to provide a hospice election statement addendum to
beneficiaries, their representatives, non-hospice providers, or
Medicare contractors, upon request. The purpose of the addendum is to
notify the hospice beneficiary (or representative) of those conditions,
items, services, and drugs the hospice will not be covering because the
hospice has determined they are unrelated to the beneficiary's terminal
illness and related conditions. The addendum is subject to review and
must be updated, as needed, when the plan of care is updated in
accordance with Sec. 418.56. The hospice must provide these updates,
in writing, to the beneficiary (or representative).
Currently, if the beneficiary (or representative) requests an
addendum at the time of hospice election (that is, within the first 5
days of the hospice election date), the hospice would have 5 days from
the date of the request to furnish this information in writing. If the
addendum is requested during the course of hospice care (that is, after
the first 5 days of the date of the hospice election), the hospice has
3 days from the date of the request to provide the addendum in writing.
However, if the beneficiary dies, revokes, or is discharged within the
required timeframes, the hospice would not be required to furnish the
addendum in this circumstance. These timeframes, and others, for
providing the addendum are outlined in Sec. 418.24(d). The required
content of the hospice election statement addendum is outlined
generally below and described in Sec. 418.24(c):
The addendum title (``Patient Notification of Hospice Non-
Covered Items, Services, and Drugs'');
Hospice name;
Individual's name and medical record identifier;
Identification of the terminal illness and related
conditions;
A list of the individual's conditions present on hospice
admission (or upon POC update) and the associated items, services, and
drugs not covered by the hospice because they have been determined by
the hospice to be unrelated to the terminal illness and related
conditions;
A written clinical explanation written in language that
the beneficiary (or representative) can understand;
References to relevant any clinical practice, policy, or
coverage guidelines;
Information on the purpose of the addendum and the right
to immediate advocacy through the Medicare Beneficiary and Family
Centered Care-Quality Improvement Organization (BFCC-QIO) if the
individual (or representative) disagrees with the hospice's
determination;
Individual (or representative) name, signature, and date
signed, along with a statement that signing the addendum (or its
updates) is only acknowledgement of receipt of the addendum (or its
updates) and not the individual's (or representative's) agreement with
the hospice determinations; and
The date the hospice furnished the addendum.
2. Proposed Mandatory Hospice Election Statement Addendum for All
Elections
We are proposing to require that hospices provide the hospice
election statement addendum to all Medicare beneficiaries at the time
of hospice election for hospice elections beginning on or after October
1, 2026. Section 1812(d)(1) of the Act requires beneficiaries to
affirmatively elect hospice care, and the hospice election involves a
significant waiver of Medicare rights, as beneficiaries waive all
rights to Medicare payment for services related to the treatment of
their terminal illness and related conditions, except for services
provided by the designated hospice and attending physician, pursuant to
section 1812(d)(2)(A) of the Act. Given the magnitude of this decision
and its impact on beneficiary rights and access to care, it is
essential that beneficiaries receive complete information about what
services will and will not be covered by the hospice at the time of
election to ensure truly informed consent.
Additionally, section 1871 of the Act provides the Secretary with
broad authority to prescribe regulations necessary to carry out the
administration of the Medicare program, including the authority to
establish provider conditions of participation, payment requirements,
and beneficiary rights and protections. Specifically, section
1871(f)(1) specifies that the Secretary should make efforts to reduce
inconsistency or conflicts for individuals entitled to Medicare
benefits. Under this authority, and consistent with our obligation to
ensure beneficiary protection and program integrity, we require that
hospices provide comprehensive disclosure of coverage determinations to
all beneficiaries electing the hospice benefit.
In the FY 2020 Hospice Wage Index and Payment Rate Update proposed
rule (84 FR 17570), CMS reiterated that hospice services should be
providing virtually all the care needed by the terminally ill
individual. CMS also reiterated that coverage decisions and treatment
determinations should take into account multiple factors, including not
only the opinion of the treating physician, but also other factors such
as the condition of the patient upon admission, the nature of the
principal diagnosis, and the existence of comorbid conditions, as these
all play an important role in coverage determinations. Determinations
about unrelated conditions, items, services, and drugs for each patient
should take into account the needs, preferences, and goals of the
terminally ill individual and his or her family; review of all of the
beneficiary's conditions, related and unrelated to the terminal illness
and related conditions; and current clinically relevant information
[[Page 17357]]
supporting all diagnoses as required by regulation at Sec. 418.25.
This process requires clinical judgment in which hospices need to
consider clinical practice guidelines and relevant research when making
determinations of whether items, services, and drugs are related or
unrelated to the terminal illness and related conditions.
The significant increases in non-hospice spending patterns, as
discussed in section III.B.1. of this proposed rule, suggest that the
current framework, where the hospice election statement addendum is
provided only upon request, has not achieved the intended
accountability objective of ensuring that hospices provide virtually
all care needed by terminally ill individuals as required under the
comprehensive and holistic Medicare hospice benefit. Most notably, as
discussed in section III.B.1., Medicare non-hospice spending for Parts
A and B increased from nearly $790 million in FY 2020 to over $2
billion in FY 2024, representing a 160 percent increase, demonstrating
that the voluntary nature of the current addendum requirement has not
adequately addressed coverage transparency concerns or stemmed
inappropriate billing of services outside of the hospice benefit.
Additionally, many beneficiaries may not understand the importance of
requesting the addendum, may not understand their right to receive this
information, or may not receive it in time to make fully informed
decisions about their care, also not achieving the intended
transparency objective. Further, the substantial growth in non-hospice
spending, particularly for services that may be related to the terminal
illness and related conditions, indicates potential gaps in coverage
transparency and coordination between hospice and non-hospice
providers.
Per the hospice CoPs at Sec. 418.56(e)(5), hospices are required
to develop and maintain a system of communication and integration among
all providers furnishing care to the terminally ill patient. This
includes the ongoing sharing of information with other non-hospice
healthcare providers and suppliers furnishing services unrelated to the
terminal illness and related conditions is necessary to ensure
coordination of services and to meet the patient, family, and caregiver
needs. Despite this CoP requirement, we continue to receive reports
from non-hospice providers stating that they are not provided a
beneficiary's addendum when requested from the hospice, are unable to
reach, or do not receive communication from the hospice to discuss the
hospice beneficiary's coordination of services that the hospice has
determined unrelated to his or her terminal illness and related
condition(s). Similarly, we have also received reports from non-hospice
providers who state that hospices are requesting that services be
billed to Medicare Part A and B, other inquiries where non-hospice
providers are requesting payment from hospices for services that should
be the hospices' coverage responsibility but where the hospices have
not paid for such services or do not respond to these requests, and
hospices who state they were unaware that patients had received care
from non-hospice providers. Additionally, if a beneficiary receives
services related to the terminal illness and related conditions and the
hospice did not arrange for such care, the beneficiary, potentially
unknowingly, would be liable for the costs related to those services.
Likewise, Medicare would be making duplicative payments for care
related to the terminal illness and related conditions if non-hospice
providers bill Medicare for services that should have been the coverage
responsibility of the hospice.
Additionally, the Office of Inspector General (OIG) has completed
audits on non-hospice spending for outpatient services provided to
hospice beneficiaries,\8\ Medicare payments to non-hospice providers
for items and services provided to hospice beneficiaries,\9\ and
improper Medicare payments for durable medical equipment, prosthetics,
orthotics, and supplies provided to hospice beneficiaries.\10\ These
reports highlight vulnerabilities in the Medicare hospice benefit and
describe fragmented care that beneficiaries may experience under a
hospice election.
---------------------------------------------------------------------------
\8\ Medicare Improperly Paid Acute-Care Hospitals an Estimated
$190 Million Over 5 Years for Outpatient Services Provided to
Hospice Enrollees (A-09-23-03024). November 12, 2024. https://oig.hhs.gov/documents/audit/10055/A-09-23-03024.pdf.
\9\ Medicare Payments of $6.6 Billion to Nonhospice Providers
Over 10 Years for Items and Services Provided to Hospice
Beneficiaries Suggest the Need for Increased Oversight (A-09-20-
03015). February 14, 2022. https://oig.hhs.gov/documents/audit/9604/A-09-20-03015-Complete%20Report.pdf.
\10\ Medicare Improperly Paid Suppliers an Estimated $117
Million Over 4 Years for Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies Provided to Hospice Beneficiaries (A-09-20-
03026). November 16, 2021. https://oig.hhs.gov/documents/audit/9609/A-09-20-03026-Complete%20Report.pdf.
---------------------------------------------------------------------------
In the FY 2022 Hospice Wage Index and Payment Rate Update proposed
rule (86 FR 42528), we requested feedback from interested parties as to
whether the hospice election statement addendum has changed the way
hospices make care decisions and how the addendum is used to prompt
discussions with beneficiaries and non-hospice providers to promote the
care needs of hospice beneficiaries. The responses revealed that the FY
2020 addendum provisions (84 FR 38484) enhanced communication during
the admission process and prompted hospice providers to ensure patients
are receiving all services necessary for symptom management regardless
of the primary diagnosis. However, the feedback also included reports
that very few patients and their representatives had requested the
addendum and that the burden of implementation of the addendum
outweighed the benefit.
In the FY 2024 Hospice Wage Index and Payment Rate Update proposed
rule (88 FR 20022), we solicited feedback on how to work with hospice
providers to ensure Medicare beneficiaries and their families are aware
of coverage under the hospice benefit and how to enhance transparency.
Comments discussed in the FY 2024 Hospice Wage Index and Payment Rate
Update final rule (88 FR 51164) emphasized the critical need for CMS
education directed toward patients and families about transitioning
from curative to palliative interventions at the time of hospice
admission. Specifically, several commenters suggested that the hospice
election statement addendum (titled ``Patient Notification of Hospice
Non-Covered Items, Services, and Drugs'') should be provided to all
patients at the time of hospice election or as part of the care plan,
rather than only upon request. Commenters noted that hospice providers,
non-hospice providers, Medicare beneficiaries, and their families need
more information to understand coverage distinctions and that hospice
providers must share this information with patients at the time of, and
throughout, hospice election.
Based on the FY 2022 feedback from interested parties indicating a
low volume of requests, the continued growth in non-hospice spending,
and the FY 2024 feedback from interested parties requesting mandatory
provision of the addendum at the time of election, we are proposing to
require that hospices provide the hospice election statement addendum
to all Medicare beneficiaries at the time of hospice election for
hospice elections beginning on or after October 1, 2026. We would
require hospices to furnish the addendum within the first 5 days of a
hospice election (that is, within the first 5 days of the effective
date of the hospice election), and any updates to the addendum within 3
days of changes
[[Page 17358]]
to the plan of care that impact the addendum determinations, in
writing, to the individual (or representative), and to make the
addendum available for non-hospice providers and Medicare contractors.
This proposal would modify the current requirement at Sec.
