CMS Finalizes 2025 Hospice Payment Rule: A Modest Increase Amid Rising Challenges

WASHINGTON D.C. — On Tuesday, the U.S. Centers for Medicare & Medicaid Services (CMS) finalized the 2025 hospice payment rule, approving a 2.9% increase in per diem payments. While this represents a slight improvement over the initially proposed 2.6% raise, NPHI argues that it still falls short in addressing the current challenges facing the hospice community.

Per diem payments are the daily rates that hospice providers receive from Medicare to cover the cost of care for each patient. These payments are intended to support a range of services, including medical care, counseling, and other support for both patients and their families. The increase in these payments helps ensure that hospices have the necessary resources to provide high-quality end-of-life care.

Providers across the nation continue to grapple with significant issues, including inflation, rising labor costs, and the lingering effects of COVID-19. NPHI believes that the rate increases have not adequately addressed these financial pressures and will continue to make its case with CMS in the coming days and months ahead.

​​“NPHI is disheartened yet unsurprised by the finalized FY25 hospice payment rate update, which falls short in fairly compensating non-profit, community-based providers for their invaluable contributions to patients, families, and communities,” stated Tom Koutsoumpas, NPHI CEO. “Despite this setback, we appreciate many of the positive changes in this year’s rule and are committed to ongoing collaboration with CMS to ensure high-quality end-of-life care.”

The rule includes the following finalized changes:

  • Payment Update Percentage: Finalizes the 2025 hospice payment update percentage of 2.9%, resulting in an estimated increase of $790 million in payments from FY 2024. This comes from the 3.4% inpatient hospital market basket percentage increase, reduced by a 0.5 percentage point productivity adjustment.
  • Hospice Cap Amount: Sets the hospice cap amount for FY 2025 at $34,465.34, up from the FY 2024 cap amount of $33,494.01, reflecting the 2.9% payment update.
  • New Process Measures: Introduces two new process measures to the Hospice Quality Reporting Program (HQRP) – Timely Follow-up for Pain Impact and Timely Follow-up for Non-Pain Symptom Impact, expected to begin in FY 2028.
  • OMB Statistical Area Delineations: Adopts the most recent OMB statistical area delineations, revising the existing core-based statistical areas (CBSA) based on data from the 2020 Decennial Census.
  • CAHPS Survey Changes: Implements changes to the CAHPS survey based on the results of a mode experiment, including the addition of a web-mail mode and a shortened, simplified survey.
  • Social Determinants of Health: Summarizes stakeholder input on potential data collection items related to four Social Determinants of Health items relevant to the HQRP.

NPHI remains committed to advocating for fair compensation for hospice providers — ultimately ensuring that patients receive the highest quality end-of-life care. We will continue to engage with CMS to address these challenges and to support our dedicated providers who deliver compassionate care to patients and their families.

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The National Partnership for Healthcare and Hospice Innovation (NPHI) is a membership organization comprising nonprofit community-integrated hospice and palliative care providers. These members are dedicated to ensuring patients and their families have access to care that reflects their individual goals, values, and preferences. Representing providers from across the nation, NPHI and its members help design more innovative and effective models of care, advocate for comprehensive and community-integrated care customized to meet each person’s unique needs, and build collaboration between national thought leaders, decision-makers, and other healthcare stakeholders to improve hospice care. Learn more about NPHI at nphihealth.org 

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