Volume 26.03
On March 12, 2026, the Medicare Payment Advisory Commission (“MedPAC”) issued its March 2026 Report (“Report”) to Congress. The Report includes one recommendation, “For fiscal year 2027, the Congress should eliminate the update to the 2026 Medicare base payment rates for hospice.”
The following information is contained in the Report:
- The number of Medicare-certified hospices increased to 6,706 in 2024, an increase of 2.6% from 2023. Between 2019 and 2024, the number of hospices increased by 1,866 or 7.8% on average per year.
- The number of for-profit hospices has increased to 5,497 in 2024, an increase of 4.8% from 2023. In 2019, there were 3,434 for-profit hospices. During this period the number of for-profit hospices has increased by an average of 11.2% per year.
- The number of non-profit hospices declined to 1,070 in 2024, a 7.4% change from 2023. In fact, in 2019 there were 1,254 non-profit hospices compared to 1,070 in 2024.
- The number of hospital-based hospices continues to decline while the number of home health agency-based hospices remained the same in 2024 compared to 2023.
MedPAC continues to report on the substantial increase over the past four (4) years in the number of hospices in California, Texas, Arizona, and Nevada. Even so, the growth in the number of hospices in California, Texas, and Arizona has slowed in 2024. Nevada continued the rapid growth with a twenty (20) percent increase in the number of hospices in 2024 compared to 2023.
According to MedPAC, “The rapid entry of providers in Arizona, California, Nevada, and Texas in recent years has spurred program-integrity efforts by the State of California and CMS, which may partly account for the slowdown in provider entry observed in some of these states in 2024.”
Medicare hospice spending was $28.3 billion in 2024 and $17.5 billion was spent on patients with a length-of-stay more than one hundred eighty (180) days.
As we predicted, MedPAC’s reporting of the number of hospices exceeding the CAP was too low in prior years and the number of hospices exceeding the CAP, was going to increase dramatically. MedPAC has revised prior year numbers of hospices exceeding the CAP, and the percentage of hospices exceeding the CAP in 2024, according to MedPAC, is 28% compared to 23% in 2023. Again, we project that 28% in 2024 is too low and that the percentage of hospices exceeding CAP in 2025 may reach 30%.
Hospice margins in 2023 were 8.0% overall before any CAP repayments, making the margins higher than actually exist. For-profit hospices were at 10.2% before any CAP repayments. In fact, MedPAC reports that hospices exceeding the CAP had a deficit of 1.4% after any CAP repayment.
MedPAC is projecting a Medicare margin of about nine (9) percent in 2026. However, again this is very misleading as MedPAC’s projection does not consider any CAP repayments especially given that close to 30% of all hospices are now repaying CAP liabilities to the Medicare program.
HOSPICE FINANCIAL ADMINISTRATION PROGRAM
You can still register to attend the “CHAPCA Hospice Financial Administration Program” in Los Angeles on March 24-25, 2026. The program provides in-depth review of Hospice CAP, cost reporting, Medicare enrollment, and revenue cycle. Registration and other information is available here. Clients of The Health Group, LLC can secure a discount on registration with the code HealthGroup at the end of the registration process.