Congress and federal agencies have been examining the prospect of adjusting – or overhauling – hospice reimbursement systems.
This is based on introduced pieces of legislation and a series of government reports from agencies like the Government Accountability Office (GAO), the U.S. Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services Office of the Inspector General (OIG). The Medicare Payment Advisory Commission (MedPAC) has also chimed in.
This represents a larger trend in the federal government, Katie Wehri, vice president of policy, quality and compliance for the National Alliance for Care at Home said. Wehri made these remarks during a session at the Alliance’s Annual Conference.
“As we continue to talk about payment reform and benefit reform, you’re going to see this theme not just at the congressional level, but with CMS and other oversight bodies who have this strong interest in modernizing the entire benefit,” Wehri said. “It’s not just changes to the payment structure. We’re talking about changes to the hospice program itself, such as how care is delivered, where respite care can be delivered.”
On the legislative front is the Hospice Care Accountability, Reform, and Enforcement Act (Hospice CARE Act). First introduced in 2024 by Rep. Earl Bluemauer (D-Ore.), and this year reintroduced by Rep. Linda T. Sánchez (D-Calif.) in the House and Sen. Mark Warner (D-Va.) in the Senate.
The bill is unlikely to pass this Congress due to the forthcoming midterm elections, but it demonstrates that government authorities have hospice payment reform on the brain.
Though the bill and the organizations’ comments are extensive, a key feature of the legislation is proposed changes to the hospice per diem payment system.
Among the changes would be a reduction in hospice daily rates and the addition of a per-visit payment for clinical services to ensure that hospices are delivering appropriate care to patients.
If enacted, the bill would also create a payment add-on for high-acuity palliative services like chemotherapy, radiation, blood transfusions and dialysis.
Changes to other processes, such as cost reports, may also be necessary in order to implement a fundamentally different payment model. Cost reports could form the basis for setting payment rates in a new model, but many providers contend that a good number of them are inaccurate.
The Hospice CARE Act is not the only bill meant to effect payment reform. U.S. Reps. Mike Kelly (R-Penn.) and Suzan DelBene (D-Wash.) introduced the Concurrent Care for Comfort Act, designed to ensure that hospice patients can receive dialysis treatment.
The Concurrent Care for Comfort Act would clarify Medicare coverage policies for palliative dialysis and establish separate reimbursement for these services when provided by renal dialysis facilities and other qualified providers to certain individuals who have elected hospice care.
Meanwhile, the GAO has recommended that hospices be paid for routine home care on a per-visit basis rather than a per diem.
The agency made the recommendation in a report released earlier this year. Medicare spent $27.5 billion on hospice care in 2024. A per-visit rate would have reduced this number by $7.6 billion, according to GAO.
In response to the report, Reps. Richard E. Neal (D-Mass.) and Linda T. Sánchez (D-Calif.) in a joint statement said that updates are needed to the Medicare Hospice Benefit.
“With Medicare hospice spending nearly doubling over the past decade, Congress has a responsibility to ensure payments reflect the care patients actually receive and we’ve long suspected that some providers are falling short,” Neal and Sánchez said in the statement. “Today’s report confirms that updates are necessary to root out bad actors, reward high-quality providers, and ensure that the Medicare program is efficiently spending taxpayer dollars on hospice care.”
MedPAC also is mulling potential hospice payment reforms to better allow for high-acuity palliative services like dialysis, radiation, chemotherapy and blood transfusions.
MedPAC took up the issue at its September meeting and reported its findings to Congress in June 2026. The commission is considering three potential payment mechanisms:
- An outlier payment system in which Medicare would pay a portion of the costs above a fixed loss amount to providers for offering these services
- A guaranteed add-on payment for those services
- A case-mix adjustment that pays a higher bundled per diem for hospices that use high-acuity palliative services
CMS is also mulling the creation of a hospice-specific wage index. The agency included a request for information (RFI) in its recent 2027 hospice proposed rule.
“It’s because the wage index is such an important part, but it’s based on hospital costs, not hospice costs. We’re competing with hospitals, and we have a completely different makeup in many areas than hospitals,” Wehri said. “CMS is even looking at should there be a hospice-specific wage index, and they had a request for information about that recently. And they’ve also put together a technical expert panel on that.”
Also, CMS should consider certain hospice patients a “high-risk area” in their eligibility reviews, according to OIG.
In these reviews, Medicare Administrative Contractors (MACs) failed to consider new hospice patients who had no inpatient or emergency room utilization in the 18 months before entering hospice care, OIG reported. Had MACs focused more on these patients, CMS could have saved an estimated $255.1 million in hospice claim payments.
“We recommend that CMS work with the hospice MACs to consider this high-risk area in their hospice eligibility reviews and possibly develop pre- or postpayment review procedures for new hospice enrollees who did not have inpatient or emergency room claims 18 months prior to starting hospice care, which could have saved an estimated $255.1 million during our audit period,” OIG indicated in the report.
On top of these developments, interest continues to germinate around bringing hospice care into Medicare Advantage.
Rep. David Schweikert (R-Ariz.) this year introduced the Medicare Advantage Reform Act. If enacted, the bill, numbered H.R. 3467, would make wholesale changes to the Medicare Advantage (MA). A key provision of the bill is a proposed requirement that MA plans pay for hospice care.
A previous attempt to test hospice within MA ended several years ago – the hospice component of the Value-Based Insurance Design Model (VBID). The Center for Medicare & Medicaid Innovation’s experiment ended in 2024 due to costs, “operational difficulties” and other roadblocks, CMS reported.
“There is still this focus on our system. We’ve got to save money in our system with the silver tsunami and all the other reasons that we have cost increases … There’s also an interest, depending on what administration there is,” Wehri said. “They have different goals and different areas of interest, and current administration has a strong interest in Medicare Advantage. Congress has an interest in hearing more about how hospice could work in Medicare Advantage. MedPAC has brought it up in some recent discussions.”
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