Hospice Is Buckling Under Structural Choices We Made

Here’s the path to a Benefit worth renewing.

I’m going to be blunt. Hospice isn’t failing because clinicians forgot how to care. It’s failing because we built a structure that funds poorly, measures the wrong things, and aims enforcement in ways that often miss the mark.

You don’t need to be a policy wonk to follow this. If you’ve watched a loved one die at home, you already know what matters: comfort, continuity, and caregiver capacity. Today’s Medicare Hospice Benefit cannot reliably deliver those.

What’s breaking (and why you should care)

Rates don’t match reality. CMS finalized only a 2.6% base‑rate increase for FY 2026 and raised the aggregate cap by 2.6%. That lags multi‑year inflation and workforce costs. Small agencies are openly warning of margin deficits and tough staffing decisions. You can’t stabilize access on “almost enough.” Hospice payments are also distorted by how CMS adjusts for local wages. Today’s hospice wage index relies on prior‑year hospital wage data, which often doesn’t match what hospices must pay to recruit and retain home‑based clinicians. Stakeholders—including the National Alliance for Care at Home—are urging CMS to consider hospice‑specific inputs or Bureau of Labor Statistics (BLS) wage data, similar to what the agency adopted for end‑stage renal disease facilities in 2025.

Compliance debt crowds out care. Survey guidance tightened, the new HOPE assessment replaces HIS beginning Oct 1, 2025, and audits stack up from multiple contractors. Meanwhile, the most common survey problems—care plans, medication profiles, aide supervision—keep repeating, which tells me we’re training teams to perfect notes rather than improve outcomes.

Program integrity is necessary—but blunt. Yes, fraud is real: sham hospices, license flipping, and coerced enrollments have harmed patients and siphoned funds. CMS has accelerated medical review in hot‑spot states and streamlined disenrollment for victims. But compliant providers report simultaneous audits with inconsistent interpretations that drain resources without improving care. California reports revoking more than 280 hospice licenses and will testify at a congressional hearing on the state’s crackdown. That protects patients and the Trust Fund, but the scale also raises transition‑of‑care risks for legitimate patients and providers in affected markets. We need smarter gates, not thicker walls.

Caregiver burden remains unfunded. CMS’s own 2025 report synthesizes the literature on caregiver support gaps; survey data routinely show late or incomplete social work and bereavement assessments. Families do most of the labor, yet our payment and quality signals barely recognize it.

My thesis

We built a hospice system that documents well and funds poorly. Renewing the Benefit means rebasing to reality, measuring what matters, and paying for caregiver capacity.

I’m viewing hospice through explicit error and implicit error. Explicit error is the visible stuff we can point to and punish: sham providers, coerced enrollments, repeat survey deficiencies. CMS and DOJ may be right to press hard if it's in good faith (which I cannot assume right now)—PPEO medical review in hot‑spot states, expedited disenrollment for victims, and the new Fraud Defense Operations Center are necessary guardrails. The repeat citation patterns (care planning accuracy, medication profiles, aide supervision) tell you where processes fail year after year.

But the bigger drag on care is implicit error—the harm baked into design choices we’ve normalized: rates that lag reality (a 2.6% update and cap increase for FY 2026 while costs outpace them), using hospital wage data and allowing hospitals—but not hospices—to reclassify into higher wage areas skews local labor markets against hospice hiring and then penalizes hospices that keep up with pay, measurement that can siphon time from families unless duplicative documentation is retired as HOPE comes online, caregiver labor treated as “free” despite clear evidence of burden, and attempts to fold hospice into Medicare Advantage that added friction rather than solving fragmentation.

The points that follow will target both categories: smarter, risk‑based integrity to eliminate explicit error without throttling access, and structural fixes—rebasing, HOPE de‑duplication, funded caregiver supports, and keeping hospice in Original Medicare—to correct the implicit errors that quietly erode comfort, continuity, and caregiver capacity.

Three claims I stand behind

1) Rates are insufficient. A 2.6% update in a multi‑year cost surge doesn’t maintain staffing or quality; agencies are signaling deficits and service constraints. Even when base rates tick up (2.6% in FY 2026), wage‑index mechanics can blunt the effect or misalign dollars with actual hospice labor costs, especially in markets where hospital reclassification advantages outcompete home‑based providers.

