CMS proposes the CY 2027 home health payment rule

What did CMS propose on July 6, 2026?

CMS published Calendar Year 2027 Home Health Prospective Payment System (HH PPS) Rate Update; Requirements for the HH Quality Reporting Program and the Expanded HH Value-Based Purchasing Model; Medicare Provider Enrollment, Durable Medical Equipment (DME), and DME, Prosthetics, Orthotics, and Supplies (DMEPOS) Policies. It is CMS-1844-P, RIN 0938-AV80, at 91 FR 41216.

The Federal Register gave comment until 5 p.m. EDT on August 31, 2026. Nothing in the proposal is in force until CMS publishes a final rule.

What would change in home health payment?

CMS says the temporary cut is part of recouping amounts it estimates were overpaid because actual behavior changes after PDGM differed from its assumptions. It puts the total temporary adjustment amount at $4.9 billion and expects the 3.0 percent reduction to collect about $500 million in CY 2027. The CY 2026 final rule already applied a 3.0 percent temporary reduction, so the cut would carry on at the same level.

What else is in the proposed rule?

• DMEPOS replacement orders: a new face-to-face encounter within 6 months before the order would not be required to replace an item under the same HCPCS code. An order is still required.
• Provider enrollment: more grounds for denying or revoking Medicare enrollment, and more reasons for a retroactive revocation date.
• DME benefit: changes to the Part B definition of DME so certain external infusion pumps and associated home infusion drugs are covered, implementing section 6222(a) of the Consolidated Appropriations Act, 2026.
• Quality reporting: revised data submission deadlines beginning with the CY 2027 HH QRP and a calendar year reporting period. No changes to the expanded HHVBP Model are proposed.

Who would this affect?

Home health agencies are paid under the HH PPS, so they feel the rates directly. Practices that certify home health, such as internal medicine, supply the orders and documentation behind each 30-day period. The DMEPOS and enrollment items reach any practice or supplier that orders equipment or bills Medicare. Medicaid home health follows state rules, covered on the Medicaid payer page.

What should billing teams do now?

1. Keep billing at the CY 2026 rates. The proposal changes no current payment.
2. Model your 30-day period revenue with the 2.1 percent update and the 3.0 percent temporary reduction, then compare with this year.
3. Review your LUPA volume, because thresholds would be recalculated.
4. Check that Medicare enrollment records are current, since revocation grounds would widen.
5. Watch the Federal Register for the final rule, and update your payment-check sheets when it appears.

What is still open?

CMS has to review comments and publish a final rule; any figure above can change. The Medicare payer guide and the denial management playbook cover day-to-day claim handling.

Our medical billing team keeps rate sheets current for home health and the practices that order it. Book a call to talk through your Medicare mix.