418.24(b)(6), (c), and (d), which establishes the addendum as a
condition of payment only when requested by beneficiaries, their
representatives, non-hospice providers, or Medicare contractors. As
such, we propose amending Sec. 418.24 to include the previously stated
provisions related to making the hospice addendum mandatory at the time
of hospice election. We remind that hospices may provide the election
statement addendum in any format that best suits their needs, provided
that the content requirements at Sec. 418.24(b) and (c) are met (85 FR
47070); however, if desired, a model hospice election statement
addendum is available on the Hospice Center web page at https://www.cms.gov/Center/Provider-Type/Hospice-Center.
As discussed in the FY 2020 Hospice Wage Index and Payment Rate
Update and Hospice Quality Reporting Requirements final rule (84 FR
38484), and again in section V.A. of this proposed rule, hospices are
already required to make determinations about related versus unrelated
conditions, items, and services as part of their comprehensive
assessment and care planning processes. The mandatory addendum
requirement would formalize and standardize the communication of these
existing determinations to beneficiaries and their representatives. A
one-time form development burden estimate was completed in FY 2020
hospice final rule (84 FR 38484). This burden estimate also accounted
for the approximate amount of time it would take a hospice to complete
the addendum and used the assumption that hospices would provide the
addendum to all beneficiaries; it reflected an estimated $11.2 million
in total costs to hospice providers. Despite the FY 2020 (84 FR 38484)
burden estimates including the one-time addendum form development
costs, the burden estimate reflected an estimated $5.2 million net
reduction in total provider (that is, hospice provider and non-hospice
provider) burden. In addition, the FY 2020 (84 FR 38484) burden
estimates for all non-hospice providers (institutional, non-
institutional, and Part D pharmacy providers) furnishing services to
hospice beneficiaries were estimated to have an $8.2 million total
reduction in burden with the availability of the addendum. In the FY
2020 hospice final rule (84 FR 38535), we stated that burden would be
reduced for non-hospice providers, including institutional, non-
institutional and pharmacy providers because less time would be spent
trying to obtain needed information for treatment decisions and
accurate claims submissions.
While the burden estimates completed in FY 2020 (84 FR 38484)
already assumed that hospices would provide the addendum to all
beneficiaries, we have updated the burden estimates, in section V.A.1.
of this proposed rule, with more recent data that reflects the increase
in hospices and hospice elections on the estimated hospice burden
associated with the proposed mandatory election statement addendum for
all elections; this includes a burden reduction estimate for non-
hospice providers. The FY 2027 burden estimates continue to demonstrate
a significant total overall burden reduction for non-hospice providers
of $40.6 million, as well as a net hospice provider burden reduction of
$20.8 million.
We solicit comments on this proposal.
D. Proposed Clarifying Regulation Text Changes
1. Discharge From Hospice Care
In the FY 2025 Hospice Wage Index and Payment Rate Update, Hospice
Conditions of Participation Updates, and Hospice Quality Reporting
Program Requirements final rule (89 FR 64202), we finalized conforming
text changes to align the medical director CoP and the hospice payment
requirements. Specifically, we amended Sec. 418.102(b) by adding the
physician member of the hospice interdisciplinary group (IDG), as
defined in Sec. 418.56(a)(1)(i), as an individual who may provide the
initial certification of terminal illness. We also amended the medical
director CoP in Sec. 418.102(c) to include the medical director, or
physician designee, as defined at Sec. 418.3, if the medical director
is not available, or physician member of the IDG among the specified
physicians who may review clinical information as part of the
recertification of the terminal illness. Further, to align payment
regulations regarding the certification of the terminal illness and
admission to hospice care under Sec. Sec. 418.22 and 418.25 with the
CoPs at Sec. 418.102, we added ``physician designee (as defined in
Sec. 418.3)'' to clarify that when the medical director is not
available, a physician designated by the hospice, who is assuming the
same responsibilities and obligations as the medical director, may
certify terminal illness and determine admission to hospice care. We
clarified that this does not connote a change in policy; rather, we
stated that we believe aligning the language at Sec. Sec. 418.22(c)
and 418.25 with the CoPs at Sec. 418.102 allows for greater clarity
and consistency between key components of hospice regulations and
policies (89 FR 64231).
In response to comments received on the proposed amendments to
Sec. Sec. 418.22 and 418.25, in the FY 2025 proposed rule (89 FR
64202) to add physician designee to the hospice certification and
admission payment policies, we again agreed with commenters who stated
that our regulations at Sec. 418.25 identifying which physicians can
determine admission to hospice care should be consistent with those at
Sec. 418.22 identifying who can provide the certification of terminal
illness. Accordingly, in the FY 2026 Hospice Wage Index and Payment
Rate Update, Hospice Conditions of Participation Updates, and Hospice
Quality Reporting Program Requirements final rule (90 FR 37416), to
align with the updated payment and CoP regulations at Sec. Sec.
418.22(c)(1)(i) and 418.102(b), respectively, we finalized the addition
of ``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 stated 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
consistency between key components of hospice regulations and policies.
We note that Sec. 418.26(b) requires that prior to discharging a
patient for any reason listed in Sec. 418.26, the hospice must obtain
a written physician's discharge order from the hospice medical
director. To align with the updated payment regulations at Sec. Sec.
418.22, 418.102(b), and 418.25(a) and (b) and to create greater
consistency between key components of hospice regulations and policies,
we are proposing conforming additions to Sec. 418.26(b) to state the
hospice may also obtain the written physician's discharge order from
the physician designee, as defined at Sec. 418.3, or physician member
of IDG. We request comments on the proposed additions to Sec.
418.26(b).
2. Face-to-Face Encounter
Section 6209(f)(1)(A) of the CAA, 2026 amended section
1814(a)(7)(D)(i)(II) of the Act to extend the use of telehealth by a
hospice
[[Page 17359]]
physician or hospice nurse practitioner to conduct a face-to-face
encounter for the sole purpose of recertifying the patient's
eligibility for hospice, through December 31, 2027. Additionally,
section 6209(f)(1)(B) of the CAA, 2026 amended section
1814(a)(7)(D)(i)(II) of the Act to include a prohibition on the use of
telehealth to conduct the face-to-face encounter in the case of such an
encounter with an individual occurring on or after January 31, 2026, if
such individual is located in an area that is subject to a moratorium
on the enrollment of hospice programs under this title pursuant to
section 1866(j)(7) of the Act, if such individual is receiving hospice
care from a provider that is subject to enhanced oversight under this
title pursuant to section 1866(j)(3) of the Act, or if such encounter
is performed by a hospice physician or nurse practitioner who is not
enrolled under section 1866(j) of the Act and is not an opt-out
physician or practitioner. Section 6209(f)(2) of the CAA, 2026 amended
section 1814(a)(7)(D)(i)(II) of the Act to require (for face-to-face
encounters conducted via telehealth occurring on or after January 1,
2027) that hospice claims include one or more modifiers or codes (as
specified by the Secretary) to indicate that such encounter was
conducted via telehealth.
In accordance with section 6209(f) of the CAA, 2026, we propose
amending Sec. 418.22(a)(4)(ii) to align with the provisions described
previously. The regulatory language would require the hospice to
collect data reflecting face-to-face encounters furnished using
telecommunications technology, which 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, and the hospice would do so by
reporting a G-code identifying that a face-to-face encounter was
furnished using such technology, that is, telehealth. We are soliciting
comments on these proposed amendments and on the use of the new G-code
identifying face-to-face encounters furnished via telehealth. The
proposed coding requirement will enable CMS to enforce the prohibition
on the use of telehealth to conduct the face-to-face encounter when the
circumstances described in section 6209(f)(1)(B) of the CAA, 2026 are
present because we will be able to identify those face-to-face
encounters conducted via telehealth. We would not require that in-
person face-to-face encounters for the purposes of recertification to
be collected on claims. In accordance with section 6209(h) of the CAA,
2026, we would issue further subregulatory guidance on implementation
of this provision, including the exclusion from this permissible use of
telehealth, via a Change Request (CR).
E. Requests for Information on Medicare Services and Payment Structure
1. Request for Information on Ways To Enhance the Provision of
Palliative Care Outside of Hospice Care: Current Coverage, Billing
Practices, and Opportunities for Improvement
Palliative care is often thought of in concert with hospice care;
however, it is not mutually exclusive to the end of life. Medicare
defines palliative care as patient and family-centered care that
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 (Sec. 418.3). The Medicare hospice benefit provides
comprehensive interdisciplinary palliative care once a patient is
certified as having a life expectancy of 6 months or fewer; however,
many palliative care patients are not yet ready or eligible for
hospice. Therefore, as palliative care is a method of care delivery
that is provided throughout the continuum of illness, it can be
furnished under various Medicare benefits prior to a beneficiary's
decision to elect hospice care. In particular, community-based
palliative care plays an essential role in improving the quality of
life for individuals living with serious illness. The home is an ideal
environment for individuals to receive palliative care services, as
remaining in the home during a serious illness may help alleviate
psychological and mental distress and allow for more intimate
caregiving to be provided by family members. Although Medicare does not
currently offer a dedicated palliative care benefit, because palliative
services are offered across existing Medicare programs, we are
interested in soliciting public feedback regarding ways in which we can
optimize current coverage and billing practices under various
outpatient or home-based benefits to result in more cohesive,
integrated, person-centered care as beneficiaries approach hospice
care. Understanding how Medicare providers currently support palliative
care, how providers bill for these services, and where gaps persist is
critical to strengthening community-based palliative care within
today's regulatory and payment structure.
Although Medicare covers many services that are core to palliative
care, coverage can be indirect. Most community palliative care services
fall under Medicare Part B, which reimburses for reasonable and
medically necessary outpatient care. Medicare Part B also supports
access to mental and behavioral health services, including counseling
provided by clinical social workers, and rehabilitation therapies such
as physical, occupational, and speech therapy aimed at reducing symptom
burden and maintaining function. Telehealth, expanded in recent years,
further enhances access to palliative expertise for homebound or
mobility-limited patients. Medicare Part B also covers certain medical
supplies and equipment needed for palliative care, such as oxygen and
wheelchairs.
While Medicare Part A primarily covers inpatient services, it does
provide limited outpatient-related support. Care delivered in hospital
outpatient departments may be covered, as well as home health services
for patients who are homebound and require skilled care. These
benefits, though not palliative-specific, can provide essential
nursing, social work, aide, and therapy support that aligns with
palliative goals.
Medicare Part D further contributes to outpatient palliative care
by covering prescription medications for symptom management, such as
analgesics, antiemetics, and anxiolytics.
Understanding Billing Practices and Delivering Palliative Care
Because Medicare does not recognize palliative care as a distinct
billable service, providers must rely on a variety of codes and benefit
categories. Physicians and advanced practice providers typically bill
evaluation and management (E/M) visits for outpatient or home-based
palliative encounters. Clinicians may provide symptom management,
chronic disease support, advance care planning (ACP), and behavioral
health care through standard E/M visits or specialized billing codes.
