Volume 25.12
The New York Assembly passed legislation in December 2025 that would have prohibited the establishment of any new for-profit hospices in the State of New York; however, the legislation has been vetoed by the Governor due to low hospice utilization in New York.
Currently, according to other reporting, there are only two (2) for-profit hospices operating in the state. The legislation as vetoed is available at S3437.
MedPAC DECEMEBER RECOMMENDATION
RELATED TO HOSPICE PAYMENTS
On December 4-5, 2025, the Medicare Payment Advisory Commission (“MedPAC”) held its public meeting and made a single recommendation, which was approved by the Commission relating to hospice payments: “For fiscal year 2027, Congress should eliminate the update to the 2026 Medicare base payment rates for hospice.”
This is not a new recommendation as MedPAC has continuously believed that Medicare margins are too high for hospice providers.
The MedPAC presentation, “Assessing payment adequacy and updating payments: Hospice services” is available here.
The presentation provides significant information regarding Medicare hospices, including continued but slower growth in 2024 (all of which is growth in the number of for-profit hospices), increased hospice use by decedents, and a decreased Medicare margin for 2023 (latest available).
HOSPICE MERGERS AND ACQUISITIONS (“M&A”) INCREASE SIGNIFICANTLY AT END OF 2025
The end of 2025 saw a significant increase in hospice mergers and acquisitions. M&A activity had slowed for various reasons including rising interest rates, increased compliance scrutiny (continuing), regulatory restrictions (continuing), and unrealistic pre-COVID seller expectations.
As interest rates have started to decline and seller expectations for value have become more realistic, the number of acquisitions and mergers has increased. Based on our conversations with hospices across the country (buyers and potential sellers), we expect 2026 to be a significant year for additional mergers and acquisitions.
Compliance and regulatory issues remain a concern; however, most buyers have adapted to the problems posed and appropriately addressing these issues.
The hospice demographics are still very favorable. Buyers are more prevalent than ever. Potential sellers should be taking all steps possible to improve their finances and operations to take advantage of current and upcoming opportunities.