April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the Hospice Wage Index and Payment Rate Update proposed rule for fiscal year (FY) 2027, which annually updates the Medicare hospice payment rate and the aggregate cap amounts paid to hospice providers.
For FY 2027, CMS proposes a 2.4% payment increase, an estimated $785 million in additional payments, and would raise the hospice cap to approximately $36,210 per beneficiary, an estimated 2.4% increase from FY 2026. The rule also updates the Hospice Quality Reporting Program, in which hospices that fail to submit the required data would receive a 4-percentage-point reduction, resulting in a net 1.6% payment reduction, and beginning FY 2028, CMS proposed adding a Medicare Care Compare icon for hospices that are non-compliant. Finally, the rule maintains the current wage index methodology while updating geographic classifications and while also strengthening oversight through new measures like the Service and Spending Variation Index (SSVI) and required election statement addenda. Comment by June 1.