For example, ACP services are reimbursable through CPT codes 99497 and
99498, allowing providers to conduct structured discussions about
patient values, goals, and treatment preferences. Similarly, chronic
care management (CCM), complex CCM, principal care management (PCM),
and transitional care management (TCM) codes support ongoing
coordination of care, which is central to high-quality
[[Page 17360]]
palliative care for complex conditions. Code Z51.5 Encounter for
Palliative Care can be used; however, it does not specify what services
this code encompasses. These codes also may not reflect the time-
intensive nature of holistic, interdisciplinary palliative care. We are
interested in understanding how community providers bill for palliative
services, which CPT or HCPCS codes they rely on, and what barriers they
face in using ACP, care management, or telehealth codes. Specifically:
Do the E/M codes, care management codes, and ACP codes
represent the majority of the billing codes providers use to capture
community palliative care services?
What services are typically provided when Z51.5 is billed?
Are there challenges in meeting documentation requirements
or integrating non-billable team members, such as social workers,
chaplains, or nurses who are crucial to palliative care delivery?
Is there uncertainty about compliance requirements or
concern that billing for palliative care will result in claims denials?
What non-medical services, such as caregiver training or
spiritual care, would most benefit patients if reimbursed? And what
enhancements to existing benefits (not requiring legislation) could
strengthen palliative care? These might include expanding social worker
billing privileges or creating standardized codes or definitions for
serious-illness care.
Understanding Program and Beneficiary Needs
Gathering information from providers and beneficiaries is essential
to identify how outpatient or community palliative care is currently
provided under Medicare and where gaps remain. In addition to providing
feedback on billing practices, interested parties can offer insight
into broader systemic challenges, staffing limitations, claim denials,
and palliative services they provide but cannot bill for under
Medicare's current structure. Specifically:
What aspects of palliative care are financially
unsustainable for providers?
What documentation requirements do providers typically
use, or suggest using, to identify the provision of palliative care?
Do providers commonly refer patients for home health
services when a patient needs palliative care concurrently with
curative or life-sustaining care?
What services do providers typically offer patients who
are not eligible or ready to elect hospice care but require palliative
services?
The Path Forward
Medicare's current structure provides several pathways for
delivering community palliative care; however, these programs may seem
siloed, making it difficult for patients to understand how palliative
services are provided outside of the hospice benefit. Interested party
feedback is essential for guiding CMS toward policies that expand
access to high-quality community palliative care without requiring
legislative reform or the creation of an entirely new benefit. By
gathering detailed input from those who deliver and manage palliative
care services, we can better understand how to strengthen community
palliative care under existing benefits. In addition to the questions
previously listed, we are soliciting input on any additional targeted
enhancements within current benefits, such as expanding billable
services, simplifying documentation, standardizing definitions, or
increasing beneficiary education that could meaningfully expand access
to palliative care services. As the population ages and the prevalence
of serious illness grows, refining how Medicare supports community
palliative care, prior to hospice care, is both a practical necessity
and an opportunity to enhance the well-being of millions of
beneficiaries.
2. Request for Information Regarding Construction of a Hospice Specific
Wage Index
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, as
determined by the Secretary, in accordance with sections 1814(i)(1)(A)
and 1814(i)(2)(D) of The Act. As described in the FY 1998 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. Additionally, our regulations at Sec. 418.306(c)
require that each labor market 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.
However, CMS has received numerous comments regarding the use of
the Inpatient Prospective Payment System (IPPS) wage index to adjust
for the geographic variation of wages for hospice staff through the
annual hospice rulemaking. Specifically, commenters have stated that
the IPPS wage index uses data from four FYs prior to the current
payment year and that the time lag may underestimate the changes in
relative wages for hospice staff. Commenters have also stated that
hospitals may have different labor costs and occupational mix than
hospices and have requested that, like inpatient hospitals, hospices be
able to reclassify their wage index in some instances. Additionally, we
have received feedback opposing our proposals to adopt the new revised
OMB CBSA delineations and the wage index values assigned to their
geographic areas, wage index values assigned to rural areas, and
adjusting wage index differences between high wage index and low wage
index hospices in adjacent local areas through exceptions.
We have also received recommendations from MedPAC to include all-
employer, occupation-level wage data to establish different weights for
setting-specific occupational labor mix to capture labor costs faced by
all employers of the related occupations. In 2007 and 2022, MedPAC
proposed using the BLS for wage data and to construct new wage indexes
to more accurately reflect local area differences in labor costs
between and within MSAs and statewide rural areas.11 12
Following the MedPAC analysis, a CMS-commissioned study issued in 2009
concluded that despite some limitations, BLS wage information is more
accurate and reliable than the current source of wage information.\13\
In a separate commissioned study from the Institute of Medicine (IOM),
the committee examined ways to improve the accuracy of data sources and
methods used for making the adjustments to payment to reflect
geographic variation in labor prices.\14\
---------------------------------------------------------------------------
\11\ MedPAC, Report to Congress, 2007, p.124-125.
\12\ MedPAC, Report to Congress, 2023, p.386.
\13\ MaCurdy et al., Revision of Medicare Wage Index.
\14\ Committee on Geographic Adjustment Factors in Medicare
Payment; Board on Health Care Services; Institute of Medicine;
Edmunds M, Sloan FA, editors. Geographic Adjustment in Medicare
Payment: Phase I: Improving Accuracy, Second Edition. Washington
(DC): National Academies Press (US); 2011 Jun 1. Available at
https://www.ncbi.nlm.nih.gov/books/NBK190070/ doi: 10.17226/13138.
---------------------------------------------------------------------------
In response to these numerous, ongoing comments from interested
parties regarding the hospice wage
[[Page 17361]]
index, we have examined possible alternatives to using the IPPS wage
index for geographically adjusting hospice payments. We note that other
non-hospital settings have also investigated using alternatives to the
IPPS wage index, as hospital cost reports may not be representative of
the occupations relative to the post-acute care settings. Most
recently, in the CY 2025 End Stage Renal Disease (ESRD) PPS final rule
(89 FR 89116), we finalized changes to the ESRD PPS wage index using
BLS Occupational Employment and Wage Statistics (OEWS) data.
Furthermore, in the 2023 Report to the Congress, MedPAC recommended
using county-level wage data from the BLS with an occupational mix to
construct a wage index that is more specific to the payment
setting.\15\
---------------------------------------------------------------------------
\15\ MedPAC, Report to Congress, 2023, p.386.
---------------------------------------------------------------------------
CMS hosted a Technical Expert Panel (TEP) on September 10, 2025,
inviting 14 participants representing various interested parties
including industry associations, academia, and hospices, to seek
feedback on a proposed alternative to the current hospice wage index.
We also provided a technical report for the TEP panelists that gave
additional details regarding the potential methodology that could be
used to construct a new hospice specific wage index and preliminary
results for how specific hospices would be impacted. The TEP summary
report, which summarizes the discussion and recommendations of the TEP,
as well as the TEP technical report, which provides a detailed
examination of the discussed alternative approaches, may be found at
https://www.cms.gov/medicare/payment/prospective-payment-systems/hospice/hospice-educational-resources. In this proposed rule, we are
looking for feedback on how the BLS OEWS data, and other public data
can be used to construct a hospice specific wage index.\16\ CMS
requests input to understand the advantages and limitations of the
suggested approach in using BLS data and cost reports to support the
construction of a hospice specific wage index. In addition, as
discussed elsewhere in the Federal Register, we note that we are also
considering the potential use of alternative data sources in other
payment systems including the Inpatient Rehabilitation Facilities (IRF)
PPS and Skilled Nursing Facilities (SNF) PPS. We seek feedback on the
unique considerations applicable to hospices that should inform how CMS
considers the potential use of alternative data sources. We are seeking
comment on the following suggested components of how a new hospice
specific wage index would be constructed:
---------------------------------------------------------------------------
\16\ https://www.bls.gov/respondents/oes/instructions.htm#online.
---------------------------------------------------------------------------
(1) Source data for determining area wages: When considering a
source for wage data, we believe it is important that the data used is
public to promote transparency, such that relevant interested parties
would have access to the data and can conduct their own analyses. The
IPPS hospital wage index is updated annually, based on a survey of
wages and wage-related costs of short-term, acute care hospitals, as
required by section 1886(d)(3)(E) of the Act. The final FY 2026 hospice
wage index is 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 (using FY 2022 cost report
data).
The BLS OEWS data provides MSA-level wage data for health
professionals, including clinical and administrative office staff, that
is updated annually using a pooled sample of six semi-annual
surveys.\17\ BLS OEWS data includes information on the wages that
employers paid to their employees. It does not include self-employed
contract labor wages or benefits paid to employees.
---------------------------------------------------------------------------
\17\ https://www.bls.gov/oes/current/oes_tec.htm.
---------------------------------------------------------------------------
The hospice specific wage index would also include the use of
freestanding hospice cost reports, claims, and Census Bureau population
data. We would only be using freestanding hospice cost reports to
ensure cost accuracy, as facility-based reports may share costs with
the larger facility. Claims data is used to retrieve the total minutes
of care delivered by the seven different disciplines of care (physical
therapy, occupational therapy, speech language pathology, skilled
nursing, medical social service, and home health aide) that are
currently billed as visits on the claims form. Census Bureau population
data is used to calculate weighted averages when aggregating wage data.
(2) Occupational mix weights: In the IOM study, the committee
recommended using a fixed national set of weights based on the hours of
each occupation employed nationwide. When considering the construction
of a hospice specific wage index, we need to better understand how
hospices currently employ staff and determine what would be appropriate
for using as fixed national weights. We want to gather feedback on
relevant occupational categories to include in this calculation, which
may include billable occupations, such as aides, registered nurses,
licensed practical nurses, nurse practitioners, nurse assistants,
medical social workers, physicians, occupational therapists, physical
therapists, and speech pathologists. Since the full-time equivalent
hours for the occupations are not reported in hospice cost reports, we
would need to estimate using the most complete claims data available.
The occupational mix determines how much weight each occupation's
wage receives in the overall calculation of the wage level for each
geographic area and the national level. Our suggested approach uses
expenses reported in hospice cost reports and minutes reported in
hospice claims data for 10 occupational categories (hospice aide,
registered nurses, nursing administration, physician services, licensed
practical nurse, licensed vocational nurse, medical social services,
nurse practitioner, physical therapy, occupational therapy, and speech
language pathology) shown in Table 11. Three occupations are available
on cost reports but not claims (Nursing Administration, Physician
Services, Nurse Practitioner). Those three occupations accounted for
22.05 percent of costs on the cost report and their share of the
occupational mix was set to this percentage. The remaining 77.95
percent of the occupational mix was allocated among the other seven
occupations based on their respective shares of minutes from claims
data. We seek input on this suggested approach, as well as any other
potential methodologies.
