PBM Reform Is Now Law — But Hospice Still Needs a Seat at the Table

In early 2026, federal legislation enacted historic pharmacy benefit manager (PBM) reform, introducing new transparency, accountability, and reporting requirements across Medicare, Medicaid, and commercial plans. Most discussion has centered on Part D and rebates, while hospice pharmacy remains largely overlooked. Hospice medications are covered under the Medicare Part A per-diem, not Part D, so hospice isn’t directly regulated. However, shifts toward fee-based PBM compensation, rebate pass-through, and greater transparency are already influencing drug acquisition and PBM contracting in the hospice space. At SimsRx, we operate at the intersection of hospice care, pharmacy, and cost stewardship. Hospice may not be the target of this law, but the changing PBM landscape still matters — and hospice leaders should be paying attention.

2/4/20262 min read

Much has been written about the federal PBM reform legislation recently signed into law and its impact on Medicare Part D and Medicaid. Transparency, rebate pass-through, and the elimination of spread pricing have dominated the discussion.

But one important sector has been largely absent from the conversation: hospice.

A Quick Clarification

Hospice operates under a fundamentally different payment structure than traditional prescription benefits. Once a patient elects hospice, medications related to the terminal diagnosis are not paid under Medicare Part D. Instead, they are the responsibility of the hospice and are covered within the Medicare Part A per-diem.

That distinction matters — because while hospice is not directly regulated by the new PBM reform law, it is not insulated from its effects.

Indirect Impact on Hospice PBMs and Pharmacies

PBM reform shifts incentives across the entire drug supply chain. As PBMs move away from rebate-driven and spread-based revenue models toward flat administrative fees, pressure will increase elsewhere in the system — including markets that fall outside direct federal regulation.

For hospice PBMs and pharmacies, this could mean:

Greater scrutiny of opaque pricing structures
Increased demand for predictable, pass-through, and auditable pricing models
Heightened importance of clinical stewardship over rebate optimization

At the same time, broader efforts to curb list-price inflation and improve transparency may help moderate long-term drug acquisition costs — an important consideration for hospices operating within fixed per-diem reimbursement.

Why This Matters

Hospice lives at the intersection of compassionate care and tight financial margins. Drug costs are a controllable but unavoidable expense, and small shifts in pricing dynamics can have an outsized impact on sustainability.

PBM reform may not change hospice reimbursement tomorrow — but it reshapes the environment in which hospice pharmacies and PBMs operate. Organizations that already emphasize transparency, predictable pricing, and clinically driven formularies may find themselves better aligned with where policy and payer expectations are heading.

The Bottom Line

PBM reform was not written with hospice in mind — but hospice will still feel it.

As the industry adjusts to a post-reform PBM landscape, hospice leaders, pharmacies, and PBM partners should be paying close attention. The models that succeed going forward will be the ones built on clarity, accountability, and patient-centered care — values hospice has long championed. While PBM reform does not directly mandate changes in hospice, leaders should align with a hospice PBM that prioritizes fair pricing, transparency, and predictable contracting to support both cost management and patient care.