For-Profit vs Nonprofit Hospice: What Medicare’s Own Data Shows

Medicare pays a for-profit and a nonprofit hospice exactly the same daily rate. What differs is what each does with it. Using Medicare’s own advisory commission, the HHS Inspector General and peer-reviewed studies rather than the marketing that fills most search results, this page sets out how the two differ on average, where the evidence is mixed, and how to check the specific hospice you are considering. Averages describe groups, not any single hospice: there are excellent and poor hospices of both kinds.

The short comparison

The pattern in those numbers: for-profit hospices are far more numerous, run at lower cost per day, keep patients longer and earn much higher Medicare margins. Nonprofit hospices are fewer, larger on average, spend more per day of care and, as a group, roughly break even on Medicare.

For-profits now run four in five hospices

MedPAC, the commission that advises Congress on Medicare, reports that in 2024 “about 82 percent of providers were for profit”, and that they cared for about 60 percent of Medicare hospice patients because their patient numbers are smaller on average. The shift has been fast:

For-profit hospices grew by about 60% in five years while nonprofits fell by about 15%. In 2024, Medicare spent $28.3 billion on hospice for 1.8 million beneficiaries, and 52.9% of Medicare decedents used it. MedPAC also cites research that private equity firms and publicly traded companies cared for about 25 percent of Medicare hospice patients in 2021.

Same rate, different spending

Medicare pays hospices a daily rate by level of care, adjusted only for local wages and for whether the hospice reports quality data. For fiscal 2027, which began on 1 October 2026, the routine home care rate is $236.35 a day for the first 60 days and $186.35 after that, continuous home care $1,726.50, respite $545.98 and general inpatient care $1,231.63, with an aggregate cap of $36,174.75 per beneficiary. CMS says the update is consistent for all providers, and ownership plays no part in the formula.

Where the money goes is the difference. MedPAC’s figures show nonprofit hospices spending $214 per day of care against $147 at for-profits, and earning a 2023 Medicare margin of -1.3% against 13.7%. Freestanding nonprofit hospices, those not attached to a hospital or home health agency, had a positive 2.6% margin. Higher spending per day can mean more staff time, more visits or higher overhead; the margin figures alone do not tell you which.

Longer stays are the other driver. Hospice is paid per day, so a patient enrolled for longer brings more revenue. In 2024 the average stay was “120 days compared with 71 days” at for-profit and nonprofit hospices, and MedPAC reports the gap holds within the same diagnoses. Longer stays are not wrong in themselves, since prognosis is uncertain, but very long stays and patients leaving hospice alive are what regulators watch.

What the oversight reports found

• Inspections. In a 2019 report, the HHS Office of Inspector General found that 20% of hospices had a serious deficiency in inspections from 2012 to 2016, and identified 313 poor performers. “For-profit hospices represent 67 percent of poor performers”, but OIG also noted that this is similar to their share of all hospices, 64% at the time. On that measure, for-profits were not over-represented.
• Inpatient billing. A 2016 OIG review of general inpatient care found that “for-profit hospices billed 41 percent of their GIP stays inappropriately”, compared with 27% for other hospices.
• Assisted living. In a 2018 review of hospices focused on assisted living residents, OIG found that all but seven of 97 were for-profit, with longer stays and higher Medicare payments.
• End-of-life visits and live discharges. The Government Accountability Office’s 2019 report found 83 hospices with no staff visits in the last three days of life, 80 of them for-profit, and 472 with live discharge rates of 50% or more, 462 of them for-profit. It also found that for-profit and nonprofit hospices had similar average scores on CMS quality measures. We read the GAO summary; the full report was not accessible to us.

What families report

The strongest evidence on experience comes from the CAHPS Hospice Survey, which asks family caregivers about the care their relative received. A 2023 study in JAMA Internal Medicine by Anhang Price, Teno and colleagues, covering 3,107 hospices, found “substantially worse care experiences in for-profit than in not-for-profit hospices”: 31.1% of for-profits scored at least three points below average, against 12.5% of nonprofits. A 2024 study in JAMA by Soltoff and colleagues found family ratings averaging 83.1 for nonprofit hospices, 81.2 for other for-profits and 79.8 for those owned by private equity or publicly traded companies, a gap the authors described as small to medium.