[[Page 17362]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.012
(3) Hospice Specific Wage Index Construction: Similar to as
described in the CY 2025 ESRD PPS final rule (89 FR 89104), we could
construct a wage index for each CBSA by calculating an hourly wage for
each CBSA (reflecting a weighted average of the occupational mix) and
dividing by the aggregate hourly wage (reflecting a weighted average of
the occupational mix). The specific computational steps used to
calculate the new ESRD PPS wage index were provided in the
supplementary document Addendum C of the CY 2025 ESRD PPS proposed
rule.\18\ In the following sections we present a potential methodology
for constructing a potential hospice specific wage index:
---------------------------------------------------------------------------
\18\ https://www.cms.gov/files/document/addendum-c-cms-1805-p-esrd-pps-proposed-wage-index-construction-methodology.pdf.
---------------------------------------------------------------------------
Step 1: Estimate the Hospice National Average Occupational Mix
We would use the combination of the share of costs from cost
reports and share of minutes from claims to develop a hospice national
occupational mix (as shown in Table 11).
Step 2: Calculate Occupation-Specific, CBSA-Level Wage Estimates
To determine how hourly wages in an area compare with national wage
levels for specific occupations, we would calculate a CBSA-level wage
estimate for each occupation included in the hospice labor mix. The
hourly wages provided in areas available in the BLS data do not exactly
align with the CBSAs and state-wide rural areas for which wage index
values are calculated, therefore we would first map the BLS data to
counties. We then impute missing wage estimates at the county-level.
Wages for an area could be missing due to small sample size or data
quality issues. Finally, we would aggregate county-level hourly wage
estimates to the CBSA level using a county population-weighted average
of the county-level wage estimates.
Step 3: Calculate Cross-Occupation, CBSA-Level Wage Estimates
For each CBSA, we calculate an average wage by multiplying the
occupation-specific, CBSA-level wages by the hospice national
occupational mix percentage (that is, registered nurse hourly wage
times the 28.46 percent in Table 11) and then summing the wages for all
occupations in Table 11. This is the numerator for the CBSA's hospice
specific wage index value before adjustments.
Step 4: Calculate the Cross-Occupation, National Wage Estimate
We would calculate the cross-occupation, national wage estimate,
which is the denominator of the hospice specific wage index value
before adjustments. We calculate a national weighted average of each
occupation-specific wage estimate by weighting the occupation-specific
wage estimate in each CBSA by the population in a CBSA. We would then
weight the national averages by the share in the national occupational
mix to obtain a cross-occupation, national wage estimate.
Step 5: Calculating Initial Hospice Wage Index Values
The initial hospice wage index value for each CBSA would be
calculated by dividing the cross-occupation, CBSA-level wage estimate
from Step 3 by the cross-occupation, national wage estimate from Step
4.
Step 6: Adjustments to the Initial Wage Index Values
We would recalibrate to ensure center of distribution equals the
center of the legacy wage index. We would then apply the hospice floor
and 5 percent cap on decreases to calculate the final hospice wage
index.
We seek feedback on any steps that may need to be modified to be
applicable to the data available for hospices and related occupations.
(4) Labor market areas: The final FY 2026 hospice wage index does
not consider any geographic reclassification of hospitals, including
those in accordance with section 1886(d)(8)(B) or 1886(d)(10) of the
Act. The final FY 2026 hospice wage index includes a 5 percent cap on
wage index decreases. The appropriate wage index value would 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 wage index value is applied to the labor portion
of the payment rate based on the geographic location of the facility
for beneficiaries receiving GIP or IRC. MedPAC recommended applying the
wage index to a blend of MSA/statewide rural and counties as geographic
delineation to set wage index values and smooth wage index differences
greater than 10 percent between adjacent areas.\19\ Currently, county
information is not
[[Page 17363]]
available to examine geographic variation of hospice labor costs.
---------------------------------------------------------------------------
\19\ https://www.medpac.gov/wp-content/uploads/2022/07/Wage-index-March-2023-SEC.pdf.
---------------------------------------------------------------------------
For the purposes of constructing a hospice specific wage index, we
are seeking feedback on the level of geographic delineation of labor
market area to be applied to a new wage index and considerations for
when neighboring areas have large differences in wage index values. In
past rules, we have stated that 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. While we continue to hold this
belief, we seek feedback from interested parties on what other
delineation would be appropriate and what data sources could be used to
support the changes.
(5) Transition policy: We seek feedback on what an appropriate
transition policy may be when shifting from a wage index using hospital
IPPS wage data to a hospice specific wage index using BLS wage data.
We appreciate hospices and national organizations sharing their
support and commitment to offering meaningful comments for
consideration. In addition to the methodological questions, we solicit
public comment on the following questions:
What data sources and changes should be considered to
develop a wage index specific for hospices?
What are the advantages of the suggested approach to
constructing wage indexes, relative to the current system?
What are the main limitations of the suggested approach?
Can any limitations be addressed through changes to the
data sources mentioned, such as cost reports and claims?
What occupations should be included in the occupational
mix to estimate geographic differences in expected prices to employ
healthcare staff in hospices?
What additional labor categories, if any, should be added
to cost reports to support the revision of the hospice wage index? Are
any other changes to the cost reports required for this purpose?
How should we appropriately compare wages between
geographic areas that match the way hospice services are delivered?
Should we maintain the use of CBSA, or consider other geographic
delineation, such as county, census area, etc.?
How should we reduce large differences in wage index
values for adjacent geographic areas?
How should we consider policy to support the transition
between the current hospice wage index approach to a new one?
3. Request for Information Regarding Medical Aid in Dying (MAID)
The Assisted Suicide Funding Restriction Act of 1997 (Pub. L. 105-
12, April 30, 1997) prohibits the use of Federal funds (through
Medicare, Medicaid, and other Federal programs) 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, sometimes
referred to as ``medical aid in dying'' (MAID).\20\ This law amended
section 1862(a) of the Act (exclusions from coverage and Medicare as
secondary payor) by adding a new paragraph (16) to the list of programs
for which no payment may be made under Part A or Part B. CMS codified
the exclusion of assisted suicide from coverage in regulation at Sec.
411.15(q). This regulation clarifies that the prohibition does not
pertain to the withholding or withdrawing of medical treatment or care,
nutrition or hydration or to the provision of a service for the purpose
of alleviating pain or discomfort, even if the use may increase the
risk of death, so long as the service is not furnished for the specific
purpose of causing death. MAID is not legal under Federal law; however,
it is considered an end-of-life option for terminally ill adults to
self-administer life-ending medication prescribed by a physician in
certain states where it is allowed under State law. It is currently
legal in 11 states and Washington, DC, and under these existing State
laws, strict criteria require a prognosis of 6 months or less to live.
More states are passing laws allowing MAID, creating new challenges for
hospices and other providers that participate in Federal health
programs on how to navigate relevant State and Federal laws.
---------------------------------------------------------------------------
\20\ CMS notes that entities must also comply with Section 1553
of the Affordable Care Act. Section 1553 prohibits the Federal
Government, and any State or local government or health care
provider that receives Federal financial assistance under the ACA,
or any health plan created under the ACA from discriminating against
an individual or health care entity on the basis that the individual
or entity does not provide any health care item or service for
assisted suicide, euthanasia, or mercy killing. Section 1553
clarifies it does not apply to withholding or withdrawing medical
treatment or medical care, nutrition or hydration, abortion, or use
of item or service to alleviate pain or discomfort withholding or
withdrawing of medical treatment or care, nutrition or hydration or
to the provision of a service for the purpose of alleviating pain or
discomfort, even if the use may increase the risk of death, so long
as the service is not furnished for the specific purpose of causing
or assisting in causing, death, for any reason.
CMS also notes that covered entities violate 42 U.S.C. 14406 if
they interpret 42 U.S.C. 1395cc(f) or 1396a(w) to require covered
entities or their employees ``to inform or counsel any individual
regarding any right to obtain an item or service furnished for the
purpose of causing, or the purpose of assisting in causing, the
death of the individual, such as by assisted suicide, euthanasia, or
mercy killing; or to apply to or to affect any requirement with
respect to a portion of an advance directive that directs the
purposeful causing of, or the purposeful assisting in causing, the
death of any individual, such as by assisted suicide, euthanasia, or
mercy killing.'' 42 U.S.C. 14406.
The Office for Civil Rights investigates complaints related
conscience statutes such as Section 1553, 42 U.S.C. 14406, or
religious nondiscrimination provisions. See https://www.hhs.gov/conscience/your-protections-against-discrimination-based-on-conscience-and-religion/index.html.
---------------------------------------------------------------------------
Because of State requirements (where MAID is allowed under State
law) that a patient be terminally ill, we are interested in hearing
from hospice providers and other interested parties about any issues
that may arise when a Medicare hospice patient requests MAID. In
particular:
What information do hospice providers give to these
patients and how often is there overlap when a patient pursues MAID? In
other words, do hospices generally continue to provide clinical care
while a patient seeks qualification for MAID and do patients generally
remain on service until death?
Conversely, do hospices encourage patients to revoke their
election if they choose to utilize MAID?
Is there confusion amongst hospices regarding visits or
other comfort measures that can be provided during this process,
especially on the day of death?
Do hospices have written policies regarding caring for
patients using MAID? We are especially interested in understanding what
hospices do with any unused lethal medications prescribed for MAID.
We wish to reiterate that no Medicare funds, including hospice
payments, may be used to facilitate MAID, including physician
consultation services, prescribing or dispensing of medications used
for the purpose of causing death, or assistance with the ingestion of
such medications. As such, we are also requesting information on any
additional CMS oversight mechanisms that should be in place to
safeguard the use of Federal funds for the provision of MAID items and
services. We welcome any additional information regarding hospices'
experience with patients choosing to utilize MAID, with the expectation
that hospice providers and staff are adhering to Federal law.
[[Page 17364]]
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 Outcomes and
Patient Assessment Evaluation (HOPE) 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 provided
for that FY. In the FY 2024 Hospice final rule (88 FR 51164), 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 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 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 would 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 would 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/meaningful-measures-initiative.
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
[[Page 17365]]
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.
The FY 2026 Hospice Wage Index final rule provided updates on the HOPE
instrument and public reporting.
Table 12 shows the current quality measures in effect for the FY
2027 HQRP, which were updated and finalized in the FY 2025 Hospice Wage
Index and Payment Rate Update final rule.
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TP06AP26.013
BILLING CODE 4120-01-C
2. Updates Regarding the HOPE Measures
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 implemented on
October 1, 2025. 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).
As finalized in the FY 2025 Hospice Wage Index final rule (89 FR
64202), public reporting of the HOPE quality
[[Page 17366]]
measures would be implemented no earlier than FY 2028. CMS still
expects to begin public reporting in November 2027, but this may change
based on the quality and reportability of the data as determined by the
CMS analysis of CY 2026 data, which would begin in CY 2027.
