"Palliative Care Is Not Hospice" — What Two Major Groups Just Told CMS About the New Community-Based Benefit

CMS has opened the door to palliative care under the existing home health benefit, but national provider groups say the opening is too narrow. This article explains why the field is calling for a separate prognosis-free benefit with dedicated codes and monthly team payment. It also shows how owners can prepare their operations, payer data, and valuation story before the policy is finalized. For home health or hospice owners, the opportunity is not to budget hypothetical revenue, but to build capabilities buyers and payers can verify.

9/28/20267 min read

CMS has proposed clarifying that palliative care may be delivered through the existing Medicare home health benefit. The National Alliance for Care at Home and LeadingAge are asking for something broader: a distinct, prognosis-free community-based benefit with dedicated codes and payment for the full interdisciplinary team.

Quick Scan Summary

Who this is for

Home health or hospice owners with $2 million to $10 million in annual revenue
Palliative care program leaders evaluating reimbursement and operating models
Owners preparing for a sale, succession event, or strategic partnership
Agencies assessing how payer mix and recurring revenue may affect buyer underwriting

Key takeaways

CMS has not finalized a new Medicare palliative care benefit.
The proposed home health clarification would reach only patients who are homebound and need skilled care.
The National Alliance and LeadingAge want eligibility based on serious illness and patient need, not prognosis or homebound status.
Dedicated assessment, reassessment, and monthly management codes would make specialty palliative care easier to identify and fund.
Owners should treat this as a readiness opportunity, not as a guaranteed future revenue line.

What CMS actually proposed

CMS’s CY 2027 Home Health PPS proposed rule would clarify that palliative care may be furnished and billed under the existing Medicare home health benefit for eligible patients with serious illness.

That matters because palliative care is not the same as hospice. Palliative care can be provided at any stage of serious illness, including alongside curative or disease-directed treatment. Hospice is a distinct Medicare benefit for people who meet terminal prognosis requirements and elect hospice.

The proposed clarification would allow skilled palliative services to be delivered earlier in the illness course. CMS also plans to issue sub-regulatory guidance with examples of skilled palliative care after the final rule.

The limitation is eligibility. Patients would still need to satisfy home health requirements, including homebound status and an intermittent skilled need. As Jill Schwartz-Chevlin, MD, chief medical officer of Vynca, explained, many people who need interdisciplinary palliative services are seriously ill without being homebound or requiring skilled home health.

Fred Bentley of Bentley Health Strategies described the proposal as a positive but incremental step. It may expand access for a relatively small group of fee-for-service Medicare beneficiaries, but it is not a watershed moment for community-based palliative care.

Why the field says it is not enough

The McKnight’s Home Care report summarizes the central concern. The home health clarification recognizes palliative care, but it does not create a benefit designed around the way specialty palliative care is actually delivered.

Kyle Edmonds, MD, of the American Academy of Hospice and Palliative Medicine, supports the clarification “as far as it goes.” He also noted that the existing home health payment structure remains a flat 30-day amount, regardless of visit volume, and that medical review may treat a stable patient who remains on service for a year as a risk.

His conclusion is important for operators: CMS has named palliative care without necessarily making it more accessible or more reimbursable.

A home health or hospice owner should see three separate gaps:

Access gap: Many seriously ill patients are not homebound.
Payment gap: Existing codes do not fully support longitudinal interdisciplinary work.
Team gap: Social workers, chaplains, and other team members may lack a sustainable billing pathway.

The National Alliance for Care at Home told CMS that palliative care should occur throughout the patient journey, not only within home health or near the end of life. That position was also emphasized in Hospice News coverage.

What the groups asked CMS to build

The National Alliance and LeadingAge submitted comments on September 14, 2026, responding to the CY 2027 Physician Fee Schedule proposed rule.

Both groups urged CMS to avoid tying eligibility to a certified life expectancy. LeadingAge wrote that requiring limited life expectancy certification “converts a conversation about symptom relief into conversation about dying.” That can discourage people from accepting care, including for cultural and religious reasons.

They also recommended payment that recognizes the entire team rather than only the initial clinician encounter.

The Alliance explained that a comprehensive assessment must address symptoms, function, psychosocial circumstances, caregiver distress, goals, and values. Existing Evaluation and Management codes do not adequately capture that work.

LeadingAge made a similar point in its September 14 comment letter: “If CMS pays for the assessment and not the follow-through, it will have purchased a document rather than a service.”

LeadingAge also pointed to Hawaii and New Jersey, where community palliative care benefits use three codes for initial assessment, periodic reassessment, and monthly interdisciplinary care. The group urged CMS to build on those models rather than start over.

The eligibility fight: prognosis versus need

Both organizations oppose a homebound requirement for a permanent community-based benefit.

The National Alliance recommended a two-factor framework:

A serious or potentially life-limiting diagnosis
Demonstrated need, such as high symptom burden, declining function, caregiver strain, or recent emergency department visits or hospital admissions

LeadingAge recommended similar pathways, including a validated functional assessment such as the Palliative Performance Scale or Karnofsky Performance Status. It also suggested claims-identifiable utilization standards, such as two emergency department visits within six months or one acute hospitalization within twelve months.

