CMS Releases 2027 Proposed Hospice Rule Amid Anti-Fraud Enforcement Actions

On April 2, 2026, the Centers for Medicare & Medicaid Services (CMS) released its Financial Year (FY) 2027 Hospice Proposed Rule (CMS-1851-P, factsheet, press release), which includes proposed updates to reimbursement and policies affecting hospice agencies starting January 1, 2027. 

Get ready for the 2027 changes with proactive audit readiness by embedding compliance into everyday workflows. Learn how in our upcoming free webinar: Audit-Proofing Your Hospice: Practical Ways to Prevent Denials and Navigate Scrutiny.

2.4 Percent Payment Increase “Barely Keeps Up With Inflation”

CMS has proposed to update the hospice rate by 2.4 percent, an increase of about $785 million in payments over the current fiscal year. The 2027 proposed hospice cap for beneficiaries is $36,210, an increase of $841 over the 2026 cap ($35,361). 

The 2.4 percent increase is the same rate increase proposed for skilled nursing facilities (SNFs) and inpatient rehabilitation facilities (IRFs); however, the modest increase attracted the ire of Linda Couch, Senior Vice President, Policy, LeadingAge. She states, “The rule’s proposed payment rate update of 2.4 percent barely keeps up with inflation. Payment that scarcely covers the cost of services delivered threatens the ability of quality-focused, mission-driven providers to deliver needed care and potentially limits access for those who seek it.” 

An Emphasis on Quality Reporting and Compliance

CMS proposed adding an icon to the Hospice Compare website to indicate which hospices have not met their data requirements. CMS stated its concern that the number of hospice agencies in non-compliance has increased in the past year (by 1 percent), despite doubling the penalty for non-reporting in FY 2024. Hospice organizations that fail to meet data-reporting requirements also face a 1.6 percent reduction in payments.

Anti-Fraud Measures Now Extended to a Total of Six US States

CMS Administrator Dr. Mehmet Oz discussed several moves the agency is making to combat fraud and increase accountability. In the CMS press release, he stated the agency’s goals and added two new states to its enhanced oversight program:

“Hospices exist to help Americans die peaceful, dignified deaths, not to line the pockets of fraudsters. These new transparency measures will make it easier for CMS and others to identify hospice providers that misuse Medicare dollars, cut off their funding, and refer them to law enforcement for criminal prosecution. [...] Enhanced oversight in four states with elevated fraud risk—Arizona, California, Nevada, and Texas—has resulted in more than 200 hospice Medicare enrollment revocations for failure to comply with CMS requirements. CMS has since expanded this targeted oversight approach to additional states, including Georgia and Ohio.” 

Administrator Oz also discussed new analyses of non-hospice spending and the introduction of a hospice service and spending variation index (SSVI) designed to improve the agency’s oversight of spending. 

Mandatory Hospice Election Statement Addendum

In the proposed rule, CMS expressed concern that hospice agencies are not providing the Hospice Election Statement Addendum to all patients, but are providing it only to those who request it, even though this is the current requirement. CMS proposed to make the addendum mandatory for all patients, stating that the goal is to decrease out-of-pocket spending for the beneficiary and to ensure that they are appropriately informed of their benefits.

Jennifer Sheets, CEO of the National Alliance for Care at Home, stated, “The Alliance appreciates the increased oversight and transparency proposals, but calls on CMS to carefully implement these measures to avoid unintended consequences for patients and providers.” Many other advocates have come out similarly in support of the efforts, while also urging caution and have asked CMS not to sweep up legitimate agencies in anti-fraud efforts. 

Medbridge Tips to Navigate the 2027 Hospice Proposed Rule

We’re here to help with resources and action plans that will help you proactively prepare for the changes that could be coming in 2027 and stay audit-ready and compliant today.

1. Mandatory Election Statement Addendum

The Update: CMS proposes making the Addendum mandatory for every election, starting October 1, 2026, and moving away from the "upon request" model. You must provide it within five days of the election.

• Primary Course: The Admission Process: The Hospice Medicare Election and Addendum 

• Secondary Course: Hospice Discharge and Revocation

• Action Plan: Assign these to your Admissions Nurses and Intake Coordinators. 

2. Anti-Fraud & The SSVI Index

The Update: CMS is introducing the Service and Spending Variation Index (SSVI). It tracks "non-hospice spending," live discharges, and "minutes of care." High variation scores will trigger audits.

• Primary Course: Fraud, Waste, and Abuse Prevention for Clinical Staff

• Primary Course: Fundamentals of Effective Hospice Documentation 

• Microlearning: Professional Boundaries in Home Health and Hospice 

• Action Plan: Focus on Documentation Accuracy. 

3. Quality Reporting (The "Shame" Icon)

The Update: CMS will add a specific icon to Hospice Care Compare for agencies that fall below the 90 percent data submission threshold.

• Recorded Webinar: Hospice Quality Reporting Program: Where Quality Meets Compliance 

• Article/Video: Preparing for HOPE: The Future of Hospice Quality Reporting

• HOPE Training: IDT Team Series

• Action Plan: Have your Quality Assurance (QA) and Leadership teams watch the HQRP webinar. 

4. State-Specific "Enhanced Oversight"

The Update: If you operate in Arizona, California, Nevada, Texas, Georgia, or Ohio, you are in a "high-risk" zone for hospice enrollment revocations.

• Tool: Medbridge Compliance Library

• Action Plan: Create a "High-Oversight Compliance Track" for staff in these states. 
  

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