The Service Line

CMS finalized next year’s hospice pay rule this week, and buried inside a routine rate update is the agency’s most detailed public fraud-scoring system yet. The Centers for Medicare and Medicaid Services (CMS) published its Fiscal Year (FY) 2027 Hospice Wage Index and Payment Rate Update final rule (CMS-1851-F) in the Federal Register on August 3, 2026, finalizing a 2.3 percent payment increase, about $755 million more than FY2026, slightly below the 2.4 percent CMS had proposed. Routine home care climbs to $236.35 a day for days 1 through 60 and $186.35 for day 61 and beyond; general inpatient care rises to $1,231.63 a day; the aggregate cap, the ceiling on what Medicare pays per beneficiary across a hospice’s whole patient population, moves to $36,174.75. Jennifer Sheets, chief executive officer of the National Alliance for Care at Home, said the update “does not reflect the true cost of delivering hospice care.” Confidence: High. Sources: Fiscal Year 2027 Hospice Wage Index and Payment Rate Update, CMS, Medicare Program: FY 2027 Hospice Wage Index and Payment Rate Update, Federal Register, Hospice Groups ‘Disappointed’ by 2027 Final Rule, Hospice News.

Reimbursement

The same rule finalizes the Service and Spending Variation Index (SSVI) exactly as proposed, a claims-based, 0-to-16 fraud-risk score built from nine measures, including length of stay past 180 days, live-discharge rate, visit intensity, and non-hospice Medicare spending, that CMS is now calculating for every hospice using Fiscal Year (FY) 2024 and FY2025 data. CMS’s own numbers explain why it built the tool: non-hospice spending on hospice patients, meaning Medicare Parts A, B, and D dollars paid outside the hospice benefit itself, hit $2.8 billion in FY2024, Part D spending in that population grew 47 percent from FY2020 to FY2024, and for-profit hospices ran nearly 167 percent higher non-hospice spending per day than nonprofit hospices in FY2024, up from roughly 60 percent in FY2022. Confidence: High on the figures, Medium on how quickly CMS turns SSVI scores into payment suspensions rather than just public data. Sources: Fiscal Year 2027 Hospice Wage Index and Payment Rate Update, CMS, CMS Posts FY 2027 Hospice Wage Index Final Rule, CHAP.

Enforcement

The fraud crackdown that has been synonymous with Los Angeles County just opened a new front in Philadelphia. The Department of Justice’s Fraud Division, the Pennsylvania Attorney General, and federal partners charged 19 defendants on August 4, 2026 in a roughly $4 million Medicaid and Medicare home care fraud scheme, including one home health aide whose timesheets claimed to be serving seven clients at once and racked up more than 64,000 hours that could not physically have been worked. The Justice Department paired the charges with the expansion of its Northeast Health Care Fraud Strike Force into Philadelphia, a structural move that puts a standing federal-state task force in a market that had not previously carried one, evidence that the enrollment-moratorium-era enforcement model built in California, Nevada, Arizona, and Texas is now exporting itself to new geographies rather than staying contained to the original hotspots. Confidence: High on the charges, Medium on how quickly the Strike Force model spreads to additional cities. Sources: The Fraud Division Announces Charges Against 19 Defendants for Medicaid Home Health Aid Schemes, Department of Justice, DOJ Charges 19 In Alleged $4M Medicaid, Medicare At-Home Care Fraud Scheme, Home Health Care News.

Who’s Buying

Addus HomeCare says its first deal in a new state is already beating projections, and it wants more. The personal-care, home health, and hospice consolidator’s May 2026 acquisition of HomeCourt Home Care, its entry into Indiana, has “slightly” outperformed expectations on client volume, and Chief Executive Officer R. Dirk Allison told investors this month “our appetite for deals, whether they’re small or large, that’s part of what we do,” with a second Indiana acquisition already lined up. Separately, nonprofit Chapters Health System completed its affiliation with Oregon’s Housecall Providers on August 5, 2026, a reminder that consolidation in this vertical is not only a private-equity story: nonprofit systems are still building multi-state home-based primary care and hospice footprints even as Medicare-certified deal volume overall slowed sharply in the second quarter. Confidence: High. Sources: Addus HomeCare Eyes More M&A As HomeCourt Deal Exceeds Expectations, Home Health Care News, Chapters Health Finalizes Housecall Providers Affiliation, Hospice News.

Clinical Policy

Every hospice patient will get a new disclosure document starting in October, and CMS just extended a telehealth flexibility operators had been bracing to lose. The FY2027 final rule requires hospices to give every Medicare beneficiary a written election statement addendum within the first five days of electing hospice, spelling out in plain language which conditions, drugs, and services CMS considers unrelated to the terminal illness and therefore not covered, plus the beneficiary’s right to appeal a coverage determination. The same rule extends telehealth-based face-to-face recertification encounters through December 31, 2027, a lifeline for hospices in rural or workforce-short markets, effective October 1, 2026. Confidence: High. Source: CMS Posts FY 2027 Hospice Wage Index Final Rule, CHAP.

Workforce is the other clinical-policy shift operators cannot plan around yet. A Supreme Court ruling has cleared the way for Haiti’s Temporary Protected Status (TPS) to expire, and industry groups estimate roughly 13,000 Haitian nursing assistants and 8,000 caregivers work across home health, home care, and Program of All-Inclusive Care for the Elderly (PACE) providers nationally; Home Health Care News reports agencies are already losing longtime aides and turning away referrals as work authorizations lapse. The House has passed a three-year TPS extension bill, but it is still awaiting Senate action, so the staffing risk remains open. Confidence: Medium, the workforce estimates come from advocacy-group reporting rather than a federal labor count, and the legislative outcome is unresolved. Sources: Staffing Gaps, Turned-Away Referrals: The Cost Of Ending TPS For Haitian Home Care Workers, Home Health Care News, New Report Warns Ending TPS for Haiti Could Trigger Care Workforce Crisis, LeadingAge.

The Operator Metric

167 percent. That is how much higher for-profit hospices’ non-hospice Medicare spending per day ran versus nonprofit hospices in FY2024, according to the data CMS just used to justify its new SSVI fraud score. Every hospice operator, not only the ones already flagged, should be pulling their own non-hospice spending per patient day this quarter and benchmarking it against nonprofit peers, because CMS has now published the exact claims-based logic, nine measures on a 0-to-16 scale, it will use to decide who gets a targeted-education letter and who gets an audit. A for-profit operator running meaningfully above that gap should treat it as a board-level compliance metric now, months before FY2024 and FY2025 SSVI scores translate into enforcement action. Confidence: Medium, CMS has published the scoring methodology and the underlying spending gap but has not yet said how SSVI scores map to specific enforcement triggers. Source: Fiscal Year 2027 Hospice Wage Index and Payment Rate Update, CMS.