Federal Rulemaking · Hospice · Medicare Part A

The answer first: in the FY 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule (CMS-1851-F), issued in 2026, CMS finalized a 2.3% hospice payment update, worth roughly +$755 million to the benefit, and set the FY 2027 aggregate cap at $36,174.75. That final cap lands slightly below the $36,210.11 CMS floated in the proposed rule issued April 2026. The new cap governs the cap year that begins October 1, 2026, and it arrives alongside tightened oversight provisions, with the HOPE assessment tool now feeding CMS a second year of patient-level data.

Proposed vs. final: the cap came in lower

Cap-exposed hospices that ran spring projections against the April 2026 proposed rule were modeling $36,210.11. The final number is $36,174.75. The gap is small, $35.36 per beneficiary, but cap liability is an aggregate calculation, so a lower cap means every projection built on the proposed figure now slightly understates exposure. Multiply that difference across every Medicare beneficiary in your cap count and the drift is real money for high-length-of-stay programs.

The FY 2027 numbers at a glance

How we got here: the rulemaking timeline

Why this cap year is different: HOPE is watching, in year two

The aggregate cap has always been a blunt instrument: total Medicare payments to a hospice cannot exceed the cap amount multiplied by its number of Medicare beneficiaries, and overages must be repaid. What changes the risk calculus for FY 2027 is not the cap formula, it is the data behind it. The HOPE assessment tool, effective October 1, 2025 under CMS-1810-F, is now in its second year of collection. CMS no longer sees hospice utilization only through claims. It sees standardized assessment data on patients across the stay.

For a cap-exposed program, the practical read is simple: the margin for discovering an overage after the fact is shrinking. A hospice that historically trued up cap liability at year end, when the MAC demand letter arrived, is operating a year behind the visibility CMS now has into its own book.

Operator to-do list before October 1, 2026

1. Re-run every FY 2027 cap projection against $36,174.75. Any model built on the proposed $36,210.11 overstates headroom. Refresh the beneficiary count methodology at the same time.
2. Stress-test your long-stay census. Identify the patients and referral sources driving average length of stay upward, and model cap position under current admission mix, not last year's.
3. Reconcile HOPE submissions against claims. CMS will read them side by side. Gaps between what your assessments say and what your claims bill are the cheapest audit flag to eliminate.
4. Set a quarterly cap-monitoring cadence for the new cap year. An annual true-up is no longer defensible risk management when CMS holds two years of HOPE data. Quarterly, at minimum.
5. Rebuild your FY 2027 revenue budget on the 2.3% update. The update is finalized. Rate tables, contract models, and cash forecasts should reflect CMS-1851-F, not proposed-rule figures.
6. Reserve for potential overage now, not at demand-letter time. If projections show cap exposure, the accrual belongs in this year's plan.

Sources

• CMS fact sheet, Fiscal Year 2027 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule (CMS-1851-F), 2026.
• FY 2027 hospice proposed rule, issued April 2026 (proposed cap of $36,210.11).
• FY 2025 Hospice Final Rule (CMS-1810-F), establishing the HOPE assessment tool effective October 1, 2025.