2) Oversight is miscalibrated. Keep pressure on bad actors, but calibrate to risk and scale. Where states revoke en masse—as California just did—pair enforcement with continuity protocols, rapid disenrollment fixes, and fast‑track appeals for erroneously flagged providers. That’s how you protect patients without throttling compliant access.

3) Medicare Advantage carve‑in is the wrong path. CMS ended the MA “hospice carve‑in” test on December 31, 2024, due to operational challenges and declining participation. Field reports cited access barriers and payment friction. Keep hospice in Original Medicare and build pre‑hospice serious‑illness models instead.

What this means for you and your patients—without the jargon

• Availability: Fewer clinicians and strained agencies mean longer waits and narrower service footprints. Clinical hospice team members are carrying larger and larger panels of patients, spreading them thin and causing moral distress. In California, mass revocations mean active caseload transfers, potential service gaps, and surge workloads for surviving providers. Expect spillover in adjacent counties and states as patients and staff move.

• Experience: If teams spend hours feeding compliance portals, they spend fewer hours coaching families and managing symptoms.

• Equity: Caregiver burden is highest where housing is unstable, transportation is limited, and language access is thin. If we don’t fund supports, the disparities widen.

The path forward: concrete fixes I’ll argue for

Rebase and differentiate rates. Commit to a multi‑year rebasing indexed to actual labor and input costs, and add a transparent add‑on for defined high‑intensity palliative services under hospice (e.g., transfusions, palliative radiation) when clinically appropriate. CMS has already solicited input on this.

Reform the wage index. Move away from exclusive reliance on hospital wage data and test an index that blends hospice/home‑health cost report information with BLS occupation‑level wages for the disciplines we actually hire (RNs, social workers, aides). CMS just did something analogous in ESRD—there’s precedent to study. Meanwhile, keep the 5% year‑over‑year cap on wage‑index decreases while any new method phases in, and offer corridor protections for agencies with large regional shifts so care doesn’t get disrupted. (FY 2026 finalized payments show the cap and regional variation already matter.)

Make integrity smarter. Tier oversight by risk: tighter enrollment screening, site checks, 36‑month change‑of‑ownership guardrails, and targeted prepayment in outlier markets—while reducing duplicative audits of the same issue. Keep rapid disenrollment for patients signed up without consent.

Center quality on outcomes and caregivers. Implement HOPE with de‑duplication: if HOPE captures pain and symptom impact, retire overlapping documentation so clinicians gain time back. Weight CAHPS Hospice toward caregiver‑function and early social work engagement.

Fund caregiver capacity explicitly. Create a caregiver stipend and expanded respite embedded in the Benefit, tied to documented burden and social risk. Families are the backbone; pay them like it matters.

Preserve hospice in Original Medicare; build pre‑hospice bridges.
Leave hospice outside MA. Use CMMI to test robust serious‑illness care models upstream (interdisciplinary Palliative Care, concurrent supports) without end‑of‑life network chokepoints.

Documentation minimalism with accountability. Adopt templated care plans that satisfy CoPs while focusing on measurable symptom relief and caregiver goals; train surveyors to value outcomes over sheer note volume. The most‑cited deficiencies have been the same for years—fix the incentive, not just the checklist.

Keep justice at the front. Include transportation, home modifications, and equipment lifecycles in payment and quality—because geography, housing, and environmental barriers amplify caregiver strain. For MA enrollees outside hospice, use SSBCI/HRSN authorities wisely; but keep hospice funding centralized and predictable.

What would change my mind

• If CMS pilots a hospice‑specific wage index using BLS and cost‑report data and it demonstrably improves hiring and retention without destabilizing payments across regions, I’ll support a phased transition with strong corridor protections.
• If HOPE demonstrably reduces duplicative documentation and correlates with better symptom control and caregiver function in public reporting, I’ll accept short‑term friction.
• If a future MA carve‑in shows audited evidence of faster access, fewer denials, and higher caregiver‑support utilization versus Original Medicare—without network restrictions—I’ll revisit the carve‑out stance. I'm not holding my breath.

Final thoughts

Hospice will not fix itself. We have to reset the Benefit around reality—rates that match the work, oversight that targets risk, and quality signals that reward comfort and caregiver capacity. The federal scaffolding is already shifting (HOPE begins Oct 1, 2025; public reporting no earlier than FY 2028; FY 2026 rates and cap finalized), so the window to shape how this lands is now. The honest path is the one that funds care, targets fraud smartly, and lifts families who are doing the hardest work.