On July 1, 2026, CMS issued the calendar year (CY) 2027 Home Health (HH) Prospective Payment System (PPS) proposed rule. Included in the proposed rule is the proposed payment aggregate increase of 2.4%, or $420 million. This increase comprises the statutory annual payment rate update of 2.1%, combined with a 0.3% increase for the proposed update to the fixed-dollar loss (FDL) ratio for outlier payments. For the first time since CY 2022, CMS is not proposing an additional permanent adjustment for CY 2027. It is, however, proposing the same temporary decrease of 3%, as CY 2026, related to clawbacks for CMS’ alleged overpayment from CY 2020 to CY 2025 for the difference between assumed versus actual behavioral adjustments. The 3% decrease from CY 2026 will be removed, and then subsequently the new 3% for CY 2027 will be applied.
As such, the proposed CY 2027 national, standardized 30-day period payment is proposed at $2,092.27, and the proposed CY 2027 per-visit payment amounts are as follows:
| HH Discipline | Per-Visit Payment |
|---|---|
| Home Health Aide | $81.78 |
| Medical Social Services | $289.51 |
| Occupational Therapy | $198.77 |
| Physical Therapy | $197.42 |
| Skilled Nursing | $180.62 |
| Speech-Language Pathology | $214.60 |
Source: federalregister.gov/d/2026-13602
Agencies that do not submit the required quality data will see a 2% reduction in their rates.
Expansion of CMS Authority
In connection with CMS efforts to battle fraud, waste, and abuse, the proposed rule includes changes to the provider enrollment process. All providers, not just home health, should take note of this portion of the proposed rule since it affects all providers of Medicare-reimbursed services and represents a significant expansion of CMS authority. Key points include:
- Medicare enrollment revocations to be retroactively based on the date the provider’s noncompliance began, instead of being prospectively.
- Expanding and adding reasons by which revocations or denials are based.
- Currently, certain providers are required to reenroll in Medicare as a new provider and go through survey/accreditation in the event of certain changes in majority ownership. With the proposed rule, CMS will deny or revoke enrollment if this requirement is not met.
- Currently, CMS can deny or revoke enrollment for certain reasons from the specific provider. With the proposed rule, CMS will expand these denials/revocations to the provider’s owners, managing employees, or managing organizations.
In the proposed rule, changes in timeframes on the HH Quality Reporting Program (QRP) have been proposed as well as a summary of potential initiatives to better align the HH QRP and the expanded HH Value-Based Purchasing Model; however, no model-specific policy changes are currently proposed.
Other changes included in the proposed rule are the following:
- Expanding the durable medical equipment (DME) benefit to include infusion pumps and drugs, effective April 2027
- Clarifying the application of DME, prosthetics, orthotics, and supplies (DMEPOS) so that the face-to-face encounter is not necessary when claiming replacement items
- Adding a new “country of origin” field in the DMEPOS Competitive Bidding Program (CBP) for lead items that are bid by the contract suppliers
Finally, the proposed rule introduces the interest from CMS in palliative care services through existing Medicare benefits, including Medicare home health, as well as a request for information on a home health-specific wage index.
Comments on this proposed rule are due by August 31, 2026, with the expected release of the final rule later this fall.
At Forvis Mazars, we help organizations like yours navigate the evolving healthcare landscape. If you have any questions or need assistance, please reach out to a Home Care & Hospice advisor at Forvis Mazars.