To meet the assessment timeliness threshold under the Annual
Payment Update (APU), hospices must achieve a timely submission rate of
90 percent or higher for FY2027. This means that 90 percent of all HIS
and/or HOPE assessments must be submitted to, and accepted by, CMS
within 30 days of the patient's admission or discharge date. For HIS
assessments, the reporting period is based on the submission of HIS
admission or discharge assessments between January 1, 2025, and
September 30, 2025. HOPE assessments began submission on October 1,
2025; therefore, the reporting period is based on the submission of the
HOPE admission, discharge, and/or HOPE Update Visit (HUV) assessments
between October 1, 2025, and December 31, 2025.
Due to the newness of the HOPE assessment along with the migration
to the iQIES platform, CMS has granted a waiver to all HOPE assessments
dated October 1, 2025, through December 31, 2025, and as a result, all
HOPE assessments with a target date in 2025 will be considered timely.
3. Proposal To Add an Icon for Hospices on Medicare.gov Compare Tool To
Indicate Failure To Meet Reporting Requirements
Since the creation of the Medicare.gov Compare Tool (https://www.medicare.gov/care-compare/) in 2020, CMS has made improvements to
the information available to consumers to drive quality improvement
among care settings. Due to the unique challenge of caring for patients
in their last days of life, the HQRP has very few publicly reported
measures compared to other care settings. Therefore, this lack of
information in comparison can make it more challenging for consumers to
differentiate between hospices when searching for end-of-life care. To
help provide additional information and context to consumers, while
also serving to highlight non-compliant hospices, we are proposing to
add an icon identifying hospice facilities, on the Medicare.gov Compare
Tool, that have failed to meet reporting requirements for the HQRP.
The proposed icon will identify hospices failing to submit any data
or submitting less than the required 90 percent of HOPE submissions
within 30 days of the patient's admission or discharge date within a
year period. Despite the APU penalty increase from 2 percent to 4
percent in Fiscal Year (FY) 2024, we have not observed a significant
improvement in the number of hospices meeting the QRP reporting
requirements. In FY 2023, prior to the APU percentage increase to 4
percent, 20.07 percent of hospices were found to be non-compliant with
the HIS reporting requirements. In FY 2024, the first year of the 4
percent APU penalty, 22.06 percent of hospices were found to be non-
compliant. In FY 2025, the percentage of non-compliant hospices
increased to 23.53 percent and in FY 2026 the percentage of non-
compliant hospices was 20.37 percent. The consistent lack of data for
approximately one-fifth of hospices limits the ability of CMS to
accurately measure the quality of care provided by hospices and limits
the amount of data available to a consumer. We are proposing to add an
icon to provide an incentive for hospices to comply with the quality
data submission requirements, while also communicating to consumers
that CMS may not have enough data to adequately determine the quality
of the hospice.
We propose to add the icon to the Medicare.gov Compare Tool no
earlier than FY 2028 (October 1, 2027) to align with the addition of
HOPE data to the Medicare.gov site, and the data will be based on CY
2026 APU submission data received from January 1, 2026, through
December 31, 2026. The proposed icon will be added or removed on an
annual basis to give hospices an ample amount of time to review and
correct data, and to comply with the 90 percent threshold. The proposed
icon would be visible both on the provider search page, as well as the
individual hospice page on the Compare Tool, similar to how the icons
appear for nursing homes and hospitals on the Medicare.gov site.
Additional information will be added to the Compare Tool to ensure
consumers are aware of what the icon means and how it should be taken
into consideration. The aim of the icon would be to notify consumers
that the hospice did not report sufficient data to CMS. Additional
information about HQRP reporting requirements and APU penalty can be
found on the HQRP Requirements and Best Practices website at https://www.cms.gov/medicare/quality/hospice/hqrp-requirements-and-best-practices. We invite public comment on our proposal to include an icon
for hospices on the Medicare.gov Compare Tool to identify hospices that
do not comply with the quality data submission requirements for the
APU.
4. Future Measures Update
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) HVLDL; and (2) 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.
A Technical Expert Panel (TEP) convened in November 2024 provided
input on potential new or potential HCI indicators and based on that
feedback. This report can be found at https://www.cms.gov/files/document/fall-2024-hqrp-tep-summary-report508c.pdf. Based on this
feedback, along with input from other interested parties and additional
analysis of the measure and its indicators, CMS is currently
considering making changes to the HCI measure and plans to submit the
updated measure to the 2026 MUC list. The aim of re-specifying the HCI
measure is to make it more useful and important to providers and
consumers.
5. 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
[[Page 17367]]
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) 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) 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 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).\21\ 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.
---------------------------------------------------------------------------
\21\ 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 13
summarizes the three timeframes. It illustrates how the CY interacts
with the FY payments, covering the CY 2025 through CY 2028 data
collection periods and the corresponding APU application from FY 2027
through FY 2030. Please note that for the final quarter of CY 2025, CMS
has granted a waiver to all HOPE assessments dated October 1, 2025
through December 31, 2025, and as a result, all HOPE assessments with a
target date in 2025 will be considered timely.
[GRAPHIC] [TIFF OMITTED] TP06AP26.014
As illustrated in Table 13, CY 2025 data submissions compliance
impacts the FY 2027 APU. CY 2026 data submissions compliance impacts
the FY 2028 APU. CY 2027 data submissions compliance impacts FY 2029
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 applied the same submission requirements for HOPE admission,
discharge, and up to two hospice update visit (HUV) records. 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 14, HQRP Compliance Checklist, illustrates the APU and
timeliness threshold requirements.
BILLING CODE 4120-01-P
[[Page 17368]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.015
BILLING CODE 4120-01-C
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/hospice.
Available trainings can be found on the HQRP Training and Education
Library web page at https://www.cms.gov/medicare/quality/hospice/hqrp-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.
V. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-
3520, we are required to provide notice in the Federal Register and
solicit public comment before a collection of information requirement
is submitted to the Office of Management and Budget (OMB) for review
and approval. To fairly evaluate whether an information collection
should be approved by OMB, 44 U.S.C. 3506(c)(2)(A) requires that we
solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
We are soliciting public comment on each of these issues for the
following sections of this document that contain information collection
requirements (ICRs):
A. Wage Data Used for the Proposed Mandatory Election Statement
Addendum
To derive average (mean) costs, we are using data from the most
current U.S. Bureau of Labor Statistics' (BLS's) National Occupational
Employment and Wage Estimates for all salary estimates (https://www.bls.gov/oes/tables.htm). In this regard, Table 15 below outlines
BLS's mean hourly wage, our estimated
[[Page 17369]]
cost of fringe benefits and other overhead costs (calculated at 100
percent of salary), and our adjusted hourly wage. Table 15 contains our
wage rate data for the proposed mandatory Election Statement Addendum:
``Patient Notification of Hospice Non-Covered Items, Services, and
Drugs'' discussed in section III.B. of this proposed rule.
[GRAPHIC] [TIFF OMITTED] TP06AP26.016
B. Proposed Information Collection Requirements (ICRs)
1. Proposed Burden Related to Mandatory Election Statement Addendum:
``Patient Notification of Hospice Non-Covered Items, Services, and
Drugs'' (OMB Control Number: 0938-1067/Expiration date: 2/28/2029)
[GRAPHIC] [TIFF OMITTED] TP06AP26.017
Section 1814(a)(7) of the Act requires that for the first 90-day
period of a hospice election, the individual's attending physician (as
defined in section 1861(dd)(3)(B) of the Act) (which for purposes of
this subparagraph does not include a nurse practitioner or a physician
assistant), and the medical director (or physician member of the
interdisciplinary group (IDG) described in section 1861(dd)(2)(B) of
the Act) of the hospice program providing (or arranging for) the care,
each certify in writing, at the beginning of the period, that the
individual is terminally ill (as defined in section 1861(dd)(3)(A) of
the Act). The regulations codified at Sec. Sec. 418.22 and 418.25
provide the requirements regarding the certification of terminal
illness and admission to hospice care. The hospice medical director
must specify that the individual's prognosis is for a life expectancy
of 6 months or less if the terminal illness runs its normal course.
Additionally, clinical information and other documentation that support
the medical prognosis must accompany the certification and must be
filed in the medical record with the written certification. The
physician must include a brief narrative explanation of the clinical
findings that supports a life expectancy of 6 months or less as part of
the certification. The aforementioned regulations also require that the
hospice medical director must consider both related and unrelated
conditions and current clinically relevant information when making the
decision to certify the individual as terminally ill. Likewise, the
hospice CoPs at Sec. 418.102(b) provide the requirements regarding the
certification responsibility of the hospice medical director or hospice
physician designee, which includes a review of the clinical
information, including both related and unrelated conditions, for each
hospice patient.
To receive hospice services under the Medicare hospice benefit,
eligible beneficiaries must elect to receive hospice care by completing
an election statement. By signing this election statement, the
individual acknowledges that he/she waives all rights to Medicare
payments for treatment related to the terminal illness and related
conditions. The required content of the hospice election statement is
outlined in part below and described in Sec. 418.24(b):
Identification of the particular hospice and of the
attending physician that will provide care to the individual. The
individual or representative must acknowledge that the identified
attending physician was his or her choice.
[[Page 17370]]
The individual's or representative's acknowledgement that
he or she has been given a full understanding of the palliative rather
than curative nature of hospice care, as it relates to the individual's
terminal illness.
Acknowledgement that certain Medicare services, as set
forth in Sec. 418.24(d), are waived by the election.
The effective date of the election, which may be the first
day of hospice care or a later date but may be no earlier than the date
of the election statement.
The signature of the individual or representative.
Once a beneficiary is certified as terminally ill and elects the
Medicare hospice benefit, the hospice conducts an initial assessment
visit in advance of furnishing care. During this visit, the hospice
must provide the patient or representative with verbal and written
notice of the patient's rights and responsibilities as required by the
CoPs at Sec. 418.52. Likewise, the regulations at Sec. 476.78 state
that providers must inform Medicare beneficiaries at the time of
admission, in writing, that the care for which Medicare payment is
sought will be subject to Quality Improvement Organization (QIO)
review.
The beneficiary needs identified in the initial and comprehensive
assessments drive the development and revisions of an individualized
written plan of care for each patient as required by the hospice CoPs
at Sec. 418.56. The hospice plan of care is established, reviewed, and
updated by the hospice IDG and must include all services necessary for
the palliation and management of the terminal illness and related
conditions. While needs unrelated to the terminal illness and related
conditions are not the responsibility of the hospice, the hospice may
choose to furnish services for those needs regardless of
responsibility. However, if a hospice does not choose to furnish
services for those needs unrelated to the terminal illness and related
conditions, the hospice is to communicate and coordinate with those
health care providers who are caring for the unrelated needs, as
described in Sec. 418.56(e). In accordance with the CoPs, the hospice
must document the services and treatments that address how they will
meet the patient and family-specific needs related to the terminal
illness and related conditions in the plan of care, and those needs
unrelated to the terminal illness and related conditions that are
present when the patient elects hospice should also be documented. This
documentation ensures that the hospice is aware of those unrelated
needs and who is addressing them. This documentation provides the
support for the hospices' financial responsibility for the hospice
services they will be providing. There is limited beneficiary financial
liability for hospice services upon election of the Medicare hospice
benefit. However, for any services received that are unrelated to the
terminal illness and related conditions, the beneficiary would incur
any associated copayments and coinsurance.
