The Hospice Election Addendum Becomes Mandatory October 1 — Your 13-Day Compliance Sprint
The hospice election statement addendum becomes mandatory for every Medicare hospice election beginning October 1, 2026. This article gives hospice owners a practical 13 day sprint for updating admissions, EMR templates, physician documentation, staff training, and audit files. It also explains how HQRP penalties, SSVI oversight, and inconsistent records can affect cash flow, buyer underwriting, and sale price. Owners preparing for succession or a strategic acquisition can use the checklist to reduce risk before the new rule takes effect.
9/18/20268 min read
Beginning October 1, 2026, every Medicare hospice election must include a written election statement addendum, whether or not the beneficiary or representative requests one. This guide explains the new five day and three day deadlines, the documentation requirements, and the practical steps hospice owners should complete before implementation.
Quick Scan Summary
Who this is for
Hospice owners and operators with $2 million to $10 million in annual revenue
Medical directors, physician designees, clinical leaders, and admission teams
Owners preparing for succession, a sale, or a strategic partnership with an acquiring organization
Agencies that need to strengthen audit files, EMR workflows, and buyer underwriting readiness
Key takeaways
The election statement addendum becomes mandatory for all Medicare beneficiaries electing hospice care on or after October 1, 2026.
The initial addendum must be provided in writing within the first five days of the election effective date and filed with the election statement.
A plan of care change that affects a related or unrelated determination triggers a three day update deadline.
The addendum is required even when every item, service, and drug is determined to be related and covered.
HQRP noncompliance can turn the FY 2027 payment update into a 1.7 percent reduction compared with the prior year.
Clean, consistent records will matter not only for compliance, but also for audit defense, sale readiness, and buyer underwriting.
What changes on October 1
Under the FY 2020 Hospice Final Rule, 84 FR 38484, hospices were required to provide the addendum only upon request from a beneficiary, representative, non hospice provider, or Medicare contractor. CMS now says that approach did not achieve its accountability and transparency objective.
The CMS FY 2027 final rule fact sheet makes the addendum mandatory for all Medicare beneficiaries electing hospice care. The Federal Register final rule confirms that the regulation is effective October 1, 2026.
The addendum must identify conditions, items, services, and drugs the hospice determines are unrelated to the terminal illness and related conditions. It must also explain what will not be covered by the hospice benefit.
This is not a new clinical obligation to review the patient’s conditions. Hospices already must assess the patient, develop a plan of care, and determine which services are needed. The change formalizes how those determinations are communicated to the patient, representative, non hospice providers, and Medicare contractors.
The addendum timeline and required elements
The initial addendum must be provided in writing within the first five days of the hospice election effective date. It must be filed with the election statement and remain available in the patient’s medical record.
If a change to the plan of care affects a related or unrelated determination, the hospice must update the addendum within three days. The updated version must be provided in writing to the patient or representative and maintained in the record.
The ACHC guidance from Susan Mills, RN highlights the following required elements:
Conditions determined to be unrelated to the terminal illness and related conditions
Items, services, and drugs associated with those unrelated conditions that are not covered by hospice
A written clinical explanation in language the patient or representative can understand
The name and signature of the patient or representative
The date signed
The date the hospice furnished the addendum
A clear record that the patient’s review was individualized
The medical director or physician designee is responsible for the medical component of the review and must consider both related and unrelated conditions. A generic diagnosis driven form is not a substitute for patient specific clinical judgment.
The addendum is still required when the hospice determines that all items, services, and drugs are related and covered. In that situation, the record should clearly state that an individualized review was completed and that all identified care is covered under the hospice benefit.
If the patient dies, revokes the hospice election, or is discharged before the applicable five day or three day deadline, the hospice does not have to furnish the addendum or update to the patient. However, the hospice must document why it was not furnished in the medical record.
A signature confirms receipt. It does not mean the patient agrees with the hospice determination. If the patient or representative refuses to sign, document the reason on the addendum, place the addendum in the patient record, and retain evidence that the document was provided. Payment is not blocked solely because the patient or representative refused to sign, provided the refusal is documented appropriately.
What the industry is pushing back on
The McKnight’s Home Care coverage reflects broader provider concerns about the speed and complexity of the October 1 changes.
In a September 10, 2026 letter to CMS, the National Alliance for Care at Home said it supports the transparency objective but has “serious concerns about the ability of hospice providers, their EMR/EHR vendors and MACs to fully operationalize the requirements in the short three weeks that remain before the implementation date,” according to Katie Wehri, the Alliance’s vice president of regulatory affairs, quality and compliance.
The Alliance also flagged several practical issues:
The three day update deadline may be difficult to meet, including for items determined to be unrelated to the terminal illness.
Providers remain confused about whether the form must be digital, electronic, or written.
CMS should provide sub regulatory guidance before imposing enforcement penalties.
CMS declined to delay implementation, noting that the addendum framework has existed since 2020. That response means owners should treat October 1 as a firm operational deadline, not a target date.
Provider concerns are understandable. Admission teams are already explaining a major change in care philosophy to patients and families. Physicians need time to develop patient specific clinical explanations. Operators must also ensure that the addendum, plan of care, clinical notes, claims, and communications with outside providers all align.
Why this matters beyond compliance
For a hospice owner, the risk is not limited to a survey finding. Inconsistent documentation can create payment risk, audit exposure, delayed collections, and difficult questions during a sale process.
