Hospice Wage Index and Payment Update for FY2027

Content

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.

1. 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: hospicepolicy@cms.hhs.gov.

For questions regarding the CAHPS® 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 § 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-

  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 § 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 § 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 § 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 § 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 (§ 418.22(b)(1)). The regulations at § 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 § 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 § 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
§ 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 (§ 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

  the benefits of, a service, program, or activity of a covered entity. [(1)]()

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)

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 § 418.306(c) require each labor market to be established using the most current hospital wage data available, including
any changes made by the Office of Management and Budget (OMB) to Metropolitan Statistical Area (MSA) definitions.

In general, OMB issues major revisions to statistical areas every 10 years based on the results of the decennial census. On
July 21, 2023, OMB issued Bulletin No. 23-01, which updated and superseded OMB Bulletin No. 20-01, issued on March 6, 2020.
OMB Bulletin No. 23-01 established revised delineations for the MSAs, Micropolitan Statistical Areas, Combined Statistical
Areas (CSAs), and Metropolitan Divisions, collectively referred to as Core Based Statistical Areas (CBSAs). According to OMB,
the delineations reflect the 2020 Standards for Delineating Core Based Statistical Areas (the “2020 Standards”), which appeared
in the
Federal Register
(86 FR 37770 through 37778) on July 16, 2021, and application of those standards to Census Bureau population and journey-to-work
data (for example, 2020 Decennial Census, American Community Survey, and Census Population Estimates Program data). A copy
of OMB Bulletin No. 23-01 is available online at https://www.bls.gov/bls/omb-bulletin-23-01-revised-delineations-of-metropolitan-statistical-areas.pdf.

The July 21, 2023 OMB Bulletin No. 23-01 contained a number of significant changes. For example, it designated new CBSAs,
split some existing CBSAs, and changed some urban counties to rural and some rural counties to urban. We believe it is important
for the hospice wage index to use the latest OMB delineations available 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-

  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.

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.

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.

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.

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 § 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

  Update final rule (89 FR 64202), as a result of the changes mandated by the CAA, 2024, we finalized conforming regulation
  text changes at § 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 § 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 § 418.56. As referenced
in our regulations at § 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 § 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

Figure 2: Medicare Payments for Non-Hospice Medicare Part D Drugs During Hospice Elections, FYs 2020-2024

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.

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

  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.

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).

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)

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-

  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.

Additionally, we analyzed the same principal diagnosis coding groups for Part D drugs paid outside of the hospice benefit.

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

  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

  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

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

  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.

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.

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 §  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 § 418.24(d). The
required content of the hospice election statement addendum is outlined generally below and described in § 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

  supporting all diagnoses as required by regulation at § 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 § 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.

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

  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 § 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 § 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 § 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 § 418.102(b) by adding the physician member of the hospice
interdisciplinary group (IDG), as defined in § 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 § 418.102(c) to include the medical director, or physician
designee, as defined at § 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 §§ 418.22 and 418.25 with
the CoPs at § 418.102, we added “physician designee (as defined in § 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 §§ 418.22(c) and 418.25 with the CoPs at § 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 §§ 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 § 418.25 identifying which physicians can determine admission to hospice care should be consistent
with those at § 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 §§ 418.22(c)(1)(i) and 418.102(b), respectively,
we finalized the addition of “the physician member of the hospice interdisciplinary group” at § 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 § 418.25(a) and (b) with the language at §§ 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 § 418.26(b) requires that prior to discharging a patient for any reason listed in § 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 §§ 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 § 418.26(b) to state the hospice may also obtain the written physician's
discharge order from the physician designee, as defined at § 418.3, or physician member of IDG. We request comments on the
proposed additions to § 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

  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 § 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 (§ 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

  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 § 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)

In response to these numerous, ongoing comments from interested parties regarding the hospice wage

  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)]()

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:

(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.

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.

(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:

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

  available to examine geographic variation of hospice labor costs.

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 § 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.

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.