Hospices already are required to review, determine, and document
information on unrelated conditions per the hospice regulations and
CoPs. The FY 2020 hospice final rule (84 FR 38484) finalized the
requirement at Sec. 418.24(b) and (c) for an election statement
addendum titled ``Patient Notification of Hospice Non-Covered Items,
Services, and Drugs'' that must be issued to the patient (or
representative), upon request, within 5 days of the hospice election
date, or within 3 days of the request during the course of hospice care
(that is, after the first 5 days of the hospice election date), to
ensure that Medicare beneficiaries are fully informed whether or not
all items, services, and drugs identified on the hospice plan of care
will be furnished by the hospice. The addendum statement is not
required if the beneficiary dies within the required timeframe for
furnishing the addendum. This addendum accompanies the hospice election
statement. This requirement for payment is codified in the regulations
at Sec. 418.24(b) and (c).
To ensure Medicare beneficiaries are provided disclosure of those
conditions, items, services, and drugs the hospice has determined to be
unrelated to the terminal illness and related conditions at the time of
admission, we propose to make the issuance of the hospice election
statement addendum, in writing, mandatory for all elections at the time
of election, rather than upon request of the beneficiary (or
representative). Currently, the regulations at Sec. 418.24(b) and (c),
require the election statement addendum titled ``Patient Notification
of Hospice Non-Covered Items, Services, and Drugs'' to be issued to the
individual (or representative) upon request. We are proposing that the
issuance of the hospice election statement addendum would be mandatory
for all elections made on or after October 1, 2026, and would accompany
the hospice election statement at the time of hospice election.
A one-time burden estimate for each hospice to develop and design
their own addendum template to best meet their needs was completed in
the FY 2020 hospice final rule (84 FR 38484). In the same rule, we also
estimated the hospice's burden to complete the addendum; however, we
will update these burden estimates to account for changes in the number
of hospice elections and number of hospices. As mentioned in the FY
2020 final rule (84 FR 38484), we believe there is no associated burden
for hospices to communicate/coordinate with non-hospice providers
regarding the content of the addendum statement because the hospice
CoPs, as described above, have always required hospices to have a
system of communication with non-hospice providers in place. However,
we believe that making the election statement addendum mandatory would
reduce burden for non-hospice providers through a consistent and
streamlined process by which non-hospice providers can make informed
treatment decisions and accurately submit claims with the appropriate
condition code or modifier. This requirement for payment is included in
regulations at Sec. 418.24(b) and (c).
The relevant information collection requirements are currently
approved under OMB Control Number: 0938-1067/Expiration date: 2/28/
2029.
C. Estimated Hospice Burden Related to Mandatory Election Statement
Addendum
1. Estimated Time for Hospice To Complete Addendum
In accordance with the hospice CoPs at Sec. 418.56(a), the hospice
must designate a registered nurse that is a member of the IDG to
provide coordination of care and to ensure continuous assessment of
each patient's and family's needs and implementation of the
interdisciplinary plan of care. The hospice CoPs at Sec. 418.54
require that a registered nurse conduct the initial assessment,
therefore, the registered nurse would be responsible for completing the
addendum for each hospice election as part of the routine admission
paperwork. We estimate that there would be 1,873,148 hospice elections
in a year based on FY 2024 claims data. However, if a beneficiary dies
within the first five days of the hospice election, an addendum would
not be required to be provided. Approximately, 19 percent (0.19) of
hospice beneficiaries die within the first five days of hospice care.
Therefore, the estimated total number of hospice elections in FY 2027
that would require the hospice election statement addendum would be
(1,873,148 x 0.81)
[[Page 17371]]
= 1,517,250. There are 6,732 Medicare-certified hospices, so on average
there would be (1,517,250/6,732) = 225 hospice elections per hospice.
The estimated burden for the hospice registered nurse to extrapolate
this information from the existing documentation in the patient's
hospice medical record and complete this addendum would be 10 minutes
(10/60 = 0.1667). At $78.68 per hour for a registered nurse over 10
minutes (0.1667 x $78.68 = $13.12), we estimate the total cost of RN
time to complete the addendum per hospice in FY 2027 to be ($13.12 x
225) = $2,952.00, and the total cost of RN time to complete the
addendum for all hospices in FY 2027 would be ($2,952.00 x 6,732) =
$19,872,864.00. The estimated total per hospice and total annual
hospice cost associated with the proposed mandatory addendum in FY 2027
are shown in Table 17. These total costs only include the cost for the
RN to complete the addendum statement, as a one-time burden estimate
for the addendum form development was accounted for in FY 2020 (84 FR
38484). Additionally, providing this information to the beneficiary is
currently part of the routine admissions process and, as such, incurs
no additional burden to that process.
[GRAPHIC] [TIFF OMITTED] TP06AP26.018
2. Burden Estimate Without Election Statement Addendum for Non-Hospice
Providers
In order for non-hospice providers to make treatment decisions
regarding services, items, and drugs for hospice beneficiaries and to
submit the appropriate modifier or condition code on Medicare claims,
they need supporting information from the hospice regarding related and
unrelated conditions. As such, we first estimate the current burden
associated with this communication and coordination in the absence of
the election statement addendum. We believe this would require the non-
hospice providers to contact the hospice and have a detailed phone call
to obtain and document the information on unrelated conditions, items,
services, and medications. For non-hospice providers submitting
institutional claims (including inpatient acute care hospitals, SNFs,
HHAs, and institutional outpatient providers), typically nurse case
managers provide coordination of care for those beneficiaries in these
settings who are receiving inpatient services or who are preparing to
transition to a post-acute care setting or home. The estimated burden
for the registered nurse to contact the hospice to obtain the needed
information would be 15 minutes (15/60 = 0.25). The average number of
hospice beneficiaries receiving services per institutional, non-hospice
provider is 15.6 per year, which would mean each institutional, non-
hospice provider would have an average of 15.6 communication encounters
with hospice. The total number of institutional, non-hospice providers
servicing hospice beneficiaries in FY 2024 was 24,086. At $78.68 per
hour for a registered nurse (0.25 x $78.68) = $19.67, we estimate the
total cost per institutional, non-hospice provider furnishing services
to hospice beneficiaries in FY 2027 to be ($19.67 x 15.6) = $306.85 and
the annual total cost for all institutional, non-hospice providers in
FY 2027 would be ($306.85 x 24,086) = $7,390,789.10.
For non-institutional, non-hospice providers (including
physicians), we also expect that a nurse would contact the hospice to
obtain the needed clinical information on unrelated conditions, items,
services and drugs. The estimated burden for the registered nurse to
contact the hospice to obtain the needed information would be 15
minutes (15/60 = 0.25). The average number of hospice beneficiaries
receiving services per non-institutional, non-hospice provider is 15.5
per year, which would mean each provider would have an average of 15.5
communication encounters with a hospice. The total number of non-
institutional, non-hospice providers servicing hospice beneficiaries in
FY 2024 was 135,407. At $78.68 per hour for a registered nurse (0.25 x
$78.68) = $19.67, we estimate the total cost per non-institutional,
non-hospice provider furnishing services to hospice beneficiaries in FY
2027 to be ($19.67 x 15.5) = $304.89 and the annual total cost for all
non-institutional, non-hospice providers in FY 2027 would be ($304.89 x
135,407) = $41,284,240.23.
For pharmacies dispensing Part D drugs to hospice beneficiaries,
the estimated burden for the pharmacy technician at the point of
service to contact the hospice to obtain the needed clinical
information regarding the drugs deemed by the hospice as unrelated to
the terminal illness and related conditions would be 15 minutes (15/60
= 0.25). The average number of hospice beneficiaries receiving services
per pharmacy dispensing Part D maintenance drugs is 18.6 per year,
which would mean each pharmacy would have an average of 18.6
communication encounters with hospice. The total number of pharmacies
dispensing Part D maintenance drugs to hospice beneficiaries in FY 2024
was 57,642. At $45.80 per hour for a pharmacy technician (0.25 x
$45.80) = $11.45, we estimate the total cost per pharmacy dispensing
Part D maintenance drugs to be ($11.45 x 18.6) = $212.97 and the annual
total cost for all pharmacies dispensing Part D maintenance drugs to be
($212.97 x 57,642) = $12,276,016.74. The estimated total annual burden
for
[[Page 17372]]
all non-hospice providers furnishing services, items and medications to
hospice beneficiaries in FY 2027 without the availability of the
hospice election statement addendum identifying unrelated conditions,
items, services and drugs would be $60,951,046.07 ($7,390,789.10 +
$41,284,240.23 + $12,276,016.74).
3. Burden Reduction Estimate With the Proposed Mandatory Election
Statement Addendum for Non-Hospice Providers
With the availability of the ``Patient Notification of Hospice
Covered/Non-Covered Items, Services, and Drugs'' election statement
addendum, we believe the estimated burden would be reduced for non-
hospice providers through a streamlining of the communication and
coordination process. Following the same approach used in FY 2020 (84
FR 38484), we analyzed all Medicare Parts A and B non-hospice claims
for beneficiaries under a hospice election in FY 2024. We also examined
the Part D claims for drugs provided to hospice beneficiaries under a
hospice election. Specifically, we analyzed the following:
The total number of non-hospice, institutional claims with
condition code 07 (to indicate the services were unrelated to the
terminal illness and related conditions).
The total number of non-hospice, non-institutional claims
with ``GW'' modifier (to indicate the services were unrelated to the
terminal illness and related conditions).
The total number of Part D claims for beneficiaries under
a hospice election.
The average number of hospice beneficiaries per non-
hospice provider with institutional claims with condition code 07.
The average number of hospice beneficiaries per non-
hospice provider with non-institutional claims with ``GW'' modifier.
The average number of hospice beneficiaries per non-
hospice provider with Part D claims.
To calculate the average number of hospice beneficiaries per non-
hospice provider, we count the number of unique beneficiaries
associated with each non-hospice provider as beneficiaries may receive
services by more than one non-hospice provider. This means that some
beneficiaries are double-counted. Because we double-counted
beneficiaries, we expect that average to be larger than the ratio of
unique beneficiaries to unique non-hospice providers. Table 18
summarizes Part A, B and D claims that overlap with hospice episodes in
FY 2024.
