HHS sets its sights on $50b in cost savings: Medicare payments to nonhospice providers potentially under fire

HHS sets its sights on $50b in cost savings: Medicare payments to nonhospice providers potentially under fire 
JD Supra; by Taylor Henderson, Callan Stein, Rebecca Younker; 7/31/25 
In May 2025, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) published a review, titled " Potential Cost Savings HHS Programs – HHS Actions," which provided some insight into the OIG's direction to accomplish the Trump administration's stated goal of cutting federal spending. This review spans 35 reports, adding up to $50 billion in potential cost savings — including a reported $6.6 billion in potential savings by preventing Medicare payments for nonhospice items or services furnished to active hospice beneficiaries (nonhospice payments). When a beneficiary qualifies for and elects hospice benefits, the beneficiary signs a statement choosing hospice care over other Medicare-covered treatments for their terminal illness, and the hospice provider is paid a daily, per diem rate to provide these comprehensive services. With nonhospice payments accounting for a significant portion of HHS's potential savings, providers across the health care industry — including nursing and long-term care facilities, hospice and home health agencies, hospitals, individual providers, pharmacies, and medical equipment distributors — will need to be ready for the OIG's possible next steps.