Consider an illustrative owner we will call Maria. Her hospice produces $1 million in adjusted EBITDA on $6 million in revenue. Her team provides excellent care, but the addendum is stored separately from the election statement, physician explanations are inconsistent, and plan of care updates are not always linked to revised forms.
A buyer may not reject the agency. However, the buyer may apply a lower valuation multiple until the documentation risk is understood and corrected.
These are illustrative scenarios, not market guarantees. The difference between a 6.0x and 5.0x multiple on $1 million of EBITDA is $1 million in enterprise value. The difference between 6.0x and 4.0x is $2 million.
The new addendum is one part of a broader buyer review. A buyer will also examine whether the agency can maintain quality reporting, manage physician documentation, control key person dependence, and produce a reliable medical record without the owner personally fixing every exception.
CMS also finalized the Service and Spending Variation Index, or SSVI. The index uses nine claims based measures across FY 2024 and FY 2025 data. Higher scores can signal potential utilization or non hospice spending concerns and may lead to targeted education or oversight.
The FY 2027 rule also includes a Care Compare icon for hospices that fail to submit quality data or submit less than the required 90 percent. The icon will take effect no earlier than FY 2028.
HQRP compliance is already a financial issue. CMS reported noncompliance rates of 22.06 percent in FY 2024, 23.53 percent in FY 2025, and 20.37 percent in FY 2026. HOPE admission, HOPE Update Visit, and HOPE discharge data must be submitted within 30 days of the applicable date.
For FY 2027, compliant hospices receive a 2.3 percent payment update, based on a 3.2 percent market basket increase minus a 0.9 percentage point productivity adjustment. Hospices that fail to submit required quality data receive 2.3 percent minus four percentage points, resulting in a 1.7 percent reduction compared with the prior year’s rate.
CMS also finalized an aggregate cap of $36,174.75, up from $35,361.44. The agency is recalculating FY 2027 payment rates and wage index values after identifying a technical error. A correction notice is pending, so owners should monitor CMS updates before finalizing budgets or reimbursement projections.
Your 13 day compliance sprint
October 1 is 13 days away. Compress this plan accordingly, and assign one executive owner to drive it.
Days 1 through 2: Map the workflow
Identify every Medicare admission step from referral through election.
Assign ownership for the addendum, clinical explanation, signature, filing, and follow up.
Define how admissions staff will flag a plan of care change that affects the addendum.
Confirm how written copies will be delivered to patients and representatives.
Days 3 through 5: Fix the EMR and forms
Add a mandatory addendum task to every Medicare hospice admission.
Link the addendum directly to the election statement.
Create a clear field for “all items, services, and drugs related and covered.”
Add fields for the date furnished, signature, refusal reason, and update date.
Build a three day alert for plan of care changes.
Test written delivery and electronic supplemental delivery separately.
Days 6 through 8: Train clinicians and physicians
Train nurses on documenting related and unrelated determinations.
Train physicians and physician designees on patient specific clinical explanations.
Use examples involving medications, wound care, oxygen, supplies, and durable medical equipment.
Reinforce that the terminal diagnosis is not the only condition considered.
Explain that the patient signature acknowledges receipt, not agreement.
Practice documenting refusal, death, revocation, and discharge exceptions.
Days 9 through 10: Test the audit file
Pull a sample of recent admissions and confirm that each file shows:
Election effective date
Election statement
Addendum
Clinical explanation
Physician review
Patient or representative signature, or documented refusal
Date furnished
Plan of care alignment
Related communications with outside providers
Updated addendum when the plan of care changed
Days 11 through 13: Review financial exposure
Confirm HOPE submissions are reaching the 90 percent threshold within 30 days.
Review SSVI related metrics, including non hospice spending, visit patterns, live discharges, and return admissions.
Quantify the impact of a possible four percentage point APU penalty.
Document corrective actions and responsible owners.
Preserve training records, EMR testing evidence, and audit results in a compliance file.
One additional October 1 change reduces administrative burden. A written physician discharge order may come from the hospice medical director, physician designee, or physician member of the interdisciplinary group. Update the discharge policy and EMR routing so the expanded authority is used correctly.
Plain Language Glossary
Election statement addendum: A written document explaining which care, items, services, or drugs the hospice considers unrelated and will not cover.
Relatedness determination: The clinical decision about whether a condition or service is connected to the terminal illness or related conditions.
HQRP: The Hospice Quality Reporting Program.
HOPE: The Hospice Outcomes and Patient Evaluation tool used for required quality data.
SSVI: A CMS score using nine claims based measures to identify potential hospice utilization and non hospice spending concerns.
APU penalty: The reduction applied to the annual payment update when required quality data is not submitted.
Buyer underwriting: The process an acquiring organization uses to assess financial, operational, compliance, and payment risk before determining price and deal terms.
So what should you do now?
Treat October 1 as a firm deadline and assign one executive owner for implementation.
Make the addendum part of the admission workflow now, even if your EMR build is not perfect.
Test whether the addendum, plan of care, physician documentation, claims, and outside provider communications tell the same story.
Preserve every training, testing, exception, and corrective action record for future audits and buyer diligence.
Partner with Senate Healthcare
Senate Healthcare LLC is the buyer and strategic partner pursuing acquisitions of quality home health or hospice agencies. We understand that many owners in the $2 million to $10 million revenue range are managing regulatory change while also thinking about burnout, succession, and the future value of the business.
Your agency does not need to be perfect today to begin a confidential conversation. If you are considering a sale or partnership, Senate Healthcare can evaluate the business, understand the operational context, and explore a transition designed to reduce risk while protecting the quality of care you built.
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