The FY2026 Hospice Final Rule brings important updates that will shape the delivery of hospice care in the year ahead. While the core mission of hospice remains unchanged, the rule introduces payment adjustments, regulatory clarifications and quality reporting requirements that providers must navigate.
From reimbursement changes to evolving expectations around documentation and data submission, the updates reinforce the need for operational accuracy and proactive compliance. Understanding these changes is essential for organizations striving to balance compassionate care with the realities of financial and regulatory pressures.
Payment Updates in the FY2026 Rule
The Final Rule includes a 2.6% payment increase on average, translating to about $750 million in additional payments across the sector. Rural agencies are set to see a slightly higher increase (around 3%), while urban providers average 2.6%. Regionally, New England comes out ahead with a 3.9% increase, while the Pacific region sees the smallest bump at 1.5%.
The payment cap also rises from $34,465.34 to $35,361.44, an increase of just under $900 per beneficiary. Routine home care daily rate increased by about $6 per day for days 1–60, and about $5 per day for days 61 and beyond. Continuous home care, inpatient respite and general inpatient care rates also receive increases.
For providers, accurate cost reporting remains critical. The rule highlights discrepancies in cost report data, such as gaps in ownership and facility type information. Verify complete and accurate data when submitting your cost reports. This ensures future rate-settings are based on real world hospice operations.
Finally, quality reporting carries weight. Agencies that don’t participate in the Hospice Quality Reporting Program (HQRP) could see an average loss of nearly $100,000 annually on a 20-patient census, making compliance not just a regulatory requirement but a financial necessity.
Regulatory Clarifications
The FY2026 Final Rule provides several important clarifications to hospice regulations, helping reduce ambiguity in daily operations.
- Hospice admission authority: Under §418.25, CMS now explicitly states that a physician member of the interdisciplinary group (IDG) can recommend hospice admission. While most providers have already been operating this way, putting it in writing removes any doubt and strengthens IDG decision-making authority.
- Face-to-face encounter attestations: The rule also clears up long-standing confusion under §418.22. Attestations by nurse practitioners and physicians must include both a signature and date. CMS further clarified that the attestation statement does not have to exist as a separate document, it can be part of a signed and dated clinical note. This flexibility may help streamline documentation and reduce the risk of technical errors that could otherwise lead to compliance issues.
- Telehealth extensions: The rule notes that hospice telehealth flexibilities are only extended through September 30, 2025. Beyond that date, CMS has not committed to whether these allowances will continue. Providers should monitor updates closely, as the potential rollback could impact staffing models and patient access strategies.
Hospice Quality Reporting Program
The Final Rule brings limited changes to the Hospice Quality Reporting Program. The biggest shift remains the launch of HOPE (Hospice Outcomes & Patient Evaluation) on October 1, 2025. From day one, providers will need to meet the 90% submission threshold to avoid payment reductions. Data will be submitted through iQIES, and a test site is already available for providers and vendors to verify submission readiness.
The transition means that HIS data collection ends February 15, 2026. Any admissions occurring on or prior to September 30, 2025 or will use HIS, while admissions on or after October 1, 2025 will use HOPE. CMS will monitor Q4 2025 submissions and may adjust requirements depending on performance.
Looking ahead, public reporting of HOPE data is expected no earlier than FY2028. Other elements, like CAHPS, Hospice Care Index (HCI) and the Hospice Visits in the Last Days of Life (HVLDL) measure will continue unchanged.
Financial Risk of Non-Compliance
While the Final Rule projects an additional $750 million in hospice payments, rising operational costs, up an estimated 15% across staffing, supplies and overhead, are outpacing reimbursement gains. Beyond rate pressures, noncompliance with the HQRP carries a significant penalty of a 4% payment reduction. For many providers, this equates to more than $3,200 per patient annually, quickly compounding across a census.
CMS also continues to monitor claims data, visit patterns and cost reports, making audit vulnerabilities a real concern. Publicly reported data, including Hospice Compare ratings and CAHPS results, further reinforce the importance of accuracy and compliance.
Conclusion
The Final Rule underscores both the opportunities and challenges facing hospice providers. While payment increases offer some relief, regulatory updates and reporting requirements demand close attention. By staying informed and adapting workflows now, agencies can set themselves up to deliver high quality care while meeting compliance expectations in a changing landscape.
Click here to read the full news release from CMS.
Discover more takeaways of the FY 2026 Hospice Final Rule and strategies for continued clinical and financial success in 2026. Click here to listen to the full webinar.
About the Author
Dee Geray, Senior Manager of Clinical Consulting
Dee Geray, RN, is a Senior Clinical Consulting Manager at McBee with more than 20 years of experience working in the hospice industry. She has extensive expertise in hospice clinical compliance, case management, and leadership, and works with hospice providers nationwide to perform Medicare compliance reviews and establish internal audit plans.
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