FY 2026 Hospice Final Rule: What Hospice Agencies Need to Know

Quick Answers: FY 2026 Hospice Final Rule

When does the FY 2026 Hospice Final Rule take effect?

The FY 2026 Hospice Wage Index and Payment Rate Update Final Rule (CMS-1835-F) took effect on October 1, 2025, the start of federal fiscal year 2026, and governs hospice payment and policy through September 30, 2026.

What is the FY 2026 hospice payment update?

CMS finalized a 2.6% hospice payment update for FY 2026, an estimated increase of approximately $750 million in payments to hospices compared with FY 2025.

What is the FY 2026 hospice aggregate cap amount?

The FY 2026 hospice aggregate cap is $35,361.44, calculated as the FY 2025 cap amount of $34,465.34 increased by the 2.6% FY 2026 hospice payment update.

What did the Final Rule change about face-to-face encounters?

The Final Rule clarified that hospice face-to-face encounter attestations must include the signature and date of the signature of the physician or nurse practitioner, and added flexibility by allowing a signed and dated clinical note to satisfy the attestation requirement.

Why This Rule Matters in 2026

The FY 2026 Hospice Final Rule is the single most consequential regulatory document for hospice operations this year. It sets payment, defines the aggregate cap, codifies recent policy clarifications, and signals where CMS is heading on quality reporting and oversight. Every hospice administrator, medical director, billing manager, and compliance officer should have a working knowledge of its provisions.

Below is a section-by-section operational summary. For binding language, reference the Federal Register publication directly.

Payment and the Hospice Aggregate Cap

CMS finalized a 2.6% payment update for FY 2026, derived from the inpatient hospital market basket update reduced by a productivity adjustment. The increase applies to all four levels of hospice care (routine home care, continuous home care, inpatient respite, and general inpatient).

The FY 2026 aggregate cap amount is $35,361.44. The cap operates as a per-beneficiary annual ceiling on aggregate hospice payments; agencies with payments above the cap must return the excess. Cap management is therefore a real margin lever, particularly for agencies with longer-stay patient populations.

Admission to Hospice Care

The Final Rule clarifies in the hospice payment regulations that the physician member of the Interdisciplinary Group (IDG) may recommend admission to hospice care. This aligns the payment regulations with the certification of terminal illness payment rules and the medical director Conditions of Participation requirements. Practically, it formalizes a pathway many hospices were already using.

Face-to-Face Encounter Attestation

One of the most operationally meaningful clarifications. The Final Rule:

• Requires the face-to-face encounter attestation to include the signature and date of the signature of the physician or nurse practitioner who performed the encounter.
• Allows a signed and dated clinical note to satisfy the attestation requirement, rather than requiring a separate attestation form.

Hospices that previously used a separate attestation form can transition to using the encounter clinical note itself, as long as it is signed and dated. Hospices that already used the encounter note should verify their template captures both elements.

Telehealth

The Final Rule includes technical changes to hospice telehealth policy. Consult the rule directly for specifics; telehealth flexibilities that were temporary during the public health emergency are being incorporated into regular policy where appropriate.

Hospice Quality Reporting Program (HQRP)

The Final Rule continues HQRP modernization. HOPE became the required patient-assessment instrument on October 1, 2025, replacing HIS. CMS is finalizing the policy framework for HOPE-derived quality measures, which will eventually feed publicly reported Care Compare measures and the agency's Annual Payment Update.

What Agencies Should Do Now

• Update payment rates in your EMR and billing system. Apply the 2.6% update to all levels of care effective for service dates October 1, 2025 onward.
• Confirm cap exposure modeling. Use the new $35,361.44 cap amount in any cap-projection model your finance team runs.
• Verify F2F documentation. Confirm the F2F encounter note template includes the encounter physician or NP signature and date.
• Review IDG admission documentation. If your hospice uses the physician IDG admission pathway, confirm the recommendation is captured in the IDG record.
• Verify HOPE submission. By now every new admission should be on HOPE. Confirm iQIES submissions are within the 30-day window.

An AI-Assisted FY 2026 Compliance Workflow on Hathr.AI

Hathr.AI runs on AWS GovCloud (FedRAMP High) with a Business Associate Agreement included on every plan. Compliance and policy teams can use Hathr.AI to operationalize new rules without exposing PHI to consumer AI tools.

A representative workflow:

1. Ingest the rule. Upload the Final Rule and the CMS fact sheet into a private session.
2. Extract action items. Prompt: "From the FY 2026 Hospice Final Rule, generate a hospice operational action list grouped by team: billing/RCM, clinical operations, compliance, IT."
3. Generate a policy update memo. Have Hathr.AI draft a one-page internal memo summarizing the changes for the IDG and the administrative team.
4. Audit current documentation against new requirements. Upload a sample of recent F2F encounters and ask Hathr.AI to flag any that lack the new signature and date elements.

Frequently Asked Questions

Does the FY 2026 Final Rule change hospice eligibility criteria?

No. Eligibility remains governed by 42 CFR 418.20 and 418.22 — a terminal prognosis of six months or less if the illness runs its normal course, certified by two physicians at admission and by one at recertification.

How does the cap apply to my agency?

The aggregate cap is computed per beneficiary per cap year and aggregated across the agency. Agencies with longer-stay patient populations (relative to lower-cost levels of care for shorter periods) are most likely to approach or exceed the cap. Run your cap projection quarterly.

Did the Final Rule affect the Hospice Special Focus Program?

The Hospice Special Focus Program (HSFP) was paused by CMS in February 2025 and remains paused as of mid-2026; it is being re-evaluated. The Final Rule does not relaunch the HSFP. MAC-led audits and other oversight programs continue independent of the HSFP.

Where can I read the Final Rule directly?

The Final Rule is published in the Federal Register and summarized in the CMS Newsroom Fact Sheet. Both are linked below.

Sources and Further Reading

• CMS Fact Sheet: FY 2026 Hospice Final Rule (CMS-1835-F)
• Federal Register: FY 2026 Hospice Wage Index Final Rule
• CMS Hospice Center

This article is for informational purposes only and does not constitute legal, clinical, or billing advice. For binding requirements, consult the Final Rule and the CMS Hospice Center. Last reviewed: May 2026.

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