Caregiver strain should be assessed as part of the care plan rather than used as the only eligibility gate.

For owners, this design debate has an operational consequence. A benefit based on need could produce a broader referral funnel than a benefit based on prognosis. Referrals may come from oncology, cardiology, nephrology, primary care, Medicare Advantage plans, accountable care organizations, and existing home health or hospice relationships.

Sustaining the team: why the monthly bundle matters

The LeadingAge comments identify social services and spiritual care as major revenue gaps.

As many as 79% of patients report unmet spiritual needs. National Palliative Care Registry data indicate that 46% of adult palliative care programs have no access to chaplains, and only about one in four provide spiritual care in ambulatory settings.

A monthly bundle could support the work that fee-for-service billing often misses. New Jersey conditions the monthly claim on at least one documented team member interaction with the beneficiary and one documented internal team meeting. Hawaii requires 24/7 access, a monthly team visit, a quarterly in-person prescribing-clinician visit, and regular interdisciplinary meetings.

That structure also creates a clearer diligence story. A buyer can evaluate whether an agency has:

A defined interdisciplinary team
A standardized assessment tool
Documented monthly activity
Caregiver strain screening
A 24/7 access line
Clear referral and escalation protocols

What this means for agency economics and valuation

A prognosis-free palliative benefit with a monthly bundled code would create a recurring revenue line that is different from traditional visit-based home health economics.

It could also strengthen payer discussions. Medicare Advantage plans and accountable care organizations already evaluate community palliative care as a way to manage utilization and support members with serious illness. A Medicare benefit would provide a clearer benchmark for rates, documentation, and outcomes.

Consider an illustrative agency with $700,000 in normalized EBITDA:

The difference is $1.175 million in implied value. The example assumes the additional $150,000 is stable, contracted margin and that the agency reduces referral leakage while demonstrating reliable delivery. It is illustrative, not a market quote.

A buyer will not value a proposal or an untested program as if it were contracted earnings. Underwriting will focus on payer agreements, contribution margin, referral retention, staffing costs, documentation, denial history, and whether the service depends entirely on the owner.

The McKnight’s analysis of the proposed benefit makes clear that the benefit remains limited. Owners should build capability before building a budget around it.

How to get ready now

Map your current palliative referrals by diagnosis, payer, referral source, homebound status, skilled need, and hospice conversion.
Create a standardized assessment that captures symptoms, function, caregiver strain, goals, values, and recent acute care use.
Track net reimbursement per completed visit by payer, authorized visits compared with clinically ordered visits, denials and appeal overturn rates, authorization labor hours per 100 Medicare Advantage episodes, days in accounts receivable by payer, EBITDA margin by payer, revenue concentration by individual Medicare Advantage plan, and referral volume by payer and referral source.
Document the cost of social work, spiritual care, care coordination, after-hours coverage, and internal team meetings.
Separate current contracted revenue from possible future revenue in your forecast.
Review whether your team can support 24/7 access without creating unsafe staffing or owner dependence.
Keep a buyer-ready data room with payer contracts, referral reports, staffing schedules, quality results, financial statements, and compliance documentation.

Plain Language Glossary

Palliative care: Support that improves quality of life and manages symptoms during serious illness. It can occur alongside curative treatment.
Hospice: A separate Medicare benefit for people with a terminal prognosis who elect comfort-focused care.
Monthly bundle: One recurring payment for defined interdisciplinary services during a month.
HCPCS code: A billing code used to identify and pay for a healthcare service.
Buyer underwriting: The process a buyer uses to test revenue, risk, cash flow, and sustainable earnings before making an offer.
Referral leakage: Referrals that leave your organization because the agency cannot provide the needed service or maintain the relationship.

So what should you do now?

Treat the proposed benefit as a readiness play, not committed revenue.
Build the team and documentation standards that a future payer or buyer can verify.
Measure palliative referral demand and contribution margin separately from hospice and home health.
Review whether a sale or strategic partnership could provide the capital, infrastructure, and payer access needed to expand safely.

A forward-looking conversation with Senate Healthcare

Senate Healthcare LLC is the buyer and strategic partner pursuing home health or hospice agency acquisitions. We understand that owners may have a strong clinical model without a fully developed palliative care revenue line, or may be considering succession before CMS finalizes a new benefit.

If you are evaluating a sale, partnership, or transition, Senate Healthcare can discuss how your current operations, payer mix, team structure, and growth opportunities may fit a forward-looking acquisition strategy. Our focus is reducing transaction risk, protecting care quality, and helping owners explore an exit outcome that reflects the strength of the business they have built.

Resources:

Unlock Your 30-Minute Agency Succession Review

Maybe you're ready to expand your reach, or perhaps it's time to consider your legacy and the future of your business. Either way, it all begins with a conversation. Schedule a confidential, no-obligation call to explore what the future might hold for you and your business.

Complete the form, and we'll reach out for a chat...