Key Takeaways from the CMS CY 2026 Home Health Final Rule

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On November 28, 2025, CMS released the CY 2026 Home Health Prospective Payment System Final Rule (HH PPS)¹—one of the most highly anticipated and consequential updates for care-at-home providers of the year.

While CMS made notable changes in response to industry concerns, the rule still results in a net payment reduction and ushers in several operational, clinical, and compliance impacts for agencies nationwide. 

Below, we break down the major changes and what they mean for home health organizations navigating an already strained landscape. 

1. Payment Rates Drop by 1.3% in 2026

CMS finalized a 1.3% overall decrease in home health payments for 2026. This reflects: 

• +2.4% payment update 

• -0.9% permanent adjustment 

• -2.7% temporary adjustment 

• -0.1% Fixed Dollar Loss (FDL) ratio update 

• • The FDL ratio is part of the outlier payment methodology under the HH PPS. It determines how much a provider’s estimated cost must exceed the payment threshold before outlier payments (add-on payments for unusually costly episodes of care) are triggered. 

Net result: an estimated $220 million decrease in aggregate payments compared to 2025. 

While CMS did scale back cuts from the original proposed rule of 6.4%, industry leaders, including the National Alliance for Care at Home², warn that continued reductions may further limit patient access and contribute to ongoing agency closures, especially in rural and underserved communities.

2. Final Permanent Adjustment Set at –1.023%

CMS finalized the last of the PDGM-driven permanent adjustments required by law, applying a –1.023% permanent cut in 2026. 

This adjustment reflects CMS’s determination of differences between assumed and actual behavioral changes from 2020-2022. CMS acknowledged that post-2022 behavior shifts may be influenced by factors beyond PDGM, such as: 

• OASIS-E implementation 

• Expansion of Home Health Value-Based Purchasing (HHVBP) 

• Increased MA penetration 

This recognition led to a substantially lower final cut than original proposed -4.059%. Still, these reduced cuts exacerbate already compounding financial pressures on home health providers.

3. Temporary Adjustment Set at –3.0%, With More Years to Come

CMS finalized a –3% temporary adjustment for 2026 to recoup what it considers overpayments from 2020–2022. The temporary adjustment amount now totals $4.76 billion. 

CMS will continue analyzing claims through 2026, meaning temporary adjustments could persist for multiple years unless Congress intervenes. 

4. Annual Recalibration of PDGM Case-Mix Weights & LUPA Thresholds

Using CY 2024 data, CMS will update: 

• PDGM case-mix weights 

• Functional impairment levels 

• Comorbidity subgroups 

• LUPA thresholds 

These refinements reflect ongoing shifts in patient acuity, utilization, and coding patterns. Agencies should expect noticeable impacts on revenue cycle forecasting and visit utilization strategies. 

5. Broader Flexibility for Face-to-Face Encounters

CMS updated its face-to-face encounter regulation to fully align with CARES Act provisions. Under the final rule, physicians, NPs, CNSs, and PAs may perform the face-to-face encounter: 

• Regardless of whether they are the certifying clinician 

• Regardless of whether they cared for the patient in the acute or post-acute setting 

This clarification removes previous ambiguities and may help streamline face-to-face encounter compliance. 

6. Major Changes to the Home Health Quality Reporting Program (HHQRP)

The 2026 rule finalizes several QRP updates: 

• Removal of the COVID-19 Vaccine: Up-to-Date measure 

• Removal of four standardized patient assessment items (one living situation item, two food items, and one utilities item) 

• Expanded reconsideration opportunities for noncompliance, including limited extensions for agencies affected by extraordinary circumstances such as cyber-attacks, hurricanes, tornadoes, or earthquakes 

• Revised HHCAHPS survey beginning with the April 2026 sample month 

• Regulatory updates to support all-payer OASIS submission 

CMS is also providing a summary of feedback on future directions, including digital quality measurement; FHIR standards; and future HHQRP measure concepts like interoperability, cognitive function metrics, nutrition, and patient well-being. 

7. HHVBP: New Measures Added, Survey Measures Removed

Beginning in April 2026, HHVBP measure updates include: 

Removed (due to HHCAHPS redesign): 

• Care of Patients 

• Communication Between Providers and Patients 

• Specific Care Issues 

Added: 

• Three OASIS-based measures related to bathing and dressing 

• One claims-based measure: Medicare Spending per Beneficiary—PAC setting 

CMS is also implementing updated measure weights and adding a new removal factor for measures that are no longer feasible to implement. 