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®), 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 (§ 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 § 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® 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® 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 § 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 § 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

  2022 Hospice Wage Index and Rate Update final rule (86 FR 42553), we finalized § 418.312(b)(2), which requires hospices to
  provide administrative data, including claims-based measures, as part of the HQRP requirements for § 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

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

  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

  Wage Index final rule (87 FR 45669), we revised our regulations at § 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.

Submission requirements are codified at § 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.

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

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

  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.

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)

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 §§  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 §  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 §  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.

• 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 §  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 §  418.52. Likewise, the regulations at §  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 §  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 §  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 § 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 § 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 §  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 §  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 §  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 §  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 × 0.81)

  = 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 × $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 × 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 × 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.

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 × $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 × 15.6) = $306.85 and the annual
total cost for all institutional, non-hospice providers in FY 2027 would be ($306.85 × 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
× $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 × 15.5) = $304.89 and the annual total cost for all non-institutional, non-hospice
providers in FY 2027 would be ($304.89 × 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 × $45.80) = $11.45,
we estimate the total cost per pharmacy dispensing Part D maintenance drugs to be ($11.45 × 18.6) = $212.97 and the annual
total cost for all pharmacies dispensing Part D maintenance drugs to be ($212.97 × 57,642) = $12,276,016.74. The estimated
total annual burden for

  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.

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 × $78.68) = $6.55,
we estimate the total cost per institutional non-hospice provider in FY 2024 to be ($6.55 × 15.6) = $102.18 and the annual
total cost for all institutional non-hospice providers in FY 2024 would be ($102.18 × 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 × $78.68) = $6.55, we estimate the total cost per non-institutional,
non-hospice provider in FY 2024 to be ($6.55 × 15.5) = $101.53 and the annual total cost for all non-institutional, non-hospice
providers in FY 2024 would be ($101.53 × 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

  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 × $45.80) = $3.82, we estimate the total cost per pharmacy dispensing
  Part D maintenance drugs to be ($3.82 × 18.6) = $71.05 and the annual total cost for all pharmacies dispensing Part D maintenance
  drugs to be ($71.05 × 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.

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.

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.

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 § 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 § 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

  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

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 × $113.42). Therefore, we
estimate that the total cost of reviewing this regulation is approximately $12,576 ($199.62 × 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.

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.

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

  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

1. The authority citation for part 418 continues to read as follows:

Authority:

42 U.S.C. 1302 and 1395hh.

1. Section 418.22 is amended by revising paragraph (a)(4)(ii) to read as follows:

§ 418.22 Certification of terminal illness. (a) * * *

(4) * * *

(ii) During a Public Health Emergency, as defined in § 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:

(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.

---

1. Section 418.24 is amended by revising paragraphs (b)(6), (c) introductory text, (c)(9) and (10), and (d) to read as follows:

§ 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.

---

1. Section 418.26 is amended by revising paragraph (b) to read as follows:

§ 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 § 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.

---

§ 418.309 [Amended] 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

Footnotes

(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).

(2) Hospice Regulations and Notices. https://www.cms.gov/medicare/payment/fee-for-service-providers/hospice/hospice-regulations-and-notices.

(3) https://www.bls.gov/productivity/notices/2021/mfp-to-tfp-term-change.htm.

(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.

(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.

(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.

(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.

(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.

(15) MedPAC, Report to Congress, 2023, p.386.

(16) https://www.bls.gov/respondents/oes/instructions.htm#online.

(17) https://www.bls.gov/oes/current/oes_tec.htm.

(18) https://www.cms.gov/files/document/addendum-c-cms-1805-p-esrd-pps-proposed-wage-index-construction-methodology.pdf.

(19) https://www.medpac.gov/wp-content/uploads/2022/07/Wage-index-March-2023-SEC.pdf.

(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.

(21) CAHPS Hospice Survey, Participation Exemption for Size. https://www.hospicecahpssurvey.org/en/participation-exemption-for-size/.

(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.

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