Both studies stress the variation within each group, and some for-profit hospices score well above average. There is also evidence pointing the other way on cost: MedPAC describes a 2025 study that found for-profit hospice enrollment led to large savings for some beneficiaries with dementia. On the other side, CMS reported in its fiscal 2027 rule that beneficiaries of for-profit hospices had, on average, nearly 167 percent higher spending per day on care outside the hospice benefit than those in nonprofit hospices.

Dementia, long stays and live discharge

Part of the difference in stays comes from who each kind of hospice serves. A 2011 study in JAMA by Wachterman and colleagues found that 17.2% of for-profit hospice patients had dementia, against 8.4% at nonprofits, and that for-profits were more likely to have patients enrolled for more than a year, 6.9% against 2.8%. Dementia makes the six-month prognosis that hospice requires harder to predict, so longer stays are partly expected. But MedPAC reports the gap holds within diagnoses: among patients admitted for neurological conditions in 2024, the average stay was 194 days at for-profits and 129 days at nonprofits.

Patients leaving hospice alive is the related warning sign regulators watch, because it can mean a patient was enrolled who was not yet eligible. Across all hospices the 2024 live discharge rate was 19.1%, according to MedPAC. An earlier study of 2005 to 2011 data by Stevenson and colleagues found live discharge rates of 21.0% and 20.2% at for-profit independent and chain hospices, against 14.6% to 15.9% at others, while stressing the substantial differences within each ownership group.

Private equity ownership

The fastest change inside the for-profit sector is ownership by private equity firms and publicly traded companies. A 2023 study in JAMA Network Open by Braun and colleagues found that hospices acquired by private equity saw their share of patients with dementia rise by 1.38 percentage points, and concluded that such owners select patients and sites of care to maximize profits. A 2026 study in Health Affairs found that after private equity acquisition, registered nurse minutes per 30 days fell 5.14 percent and social worker minutes 12.32 percent, with the reductions driven by four large acquirers. If ownership matters to you, ask not only whether a hospice is for-profit but who owns it.

What nonprofit status actually means

A nonprofit hospice is a 501(c)(3) charity. It does not mean the hospice cannot earn a surplus, as some marketing claims; freestanding nonprofits had a positive Medicare margin. It means any surplus stays in the organization, no owner takes profits, and the board is accountable for a charitable purpose. How that works in general is in what is a nonprofit organization.

It also brings transparency. A tax-exempt hospice must make its annual return available for public inspection, and its Form 990 lists officers, directors, key employees and the five highest compensated employees paid over $100,000. You can read any nonprofit hospice’s finances and executive pay; our guide to finding a Form 990 shows how, and charity CEO salaries gives context. A for-profit hospice files no public return. Some nonprofit hospices also raise donations to fund care and community programs; ask what a specific hospice offers rather than assuming.

How to check a specific hospice

1. Look it up on Medicare Care Compare. It shows family survey star ratings, the Hospice Care Index, and visits in the last days of life. CMS describes the measures on its quality reporting page.
2. Ask who owns it. For-profit or nonprofit, and if for-profit, whether it is owned by a private equity firm or a public company.
3. Ask about visits and after-hours care. How often a nurse visits, who answers at night and at weekends, and how quickly someone comes.
4. Ask about the levels of care. Whether it provides continuous home care and inpatient care when symptoms are hard to control, and where.
5. For a nonprofit, read the Form 990. Revenue, deficits, executive pay and program descriptions are all public.
6. Ask your state for inspection reports. State survey agencies inspect hospices for Medicare and can provide recent findings.

For nonprofit hospice boards

The numbers explain the pressure nonprofit hospices are under: the same Medicare rate, higher cost per day, a negative aggregate margin, and fewer nonprofit hospices every year as some close, merge or are acquired. If your board is weighing a sale, remember that a nonprofit’s assets remain committed to charity, and that many states require attorney general notice or approval for selling a charity’s assets; our guide to nonprofit hospitals covers the parallel debate, and nonprofit deficits the wider financial picture.

This is reference information, not legal or tax advice. Rules vary by state and change over time. For a decision that carries real consequences, check the current text at irs.gov or your state registry, and talk to a nonprofit attorney or CPA.