8. Significant Provider Enrollment and Program Integrity Updates

CMS finalized several actions designed to curb fraud, waste, and abuse: 

• Expanded retroactive revocation authority 

• Deactivation for physicians/practitioners who do not order or certify services for 12 months 

• Clarification of revocation authority when beneficiaries attest that services were not furnished 

These changes increase compliance risk and reinforce the need for rigorous enrollment monitoring.

9. Overhaul of DMEPOS Accreditation & Oversight

Home health agencies that provide DMEPOS should anticipate the most sweeping oversight updates since 2006: 

• Annual (not triennial) resurvey and reaccreditation 

• Increased data reporting requirements for AOs 

• Greater CMS oversight and authority to intervene when AOs underperform 

CMS expects these provisions to strengthen program integrity, ensuring greater protection for Medicare beneficiaries and taxpayers from unqualified DMEPOS suppliers. 

10. Updates to Prior Authorization & Competitive Bidding

Additional updates include: 

• A new exemption pathway for DMEPOS suppliers consistently achieving ≥90% approval rates 

• Future competitive bidding changes aimed at lowering beneficiary copays 

• Shift to monthly rental payments for CGMs and insulin pumps once included in the bidding program—ensuring access to up-to-date, fully supported technology 

The Bottom Line: Progress, but Continued Pressure on Patient Access 

The 2026 final rule reflects CMS’s responsiveness to industry feedback, particularly in scaling back the permanent adjustment and acknowledging limitations in its methodology. The approximately $915 million swing from the proposed rule to final rule represents meaningful progress driven by strong home health advocacy efforts. 

Yet the overall impact remains concerning for providers. As the National Alliance for Care at Home highlights in their response to the final rule: 

• Payment cuts, though reduced, are still cuts that reduce patient access. 

• Continued temporary adjustments create multi-year financial strain on home health organizations. 

• Access challenges, workforce shortages, and agency closures remain ongoing risks for the industry at large. 

For patients, this translates to bigger costs, longer wait times, higher rates of readmission and ED use, and fewer opportunities to receive clinically appropriate care at home. 

Safeguarding the future of home health will require continued advocacy and legislative action to modernize payment methodology, protect patient access, and stabilize the care-at-home ecosystem. 

How Maxwell TEC Can Help Home Health Navigate 2026 

Maxwell TEC supports home health organizations through these shifting regulations, tighter margins, and increased expectations for data-driven performance. Our proven technology and strategic solutions help agencies:

• Strengthen compliance and documentation: Tools and processes aligned with updated PDGM, LUPA thresholds, face-to-face rules, and QRP requirements. 

• Boost quality scores and prepare for HHVBP changes: Clinical documentation support, analytics, and workflows that help elevate key OASIS and claims-based measures. 

• Enhance financial stability amid ongoing reimbursement cuts: Operational insights that identify gaps, reduce denials, minimize LUPAs, and optimize visit utilization. 

• Maintain efficiency without adding workforce burden: Tech-enabled communication, workflow automation, and intelligent data tools designed specifically for care-at-home teams. 

As the regulatory landscape becomes more complex, Maxwell TEC helps home health agencies stay compliant, competitive, and patient-centered—so they can continue delivering exceptional care at home. 

Resources

1. “Calendar Year (CY) 2026 Home Health Prospective Payment System Final Rule (CMS-1828-F).” Centers for Medicare & Medicaid Services, November 28, 2025. CMS.gov | Centers for Medicare & Medicaid Services. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-home-health-prospective-payment-system-final-rule-cms-1828-f.  
   2. “National Alliance for Care at Home: CMS Modifies Final Payment Rule Based on Stakeholder Feedback, but 1.3% Cut Still Undermines Access.” National Alliance for Care at Home, November 28, 2025. National Alliance for Care at Home. https://allianceforcareathome.org/national-alliance-for-care-at-home-cms-modifies-final-payment-rule-based-on-stakeholder-feedback-but-1-3-cut-still-undermines-access. 

This blog was originally published as "Key Takeaways from the CMS CY 2025 Home Health Final Rule" on 11/5/2024, for Maxwell Healthcare Associates. The Maxwell TEC editorial team has since updated this article to reflect the 2026 final rule.