CMS Enrollment Freeze Signals a New Era of Scrutiny for Care at Home
On July 1, 2026, CMS released its Calendar Year (CY) 2027 Home Health Prospective Payment System proposed rule, outlining the payment and policy changes that will shape home health operations in the year ahead. The rule brings a rare bit of good news on payment, alongside a fresh round of program integrity measures and several proposals worth watching closely. Here's what care-at-home agencies need to know.
Payment Update: A Net Increase, With a Catch
CMS is proposing an aggregate payment increase for home health agencies in CY 2027, a departure from the cuts agencies have absorbed in recent years.
- Aggregate payments would increase by 2.4%, or $420 million, compared to CY 2026
- This includes a 2.1% payment update ($370 million) and a 0.3% increase tied to the Fixed Dollar Loss ratio ($50 million)
- No new permanent adjustment is proposed for the CY 2027 base payment rate
The catch: CMS is proposing a -3.0% temporary adjustment to the national, standardized payment rate, continuing its recoupment of retrospective overpayments tied to CYs 2020 through 2025. CMS frames the incremental approach as a way to avoid a larger reduction down the road, but the practical effect is that the net payment gain is smaller than the headline 2.4% suggests.
The National Alliance for Care at Home called the proposed increase a positive step but cautioned that the temporary adjustment still leaves rates misaligned with the actual cost of delivering care. The organization said it would continue pushing back on adjustments it views as based on a flawed methodology, while working with CMS on policy that protects patient access to care at home.
PDGM Recalibration and Case-Mix Updates
CMS is proposing to recalibrate PDGM case-mix weights, functional impairment levels, and comorbidity adjustment subgroups using CY 2025 claims data. LUPA thresholds and the Fixed Dollar Loss ratio would also be updated for CY 2027. These are routine annual updates, but they directly affect how individual episodes of care are reimbursed, making them worth a close look at the agency level.
Program Integrity: Fraud, Waste, and Abuse Provisions
CMS is proposing several enrollment and revocation changes aimed at reducing improper payments across Medicare, not just home health.
- Retroactive revocations: Currently, some revocations take effect 30 days after notice; others are retroactive. CMS proposes making all revocation grounds retroactive, which would allow the agency to recover payments made during a period of noncompliance.
- Change in majority ownership: Agencies that undergo certain ownership changes must already re-enroll as a new provider and complete a survey or accreditation. CMS proposes denying or revoking enrollment for agencies that skip this step.
- Expanded suspension/termination grounds: CMS could deny or revoke enrollment based on a provider's own suspended license or Medicaid exclusion. The proposal would extend that authority to cover an owner's or managing employee's suspensions or revocations as well.
For agencies navigating ownership transitions, acquisitions, or leadership changes, these proposals raise the stakes on getting enrollment paperwork right the first time.
Requests for Information Worth Watching
CMS is soliciting public comment on two items that don't carry immediate policy weight but signal where future rulemaking may head:
- A home health-specific wage index built from an alternate data source, such as the Bureau of Labor Statistics
- Expanding access to community-based palliative care through the Medicare home health benefit, including a potential future Advance Care Planning quality measure
Agencies with a stake in either issue have an opportunity to weigh in during the comment period.
Quality Reporting and Value-Based Purchasing Alignment
CMS is proposing changes to better align the Home Health Quality Reporting Program (HH QRP) with the expanded Home Health Value-Based Purchasing (HHVBP) Model, including revised assessment data submission deadlines and a shift to calendar-year OASIS and HHCAHPS reporting timeframes. No new HHVBP-specific policy changes are proposed this cycle.
DME Benefit Expansion for Home Infusion
Effective April 1, 2027, CMS is proposing to implement a provision of the Consolidated Appropriations Act, 2026, expanding the durable medical equipment benefit to cover certain external infusion pumps and the home infusion drugs administered through them. Coverage would apply when a qualified home infusion therapy supplier administers or supervises the drug in the patient's home and the drug is infused at least once a month.
CY 2027 Proposed Home Health Rule: What This Means for Agencies
The CY 2027 proposed rule reflects a familiar pattern: modest payment relief paired with continued recoupment, alongside a steady expansion of program integrity oversight. Agencies should use the comment period to weigh in on the provisions that matter most to their operations, particularly the wage index RFI and the ownership-related enrollment changes, while beginning to prepare for the recalibrated case-mix weights and quality reporting timeline shifts.
CMS is accepting comments on the proposed rule for 60 days following its publication in the Federal Register. Learn more about the proposed rule:
Stay Ahead of CMS Changes with Expert Support from Maxwell TEC
Navigating proposed rule changes takes time your team may not have. Maxwell TEC is committed to supporting organizations navigating these critical changes. Our team of expert consultants help home health agencies translate CMS policy into operational strategy, so you can stay compliant and focused on patient care.
Connect with us to talk through what this rule means for your agency and learn how our team of experts can help support your success through this transition. Book time with our team now, or reach out to sales@maxwelltec.com to get started today.
