CMS Recalculated the FY 2027 Hospice Wage Index. Check Claims Before October 1.

CMS issued Transmittal R13976CP on September 30 to correct a technical error in the FY 2027 hospice wage index. The transmittal replaces the August instruction and recalculates wage-index values for all core-based statistical areas and rural areas. CMS says the other information in the earlier instruction remains unchanged.

The two operational dates matter. The corrected payment values apply to hospice dates of service beginning October 1, 2026. October 5 is the Medicare contractor implementation date. A claim with an October 1 date of service should therefore be priced from the corrected FY 2027 data even if a contractor’s system change is scheduled several days later.

What the correction changes

The wage index adjusts the labor portion of the hospice payment for geographic cost differences. A revised county or CBSA value can change the payment calculation even when the level of care and national base rate are otherwise unchanged. CMS says the recalculation covers every CBSA and rural area, so hospices should check the updated file for each service location they bill.

The FY 2027 update also has a separate annual payment update. CMS’s final rule describes a 2.3% increase for hospices that meet quality-reporting requirements and a 1.7% decrease for those that do not. Those percentages do not replace the location-specific wage-index adjustment. The hospice aggregate cap for the cap year beginning October 1, 2026 is $36,174.75 per beneficiary; the cap calculation is a separate reconciliation from the per-claim wage-index calculation.

A short pre-cutover check

Before the first October service is submitted, compare your billing and pricing setup with the corrected CMS file:

• Download the revised FY 2027 hospice wage-index and payment-rate files linked from CMS, and record the file version and retrieval date.
• Confirm the CBSA or rural classification for each service location. Where CMS requires a special 50xxx code, validate the county-specific code and the applicable claim value code (61 or G8) against the contractor instructions.
• Reprice representative claims for each level of care and location with dates of service on September 30 and October 1. Check that only the intended fiscal-year inputs change.
• Track October claims processed before contractor implementation. Reconcile expected and adjudicated amounts after October 5 and investigate differences by location, rate, and file version.

Keep the correction scoped

This is a hospice payment update; it does not change the wage-index rules for unrelated physician or facility claims. CMS identifies this as a technical correction to the hospice instruction and says the remaining instruction information is unchanged. Use the corrected CMS files and your Medicare Administrative Contractor guidance for claim-level decisions rather than applying a single national amount to every location.

For hospices, the immediate control is straightforward: make sure the FY 2027 table used for October 1 dates of service contains the corrected geographic values, then monitor claims that cross the October 5 implementation window.