Related vs. Unrelated: Getting the Hospice Election-Statement Addendum Right

Sep 11

3 min read

As of the FY 2027 final rule, the hospice election-statement addendum is mandatory for every patient who elects hospice — not just those who ask for it (CMS-1851-F). The addendum is the written list of conditions, items, services, and drugs the hospice has determined are unrelated to the terminal illness and therefore not covered under the hospice benefit. CMS made it mandatory because non-hospice spending kept climbing, and it now sits alongside the new SSVI integrity score as a top compliance focus. Getting the "related vs. unrelated" determination right is where hospices win or lose that scrutiny. Here is how the addendum works and how to operationalize it.

Key Takeaways

The addendum is now mandatory for all electing beneficiaries (previously on request only).
It lists what the hospice deems unrelated to the terminal illness and not covered by the benefit.
CMS made it mandatory because non-hospice Part A/B spending grew from FY 2020-2024.
The "related vs. unrelated" determination drives both coverage and your SSVI profile.
Over-designating items as "unrelated" shifts cost to Medicare and raises integrity-review risk.
It must be provided to the beneficiary — and to non-hospice providers who furnish services during the election.

What the Addendum Is

When a beneficiary elects hospice, the hospice takes responsibility for virtually all care related to the terminal illness and related conditions. The addendum documents the exceptions — the specific diagnoses, items, services, or drugs the hospice has decided are unrelated and will not cover. It exists to give patients transparency about what they may still be billed for outside the benefit.

Element	Detail	Source
Who must receive it	Every beneficiary electing hospice	CMS-1851-F
What it lists	Conditions/items/services/drugs deemed unrelated and non-covered	CMS-1851-F
Also provided to	Non-hospice providers furnishing services during the election	CMS FY 2020 rule
Prior rule	Provided only upon request	CMS-1851-F

Why "Related vs. Unrelated" Is the Whole Game

Almost everything a hospice patient needs is presumed related to the terminal prognosis and therefore the hospice's financial responsibility. The addendum is where a hospice draws the line. That line has three consequences:

If the hospice designates an item...	Consequence
Related (covered)	Hospice bears the cost under the per diem
Unrelated (not covered)	Cost shifts to Medicare Part A/B or the patient
Unrelated too aggressively	Non-hospice spending rises → higher SSVI score → audit risk

CMS has been explicit: it is "unusual and exceptional" for a terminally ill patient to need substantial services outside the hospice. A pattern of designating many items as unrelated is exactly what the new SSVI is built to detect.

How to Operationalize the Mandatory Addendum

Making it mandatory is an operational lift. Build it into admissions.

Add addendum generation to the election workflow so every admission produces one — no more waiting for a request.
Base determinations on the clinical record, and document the reasoning for each "unrelated" item.
Train the interdisciplinary group on relatedness so determinations are consistent across clinicians.
Reconcile the addendum against actual claims — if items you called "related" are being billed to Part B, you have a coverage and compliance gap.
Keep a defensible file; the addendum, the clinical rationale, and the claims should tell one consistent story.

Because the addendum ties directly to what the hospice pays for versus what shifts to Medicare, it also affects your cost structure and cap position. Clean hospice bookkeeping and cost tracking keeps the coverage decisions and the financial records aligned — which is precisely what protects you under the FY 2027 oversight regime.

Why This Is Urgent in 2026

The mandatory addendum landed in the middle of a hospice enforcement wave. A U.S. House Oversight investigation into California hospice billing and CMS's public SSVI score both scrutinize the non-hospice spending your related-vs-unrelated determinations create — the exact figures the addendum documents. With a six-month hospice enrollment moratorium effective May 13, 2026 also in force, getting these determinations right and consistent with your claims is a 2026 priority, not a paperwork afterthought (U.S. House Committee on Oversight, 2026; CMS FY 2027 Final Rule).

Sources

Centers for Medicare & Medicaid Services (CMS), FY 2027 Hospice Wage Index and Payment Rate Update Final Rule (CMS-1851-F), July 2026
CMS, FY 2020 Hospice Final Rule (84 FR 38484) — original addendum requirement
Medicare Payment Advisory Commission (MedPAC), Report to the Congress, Chapter 10, March 2026

Last updated: September 2026. Reflects the FY 2027 hospice final rule effective October 1, 2026.

Soriaga & Associates, LLC is a CPA firm with 25+ years of hospice and home health accounting experience. Schedule a free consultation for help aligning coverage determinations with your books.