Hospice pay for FY 2027: a 2.3% update, a $36,174.75 cap and corrected rates

Medicare's fiscal year 2027 hospice rates have applied to care since October 1, 2026. The final rule, published August 3, sets a 2.3 percent payment update. That figure is the 3.2 percent inpatient hospital market basket minus a 0.9-point productivity adjustment. CMS estimates the update adds about $755 million in hospice payments this year. Hospices that don't submit the required quality data get the 2.3 percent update minus 4 percentage points, or minus 1.7 percent.

The correction

On September 30, CMS published a correction notice. The agency said it had wrongly treated one hospital that still gets paid under the inpatient system as if it had become a rural emergency hospital. That left the hospital's data out of the hospital wage index that the hospice wage index is built on. CMS restored the data and recalculated the hospice wage index values for every metro and rural area, the wage index standardization factors, the national rates for each level of care and its impact analysis. The correction is effective October 1, as if it had been in the original rule.

The same day, CMS issued transmittal R13976CP (Change Request 14557) to the Medicare contractors. It rescinds and replaces the August 18 transmittal (13924) and carries the updated rate tables.

Corrected national rates

For hospices that meet quality reporting:

• Routine home care, days 1 to 60: $236.33 a day
• Routine home care, day 61 and later: $186.33 a day
• Continuous home care: $1,726.16 for a full 24 hours ($71.92 an hour)
• Inpatient respite care: $545.93 a day
• General inpatient care: $1,231.51 a day

For hospices that don't, the rates are $227.09, $179.04, $1,658.66 ($69.11 an hour), $524.58 and $1,183.35.

These are national base rates before the wage index. The transmittal says claims carry a CBSA code or special 50xxx code for where care was provided, and the wage index for that area is applied.

The cap

The aggregate cap for the 2027 cap year (October 1, 2026, to September 30, 2027) is $36,174.75. That is last year's $35,361.44 raised by the same 2.3 percent. CMS says the Consolidated Appropriations Act, 2026 extended the rule that the cap rises with the hospice payment update rather than the consumer price index to accounting years ending before October 1, 2035.

Who gains more or less

The corrected impact table in the rule shows the 2.3 percent average landing differently by area: 2.2 percent for urban hospices and 2.9 percent for rural ones, for the full impact including the wage index. For the East North Central census division, which includes Illinois, the figure is 2.1 percent. The correction notice also changes a figure in the rule's text about hospices with more than 20,000 routine home care days from 2.3 to 2.2 percent.

Counties shielded by the 5 percent cap on wage index decreases still report special "50xxx" transition codes on claims instead of the regular area code. The transmittal's Table 3 lists 13 such counties for FY 2027 in Georgia, Idaho, Pennsylvania, Virginia and Puerto Rico, none of them in Illinois. CMS's hospice wage index page carries the full file.

For Illinois hospices

Palmetto GBA, Jurisdiction M, is the home health and hospice MAC for Illinois (our JM hub). The transmittal tells Medicare systems to apply FY 2027 rates to claims with dates of service on or after October 1, 2026, and tells contractors to use the hospice pricer for claims with "through" dates on or after that date.

Sources

• Federal Register, FY 2027 hospice final rule (2026-15686)
• Federal Register, correction (2026-20067)
• CMS, transmittal R13976CP (PDF)
• CMS, hospice wage index

Track every MAC change: our Medicare jurisdictions tracker lists CMS and MAC bulletins by jurisdiction, including Palmetto GBA, Jurisdiction M for Illinois.

It is general information, not clinical, billing or legal advice.*

Drafted with AI assistance from primary sources and reviewed by Monsaur Othman before publication. Read how we use AI, our editorial policy and our corrections policy.

Informational only, not billing, legal or clinical advice. Check the linked primary source and your Medicare Administrative Contractor.