by Kristin Rowan, Editor

The Alliance responds to CMS-1835-P, the FY 2026 Hospice Wage Index, Conditions of Participation, and Quality Reporting Program Requirements updates. On June 10, 2025, in a 25 page letter to Dr. Mehemet Oz, CEO for The National Alliance for Care at Home Steve Landers, MD, MPH lays out the constraints and financial burdens hospice agencies will face if these updates are enacted. 

In the rule for FY 2026, CMS proposes a 3.2 percent market basket increase and a .8 percent productivity decrease, yielding a 2.4 percent increase overall. According to the letter, inflation has raised medical care prices by 3.1 percent, leaving a shortfall of .7 percent. Hospices are also plagued by the same workforce shortage the rest of the medical industry faces. Workforce shortages result in fewer qualified people than there are available positions, which drives wages up. BLS data indicates the wage increase for 2025 was 4.4%. The Alliance argues that the 2.4% net increase falls well short of the actual expense increase.

In a recent article, we outlined the process that CMS uses to determine the market basket update. The Alliance echos our information, showing the market basket forecast is well below actual increases. The Alliance further argues that the shortfall compounds, leaving the base rate increasingly smaller with each forecast. The current estimate is a 4.9% pay rate gap. CMS contends there is no way to adjust for forecast errors. The Alliance has a simple solution: manually adjust the payment rate every year when the finalized number are above the forecasted numbers BEFORE adding the next year’s payment rate increase.

Likewise, The Alliance concurs with The Rowan Report sentiment that productivity cannot increase in hospice like it does in less labor-intensive sectors. Landers also mentions the failure to consider travel costs, the wage differences in rural areas, and the lack of reclassification options in hospice care.

As any well-drafted response should, The Alliance provides actionable recommendations in each section. For payment rate updates, The Alliance recommends:

• We recommend CMS examine closely more recent data and increase final payment rates for FY 2026.
• We urge CMS to explore all available avenues to address the forecast error shortfall, such as through a one-time adjustment.
• We encourage CMS to collaborate with stakeholders to address the shortcomings of relying upon hospital data to determine hospice payment rates, and ways to achieve parity across provider types with respect to geographic area wage adjustments.

Also addressed in the letter is opposition to the timeline of the HIS to HOPE transition. The Alliance restates much of what was in the joint letter to CMS urging the delay of the HOPE tool adoption. That letter was a joint venture between The National Alliance for Care at Home (The Alliance), LeadingAge, and the National Partnership for Healthcare and Hospice Innovation (NPHI).

• Considering the volatility inherent in a reporting transition of this magnitude and the lack of clear information provided to date, we respectfully request CMS waive the HOPE timeliness submission requirement for two calendar quarters post implementation.
• We further respectfully request that CMS delay the HOPE implementation date until at least six months after CMS education and training, beyond that which is introductory and that is scheduled for spring/summer 2025, the final validation utility tool specifications are available and the application for iQIES access has been opened for hospices.

Among the digital hospice measurements is an interoperability measurement. The Alliance supports interoperability and data exchange across medical care entities, but stresses to CMS that many hospices do not have digital EHR systems, cannot afford to maintain such systems, and have not received the federal financial support necessary to meet this objective.

The Alliance also objects, not in theory, but in practical application, to the nutrition measure noted in future hospice measures. Nutrition for a hospice patient is vastly different than for other patients and should be implemented as a process measure, rather than having specific goals for food intake and nutrition.

Similarly, the well-being measure is not designed for hospice care. In other sectors of healthcare, well-being incorporates measures for mental, social and physical health and focuses on curative plans. Hospice care focuses on person-centered care, emphasizing the desires of the patient as they are balanced against religious, cultural, and personal beliefs. The well-being measure must be curated to fit hospice care.

The Alliance values CMS’s ongoing commitment to enhancing hospice care quality,
ensuring program integrity, and improving patient outcomes. We appreciate your
consideration of our comments and look forward to ongoing dialogue to achieve these
shared objectives.

The Alliance has, as always, done an exemplary job at explaining the industry position on the CMS rule. Likewise, it has outlined each step CMS should take to view the updates through a hospice lens rather than a hospital lens. We commend and support The Alliance statement and position. As this is an ongoing topic until the final rule is implemented, we will continue to provide updates as they become available. 

If you are a member of The Alliance, you can read the full 25 page letter here.

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Kristin Rowan has been working at The Rowan Report since 2008. She is the owner and Editor-in-chief of The Rowan Report, the industry’s most trusted source for care at home news, and speaker on Artificial Intelligence and Lone Worker Safety and state and national conferences.

She also runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in content creation, social media management, and event marketing.  Connect with Kristin directly kristin@girardmarketinggroup.com or www.girardmarketinggroup.com

©2025 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com