[GRAPHIC] [TIFF OMITTED] TP06AP26.019
For institutional, non-hospice providers (those who would submit
claims for unrelated services with condition code 07), the estimated
burden for the registered nurse to contact the hospice to obtain the
needed information would be reduced from 15 minutes in the absence of
the addendum to 5 minutes (5/60 = 0.0833). The average number of
hospice beneficiaries receiving services per institutional non-hospice
provider is 15.6 per year. The total number of institutional non-
hospice providers servicing hospice beneficiaries in FY 2024 was
24,068. At $78.68 per hour for a registered nurse (0.0833 x $78.68) =
$6.55, we estimate the total cost per institutional non-hospice
provider in FY 2024 to be ($6.55 x 15.6) = $102.18 and the annual total
cost for all institutional non-hospice providers in FY 2024 would be
($102.18 x 24,068) = $2,459,268.24, an annual decrease in burden by
($7,390,789.10-$2,459,268.24) = $4,931,520.86.
For non-institutional, non-hospice providers (those who would
submit claims for unrelated services with modifier GW), the estimated
burden for the registered nurse to contact the hospice to obtain the
needed information would be reduced to 5 minutes (5/60 = 0.0833). The
average number of hospice beneficiaries receiving services per non-
institutional, non-hospice provider is 15.5 per year. The total number
of non-institutional, non-hospice providers servicing hospice
beneficiaries in FY 2024 was 135,407. At $78.68 per hour for a
registered nurse (0.0833 x $78.68) = $6.55, we estimate the total cost
per non-institutional, non-hospice provider in FY 2024 to be ($6.55 x
15.5) = $101.53 and the annual total cost for all non-institutional,
non-hospice providers in FY 2024 would be ($101.53 x 135,407) =
$13,747,872.71, an annual decrease in burden by ($41,284,240.23-
$13,747,872.71) = $27,536,367.52.
For pharmacies dispensing Part D drugs to hospice beneficiaries,
the estimated burden for the pharmacy
[[Page 17373]]
technician at the point of service to contact the hospice to obtain the
needed clinical information regarding the drugs deemed by the hospice
as unrelated to the terminal illness and related conditions would be
reduced to 5 minutes (5/60 = 0.0833). The average number of hospice
beneficiaries receiving services from pharmacies dispensing Part D
maintenance drugs is 18.6 per year. The total number of pharmacies
dispensing Part D maintenance drugs to hospice beneficiaries in FY 2024
was 57,642. At $45.80 per hour for a pharmacy technicians (0.0833 x
$45.80) = $3.82, we estimate the total cost per pharmacy dispensing
Part D maintenance drugs to be ($3.82 x 18.6) = $71.05 and the annual
total cost for all pharmacies dispensing Part D maintenance drugs to be
($71.05 x 57,642) = $4,095,464.10, an annual decrease in burden by
($12,276,016.74-$4,095,464.10) = $8,180,552.64.
The estimated total annual burden for all non-hospice providers
furnishing services, items, and drugs to hospice beneficiaries in FY
2024 with the availability of the hospice election statement addendum
identifying unrelated conditions, items, services, and medication would
be $20,302,605.05 ($2,459,268.24 + $13,747,872.71 + $4,095,464.10) for
an overall burden reduction of ($60,951,046.07-$20,302,605.05) =
$40,648,441.02. The total reduction in burden for all institutional,
non-institutional, and Part D pharmacy non-hospice providers is
summarized in Table 19.
[GRAPHIC] [TIFF OMITTED] TP06AP26.020
The use of the ``Patient Notification of Hospice Non-Covered Items,
Services, and Drugs'' election statement addendum would result in an
estimated, annual net reduction in burden of $20,775,577.02
($40,648,441.02 - $19,872,864.00) in FY 2027. Table 20 summarizes the
FY 2027 estimated total burden reduction.
[GRAPHIC] [TIFF OMITTED] TP06AP26.021
D. Submission of PRA-Related Comments
We have submitted a copy of this proposed rule to OMB for its
review of the rule's information collection and recordkeeping
requirements. The requirements are not effective until they have been
approved by OMB.
To obtain copies of the supporting statement and any related forms
for the proposed collections previously discussed, visit our website
at: https://www.cms.gov/Regulations-and-Guidance/Legislation/PaperworkReductionActof1995/PRA-Listing.html, or call the Reports
Clearance Office at (410) 786-1326.
We invite public comments on these information collection
requirements. If you wish to comment, submit your comments
electronically as specified in the DATES and ADDRESSES sections of this
proposed rule and identify the rule (CMS-1851-P) and, where applicable,
indicate the ICR's CFR citation, CMS ID number, and OMB control number.
[[Page 17374]]
Comments must be received by the date and time specified in the
DATES section of this proposed rule.
VI. Response to Comments
Because of the large number of public comments, we normally receive
on Federal Register documents, we are not able to acknowledge or
respond to them individually. We will consider all comments we receive
by the date and time specified in the DATES section of this preamble,
and, when we proceed with a subsequent document, we will respond to the
comments in the preamble to that document.
VII. Regulatory Impact Analysis
A. Statement of Need
1. Hospice Payment
This proposed 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
Core Based Statistical Areas (CBSAs) or previously used Metropolitan
Statistical Areas (MSAs), as well as any changes to the methodology for
determining the per diem payment rates. This proposed rule would update
the payment rates for each of the categories of hospice care, described
in Sec. 418.302(b), for FY 2027 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.
2. Hospice Election Statement Addendum
This rule includes a proposal to make the hospice election
statement addendum mandatory for all hospice elections. This proposal
would require hospices to furnish the hospice election statement
addendum within the first 5 days of a hospice election (that is, within
the first 5 days of the effective date of the hospice election), and
any updates to the addendum within 3 days of changes to the plan of
care that impact the addendum determinations, in writing, to the to the
individual (or representative), and to make the addendum available for
non-hospice providers and Medicare contractors. If finalized, this
change would become effective for hospice elections on and after
October 1, 2026. The election statement addendum would add no
additional burden for communicating with non-hospice providers, as this
decision-making process has been a long-standing CoP requirement, as
described in the preamble of this proposed rule. As reviewed in section
V.B.1.of this proposed rule, hospices already are required to review,
determine, and document information on unrelated conditions per the
hospice regulations and CoPs. Additionally, our previous burden
estimate, completed in FY 2020 hospice final rule (84 FR 38484),
assumed that an addendum would be requested by every hospice
beneficiary (or representative) receiving non-hospice services. While
the number of hospice elections, and therefore the number of election
statement addendums, have increased since our last burden estimate was
completed, we continue to believe the actual burden would be less as
hospices are already required to be comprehensive in their approach to
covered services. As such, there would be hospices that would spend
less time, than estimated, to complete the addendum as the hospice
would be providing all items, services, and drugs. However, we believe
that making the election statement addendum mandatory would reduce
burden for non-hospice providers, including institutional, non-
institutional and pharmacy providers because less time would be spent
trying to obtain needed information for treatment decisions and
accurate claims submissions.
3. Quality Reporting Program
This proposed rule would add an icon to the Medicare.gov Compare
Tool to identify hospices that fail to meet the reporting submission
requirements for the Annual Payment Update (APU). These requirements
require hospices to submit 90 percent of HOPE assessments within 30
days of a patient's admission or discharge date. This new icon would
allow consumers to identify hospices that may lack sufficient data to
accurately gauge quality and provide another incentive for hospices to
meet the 90 percent threshold.
B. Overall Impact
We have examined the impacts of this proposed 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).
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.
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.
1. Hospice Payment
We estimate that the aggregate impact of the payment provisions in
this proposed rule would result in an estimated increase of $785
million in payments to hospices, resulting from the proposed hospice
payment update percentage of 2.4 percent for FY 2027. The impact
analysis of this proposed rule represents the projected effects of the
changes in hospice payments from FY 2026 to FY 2027. Using the most
recent complete data available at the time of rulemaking, in this case
FY 2025 hospice claims data as of January 15, 2026, we simulate total
payments using the proposed FY 2027 wage index (pre-floor, pre-
reclassified hospital wage index with the hospice floor, and the 5
percent cap on wage index decreases) and FY 2026 payment rates and
compare it to our simulation of total payments using FY 2025
utilization claims data, the final 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 2026 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
[[Page 17375]]
2026 wage index and payment rates for each level of care by the
proposed FY 2027 wage index and FY 2026 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 Election Statement Addendum
As a result of this election statement addendum, we estimate that
this rule, if finalized, would generate $20.7 million in annualized
cost savings to providers, beginning in FY 2027. The estimated burden
reduction for this proposal is detailed in section V.C. of this
proposed rule and the total annual estimated reduction is included in
Table 20.
3. Hospice Quality Reporting Program
This proposed rule would add an icon to the Medicare.gov Compare
Tool for hospices. There are no associated impacts for hospices with
this proposal.
C. Detailed Economic Analysis
1. Proposed Hospice Payment Update for FY 2027
The FY 2027 hospice payment impacts appear in Table 21. 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 2027 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 2027 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 2.4 percent is
based on the proposed 3.2 percent inpatient hospital market basket
percentage increase reduced by a proposed 0.8 percentage point
productivity adjustment. The fifth column shows the total effect of the
updated wage data and the hospice payment update percentage on FY 2027
hospice payments. As illustrated in Table 21, the combined effects vary
by specific types of providers and by location. We note that simulated
payments are based on utilization in FY 2025 as seen on Medicare
hospice claims (accessed from the Chronic Conditions Warehouse (CCW) on
January 15, 2026) 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 21, the combined effects vary by specific
types of providers and by location.
BILLING CODE 4120-01-P
[[Page 17376]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.022
[[Page 17377]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.023
[[Page 17378]]
BILLING CODE 4120-01-C
D. Regulatory Review Cost Estimation
If regulations impose administrative costs on private entities,
such as the time needed to read and interpret this proposed 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 last year's proposed rule will be the number of
reviewers of this proposed rule. However, we acknowledge that this
assumption may understate or overstate the costs of reviewing this
proposed rule. It is possible that not all commenters reviewed last
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 last year's
proposed rule is a fair estimate of the number of reviewers of this
proposed rule. We welcome any comments on the approach to estimating
the number of entities that will review this proposed rule. We also
recognize that different types of entities are in many cases affected
by mutually exclusive sections of this proposed rule, and therefore for
the purposes of our estimate we assume that each reviewer reads
approximately 50 percent of the rule. We seek comments on this
assumption.
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/home.htm). Assuming an average reading speed we estimate that it
would take approximately 1.76 hours for staff to review half of this
proposed 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 approximately $12,576
($199.62 x 63 reviewers; which is based on last year's comments
received).
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 proposed hospice payment update
percentage. The proposed 2.4 percent hospice payment update percentage
for FY 2027 is based on a proposed 3.2 percent inpatient hospital
market basket percentage increase for FY 2027, reduced by a proposed
0.8 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 2027, 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.
2. Hospice Election Statement Addendum
An alternative to this proposal would be to not make the election
statement mandatory but rather keep the existing policy where the
addendum is only required when requested by the beneficiary, their
representative, non-hospice providers or the Medicare contractors.
