CMS proposes an overall payment increase of approximately 2.4% ($420 million) for HHAs in CY 2027 compared to CY 2026. This reflects a 2.1% home health payment update ($370 million increase), and an estimated 0.3% decrease that reflects the proposed fixed dollar loss adjustment (FDL) ($50 million increase).
**Notably, CMS is also proposing a temporary payment adjustment of -3.0% to continue recouping retrospective overpayments stemming from behavior changes associated with the PDGM implementation in CYs 2020–2025. CMS is not proposing an additional permanent adjustment for CY 2027, as it believes behavior changes in preliminary CY 2025 claims data may not be directly attributable to PDGM.
CMS is proposing to recalibrate the case-mix weights — including the functional levels and comorbidity adjustment subgroups — and LUPA thresholds with CY 2025 data to more accurately pay for the types of patients HHAs are serving.
The proposed rule places a strong emphasis on administrative uniformity across Medicare quality spaces.
CMS is outlining formal revisions to the Home Health QRP, focusing on standardizing data windows to map explicitly to a traditional calendar year frame (January 1 through December 31). This alignment directly modifies the current annual processing cycles for both OASIS tracking and HHCAHPS reporting schedules. CMS is also seeking public comment on a potential Advanced Care Planning measure for future inclusion in the QRP.
CMS is not proposing any new HHVBP Model-specific policy changes in this rule, but included a summary of the Model with context relevant to potential future alignment between the HH QRP and the expanded HHVBP Model.
CMS is soliciting comments on whether they should consider using alternative data sources to construct an HHA specific wage index for potential use in future years. CMS seeks feedback to understand the potential advantages and limitations of using alternative data sources, such as BLS data and home health Medicare cost reports, as well as other methodologies that stakeholders believe could appropriately reflect the geographic variation in labor costs for HHAs. They also seek feedback on the unique considerations applicable to HHAs that should inform how CMS considers the potential use of alternative data sources.
CMS is seeking stronger tools to recover improper payments across all provider enrollment revocation categories. It also proposes new grounds for revoking or denying Medicare enrollment, such as targeting providers in geographic areas with an excessive, high-risk volume of suppliers or individuals with recent misdemeanor convictions related to sexual assault or financial misconduct. These integrity measures are estimated to save taxpayers $82 million annually.
The rule promotes community-based palliative care, clarifying that eligible patients with serious illnesses can receive and bill for these skilled services under existing Medicare home health benefits.
To provide patients and families with more timely information when making care choices, CMS proposes shortening the data submission deadline for home health agencies from 4.5 months to 45 days. This change would make publicly reported quality information available up to 3 months sooner.
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