Medicare Pays Nearly $1,000 More Per Stay at Private Equity-Owned Hospices

Medicare spends more on hospice care when the hospice is owned by a private equity firm, according to a study reported by Healthcare Dive on November 4, 2026. Researchers found that Medicare paid nearly $1,000 more per hospice stay at facilities owned by private equity firms compared with other hospices. According to the study as reported by Healthcare Dive, the authors said this spending gap may be linked to private equity owners increasing admissions of patients who may not clearly meet hospice eligibility criteria, though that explanation is the researchers' interpretation rather than a confirmed finding about any specific company.

Hospice is a Medicare Part A benefit available to people with a terminal diagnosis and a life expectancy of six months or less if the illness runs its expected course. Medicare pays hospices a flat daily rate per enrolled patient rather than billing separately for each visit or service. That per-diem structure means a hospice's revenue grows with the number of days a patient stays enrolled, not necessarily with how much hands-on care is delivered on any given day, a detail that helps explain why ownership and admissions practices can affect total Medicare spending even when the daily payment rate itself does not change.

Private Equity Has Been Buying Up Hospice Agencies for Years

Private equity firms have steadily increased their presence in the hospice industry over the past decade, drawn by Medicare's predictable per-diem payment model and a market still made up of many small, independent agencies available for acquisition. Because the daily hospice rate is fixed by Medicare regardless of ownership type, profit margins depend heavily on enrolling patients who need relatively light daily care but remain on hospice for extended periods, or on managing costs tightly during each enrolled day.

The new findings are notable because the payment rate itself does not vary by who owns a hospice. If Medicare spending per stay is higher at private equity-owned facilities, as the study reports, the difference likely reflects longer average lengths of stay, higher-cost levels of care being billed, or a combination of the two, rather than a different rate structure. That is why the researchers' focus on admissions practices, as described in Healthcare Dive's coverage, is central to interpreting the cost gap rather than a side note.

Key Takeaway

The study's authors suggested, according to Healthcare Dive's reporting, that private equity ownership may be associated with more admissions of patients who do not clearly meet hospice eligibility standards. That is a researchers' hypothesis tied to the spending pattern they observed in Medicare data, not a confirmed finding of wrongdoing by any named hospice or company. Families should treat it as a reason to ask more questions before enrolling a loved one in hospice, not as a reason to avoid hospice care altogether.

What This Means for Your Coverage and Out-of-Pocket Costs

Higher Medicare spending on hospice stays does not translate directly into higher out-of-pocket costs for most beneficiaries. Under the Medicare hospice benefit, patients typically owe no deductible for hospice services and only small copays, generally up to $5 for prescription drugs related to pain and symptom management and a limited coinsurance amount for inpatient respite care. The bigger concern raised by this study is program-level: rising hospice spending driven by admissions patterns, rather than care intensity, puts pressure on the Medicare Trust Fund that all beneficiaries eventually share.

Hospice coverage generally works the same way whether a beneficiary has Original Medicare or a Medicare Advantage plan, since hospice has historically been billed through Original Medicare Part A even for people enrolled in Medicare Advantage. That means the choice of which hospice agency to use is almost always the patient's and family's decision, not something dictated by a Medicare Advantage plan's network, which is one reason researchers and advocates say ownership transparency matters for this particular benefit.

Questions to Ask Before Choosing a Hospice Provider

Families evaluating hospice care for a loved one in 2026 can take a few concrete steps to look past marketing and get a clearer picture of a provider:

Ask who owns the hospice and whether ownership has changed recently. Ownership and quality information for Medicare-certified hospices is available through CMS's Care Compare tool.
Ask about the hospice's average length of stay and live discharge rate, meaning how often patients are discharged alive rather than remaining on hospice through end of life, and compare those figures with other local hospices.
Ask the referring physician exactly which diagnosis or decline in condition supports a hospice recommendation right now, and whether a second opinion is appropriate.
Ask how often a nurse, physician, or aide will actually visit, and what the plan is if the patient's needs increase.

Readers who are unsure whether hospice is the right level of care, or who want help comparing broader Medicare coverage options, should talk with the patient's physician about eligibility and consider contacting a licensed Medicare agent or a State Health Insurance Assistance Program (SHIP) counselor for free, unbiased guidance. This article summarizes reported research and is not medical or legal advice.