However, as described in Section III.C. of this proposed rule, the
intent of the election statement addendum is to increase coverage
transparency for those seeking to elect the benefit. We believe that
only requiring the provision of this addendum when requested does not
fulfill this intent and that all beneficiaries deciding to elect
hospice care in lieu of curative care should have all the information
they need to make informed consent to elect. We also stated our
concerns that the continued and increasing non-hospice spending during
a hospice election may signal that beneficiaries are not being made
aware of hospice coverage responsibility and this may result in
increased beneficiary cost sharing and fragmented care which is counter
to the comprehensive and holistic nature of hospice care.
3. Quality Reporting Program
CMS considered proposing an icon that would indicate if a hospice
does not meet the submission requirements for HOPE, CAHPS, and claims.
However, since claims are required for payment, there is high
compliance, and, as many hospices are exempt from CAHPS due to size
limitations, CAHPS submissions would be excluded for a large number of
hospices so both CAHPS and claims were omitted. CMS also considered
proposing an icon that would indicate if a hospice has met the
submission requirements, however CMS is trying to induce the non-
submitting hospices to change behavior and believe a negative icon will
be more effective than a positive icon. Additionally, creating an
positive icon would also cause, at times, hospices with poor quality
indicators to receive this icon and possibly give mixed messages to the
consumer as to whether the hospice provides good quality of care.
CMS considered proposing a star rating, similar to those seen in
other care settings on the Medicare.gov Compare Tool. However, this
change would require the need for more public feedback and additional
analyses to create a star rating that would accurately reflect the care
a hospice is providing. There was also a desire to not add something to
the Compare Tool that may interfere with the changes that may be made
by the Hospice Special Focus Program (SFP).
F. Accounting Statement and Table
Consistent with OMB Circular A-4 (available at https://www.whitehouse.gov/wp-content/uploads/2025/08/CircularA-4.pdf), we have
prepared an accounting statement in Table 22 showing the classification
of the expenditures associated with the provisions of this proposed
rule. Table 22 provides our best estimate of the possible changes in
Medicare payments under the hospice benefit as a result of the policies
in this proposed rule. This estimate is based on the data for 6,642
hospices in our impact analysis file, which was constructed using FY
2025 claims (accessed from the CCW on January 15, 2026). All
expenditures are classified as transfers to hospices.
[[Page 17379]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.024
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.\22\
Table 23 shows the number of firms, revenue, and estimated impact per
home health care service category. Table 24 shows the number of
nonemployer establishments, total, and average revenue per nonemployer
establishment.
---------------------------------------------------------------------------
\22\ 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.
---------------------------------------------------------------------------
[[Page 17380]]
[GRAPHIC] [TIFF OMITTED] TP06AP26.025
[GRAPHIC] [TIFF OMITTED] TP06AP26.026
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 proposed in this
rule would 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 proposed rule
would 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 2.4 percent or
approximately $785 million in increased revenue to hospices in FY 2027.
The 2.4 percent increase in expenditures when comparing FY 2026
payments to estimated FY 2027 payments is reflected in the last column
of the first row in Table 21 and is driven solely by the impact of the
proposed 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 higher estimated increase (2.6 percent),
compared to hospices with greater than 20,000 RHC days (2.4 percent)
due to the proposed updated wage index. We estimate that in FY 2027,
hospices in urban areas would experience, on average, a 2.3 percent
increase in
[[Page 17381]]
estimated payments compared to FY 2026; while hospices in rural areas
would experience, on average, a 3.0 percent increase in estimated
payments compared to FY 2026. Hospices providing services in the
Outlying region would experience the largest estimated increases in
payments of 3.6 percent. Hospices serving patients in the West South
Central region will experience, on average, the lowest estimated
increase of 2.0 percent in FY 2027 payments. Further detail by hospice
type and location is presented in Table 21. The statement of need for
the various proposed policies in this rule are discussed in section
VII.A. of the RIA. Additionally, the alternatives considered for the
various proposed policies in this rule are discussed in section VII.E.
of the RIA. We considered potential alternatives for the policies
proposed in this rule, including the hospice payment update percentage
and the hospice election statement addendum. Because the hospice
payment update percentage is established annually in accordance with
the statutory requirements of section 1814(i)(1)(C) of the Act, we did
not evaluate alternative approaches for this provision. Similarly, we
did not consider alternatives for the regulatory text revisions, as
these changes either conform to policies already codified in regulation
or are mandated by the Consolidated Appropriations Act, 2026. For the
hospice election statement addendum, the proposed policy is expected to
generate savings for all hospices, including small entities. We also
considered an alternative under which the hospice statement addendum
would be optional rather than mandatory. However, this approach would
likely increase costs for hospices (we consider all hospices small
entities) and would not fulfill the intended objective, as described in
Section III.C. of this proposed rule, of enhancing transparency for
beneficiaries seeking to elect the hospice benefit. We are soliciting
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 603 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
23).
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 $193 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
proposed rule, if finalized as proposed, is expected to be an E.O.
14192 deregulatory action. We estimate that this proposed rule would
generate -$16.98 million in annualized cost savings at a 7 percent
discount rate, discounted to relative to 2024, over a perpetual time
horizon.
K. Conclusion
We estimate that aggregate payments to hospices in FY 2027 will
increase by $785 million as a result of the 2.4 percent proposed
hospice payment update, compared to payments in FY 2026. We estimate
that in FY 2027, hospices in urban areas would experience, on average,
a 2.3 percent increase in estimated payments compared to FY 2026; while
hospices in rural areas would experience, on average, a 3.0 percent
increase in estimated payments compared to FY 2026. Hospices providing
services in the Outlying region would experience the largest estimated
increases in payments of 3.6 percent. Hospices serving patients in the
West South Central region will experience, on average, the lowest
estimated increase of 2.0 percent in FY 2027 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 March 30, 2026.
List of Subjects in 42 CFR Part 418
Health facilities, Hospice care, Medicare, Reporting and
recordkeeping requirements.
For the reasons set forth in the preamble, the Centers for Medicare
& Medicaid Services proposes to amend 42 CFR 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 paragraph (a)(4)(ii) 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 December 31, 2027, 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 telecommunications technology and is
considered an administrative expense. Telecommunications technology
means the use of interactive multimedia communications equipment that
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. For
face-to-face encounters occurring on or after January 1, 2027, hospices
must report any such encounters occurring via telecommunications
technology on the claim, in accordance with guidance issued by CMS.
Beginning January 31, 2026, telehealth may not be used for the face-to-
face recertification encounter if any of the following conditions
apply:
[[Page 17382]]
(A) The hospice patient is located in an area subject to a hospice
enrollment moratorium under section 1866(j)(7) of the Act;
(B) The patient is receiving care from a hospice provider that is
subject to enhanced oversight pursuant to section 1866(j)(3) of the
Act; or
(C) The face-to-face encounter is conducted by a hospice physician
or nurse practitioner who is not enrolled in Medicare under section
1866(j) and is not an opt-out physician or practitioner (as defined in
section 1802(b)(6)(D) of the Act.
* * * * *
0
3. Section 418.24 is amended by revising paragraphs (b)(6), (c)
introductory text, (c)(9) and (10), and (d) to read as follows:
Sec. 418.24 Election of hospice care.
(b) * * *
(6) For Hospice elections beginning on or after October 1, 2026,
the hospice must provide the individual (or representative) an election
statement addendum, as set forth in paragraphs (c) and (d) of this
section, which includes any conditions, items, services, and drugs the
hospice has determined to be unrelated to the individual's terminal
illness and related conditions and would not be covered by the hospice.
* * * * *
(c) Content of hospice election statement addendum. For hospice
elections beginning on or after October 1, 2026, the hospice must
provide the individual (or representative) an election statement
addendum. The election statement addendum (and its updates) must
include the following:
* * * * *
(9) Name and signature of the individual (or representative) and
date signed, along with a statement that signing this addendum (and its
updates) is only acknowledgement of receipt of the addendum and not the
individual's (or representative's) agreement with the hospice's
determinations. If the individual (or representative) refuses to sign
the addendum, the hospice must document on the addendum the reason the
addendum was not signed and the addendum would become part of the
patient's medical record. The addendum must also be available for non-
hospice providers and Medicare contractors, although non-hospice
providers and Medicare contractors are not required to sign the
addendum.
(10) Date the hospice furnished the addendum to the individual (or
representative).
(d) Timeframes for the hospice election statement addendum. (1) For
hospice elections beginning on or after October 1, 2026, the hospice
must provide the individual (or representative) an election statement
addendum, in writing, as set forth in paragraph (c) of this section, at
the time of the hospice election (that is, within the first 5 days of
the effective date of the hospice election). The hospice must also file
this information with the election statement, as set forth in
paragraphs (a) and (b) of this section, to be available for the
individual (or representative), non-hospice providers, and Medicare
contractors.
(2) If there are any changes to the plan of care during the course
of hospice care that impact the addendum determinations, the hospice
must update the addendum, within 3 days, with the contents described in
paragraph (c) of this section, and provide these updates, in writing,
to the individual (or representative), as well as update the addendum
on file in order to communicate these changes to the individual (or
representative), non-hospice providers, and Medicare contractors.
(3) If the individual dies, revokes, or is discharged within the
required timeframe for providing the addendum (and its updates) (as
outlined in paragraphs (d)(1) and (2) of this section), and before the
hospice has provided the addendum (and its updates), the addendum would
not be required to be provided, in writing, to the individual (or
representative). The hospice must note the reason the addendum (and its
updates) was not completed and/or provided, in writing, to the
individual (or representative) and this note would become part of the
patient's medical record. If completed, the hospice must still file the
addendum (and its updates) with the election statement, as set forth in
paragraphs (a) and (b) of this section, to be available for the
individual (or representative), non-hospice providers, and Medicare
contractors.
(4) If the individual dies, revokes, or is discharged prior to
signing the addendum (or its updates) (as outlined in paragraphs (d)(1)
and (2) with the required contents described in paragraph (c) of this
section), the addendum would not be required to be signed in order for
the hospice to receive payment. The hospice must note (on the addendum
itself) the reason the addendum (and any updates) was not signed and
the addendum would become part of the patient's medical record.
* * * * *
0
4. Section 418.26 is amended by revising paragraph (b) to read as
follows:
Sec. 418.26 Discharge from hospice care.
* * * * *
(b) Discharge order. Prior to discharging a patient for any reason
listed in paragraph (a) of this section, the hospice must obtain a
written physician's discharge order from the hospice medical director
(or physician designee, as defined at Sec. 418.3) or physician member
of the interdisciplinary group. If a patient has an attending physician
involved in his or her care, this physician should be consulted before
discharge and his or her review and decision included in the discharge
note.
* * * * *
Sec. 418.309 [Amended]
0
5. Section 418.309 is amended in paragraphs (a)(1) and (2) by removing
``2033'' and adding in its place ``2035''.
Robert F. Kennedy, Jr.,
Secretary, Department of Health and Human Services.
[FR Doc. 2026-06604 Filed 4-2-26; 4:15 pm]
BILLING CODE 4120-01-P