Costs & IRMAA
GAO Urges Congress to Overhaul Medicare Hospice Payments, Citing an Estimated 7.6 Billion Dollar Overspending Gap Over Three Years
A June 2026 federal audit found that Medicare's flat daily hospice rate effectively paid low-visit programs about twice as much per visit as high-visit ones, costing billions more than a visit-based approach would have over a three-year period.
By the Goodsurance editorial teamSeptember 13, 2026
Medicare spending on hospice care has more than doubled in a decade, rising from 15.5 billion dollars in 2015 to 27.5 billion dollars in 2024. A June 2026 report from the Government Accountability Office examined how that money is distributed.
Medicare pays hospices a flat daily rate regardless of how many nurse or aide visits occur. GAO found that low-visit hospices averaged 2.5 weekly visits per patient, while high-visit hospices averaged 5.5 visits, yet both received the same daily payment. The result was that Medicare effectively paid low-visit programs about twice as much per individual visit as high-visit ones.
GAO found Medicare's flat hospice daily rate may have cost 7.6 billion dollars more than a visit-based approach over three years and urges Congress to overhaul the payment system.
To estimate the cost of that structure, GAO compared what Medicare actually spent on routine home care hospice from 2022 to 2024 with what it would have spent under per-visit rates similar to those used in the home health benefit. Medicare spent 16.7 billion dollars over those three years. Under a per-visit approach, the estimated cost would have been approximately 9.1 billion dollars, a difference of 7.6 billion dollars.
GAO also noted that the current payment structure may create incentives for programs to schedule fewer visits, potentially affecting care quality for patients near the end of life.
The report recommended that Congress consider directing the Secretary of Health and Human Services to revise the hospice payment system to improve efficiency. CMS agreed with the analysis and said it would work with Congress on reform options. Any change would require congressional action.
In plain words
Hospice programs help people near the end of life stay at home. Medicare pays these programs a set amount each day no matter how many times a nurse or aide visits. Some programs visit patients less often but still get paid the same. A government report found this cost Medicare about 7.6 billion dollars more than needed over three years. Medicare spent 16.7 billion dollars when it could have spent about 9.1 billion under a different payment approach. The report also noted that fewer visits may mean patients get less care. The report told Congress to change how hospice programs are paid so programs that visit more often get paid more.
Understand the basics first
Source: GAO
Read at the source →