Proposed Home Health Payment Rule CY 2026

Are You Ready for All-Payer OASIS?

On June 30, 2025, the Centers for Medicare & Medicaid Services (CMS) released its proposed rule for the Calendar Year (CY) 2026 Home Health Prospective Payment System (HH PPS), introducing sweeping changes that could impact the future of home health care delivery and financing. The rule projects a 6.4% net reduction in Medicare payments to home health agencies (HHAs) and includes policy updates on quality reporting, provider integrity, and DMEPOS oversight.

Key Financial Changes

CMS estimates a net $1.135 billion decrease in Medicare payments to HHAs in 2026, driven by:

• 2.4% Base Rate Increase: A routine market basket update reflecting inflation and labor cost changes.
• −4.059% Permanent Behavioral Adjustment: Correcting discrepancies between assumed and actual provider behavior under the Patient-Driven Groupings Model (PDGM).
• −5.0% Temporary Behavioral Adjustment: Recouping ~$5.3 billion in overpayments from 2020–2024.
• −0.5% Outlier Payment Impact: Due to proposed changes in thresholds for high-cost patients.

As a result of the most substantial home health payment reduction in recent years, the permanent and temporary behavioral adjustments far outweigh the modest increase in base rates included in the proposed rule.

PDGM Refinements and Case-Mix Recalibration  

CMS continues to fine-tune the PDGM , revising:

• Case-mix weights
• Low Utilization Payment Adjustment (LUPA) thresholds
• Functional impairment levels
• Comorbidity subgroups

These updates are based on 2024 utilization data, aiming to ensure payment accuracy and better reflect the complexity of patient care.

Expanded Access of Face-to-Face Encounters

The rule proposes expanding eligibility for face-to-face encounters to include:

• Nurse Practitioners (NPs)
• Clinical Nurse Specialists (CNSs)
• Physician Assistants (PAs)
• Physicians (regardless of certification role)

This change is consistent with the CARES Act and could help lower access barriers for patients starting home health care.

Quality Reporting Program (HH QRP) Updates  

CMS proposes several notable changes to the Home Health Quality Reporting Program:

• Removal of the COVID-19 Vaccine measure and four OASIS items (e.g., living situation, utilities access).
• Revised reconsideration procedures for non-compliance.
• A redesigned HHCAHPS patient survey launching April 2026.
• Solicitation of feedback on future measures tied to well-being, nutrition, cognitive function, and digital interoperability (e.g., FHIR).

Together, these updates signal CMS’s intention to modernize quality measurement by focusing on clinical relevance, operational efficiency, and patient-centered care.

Home Health Value-Based Purchasing (HHVBP) Enhancements

Under HHVBP, CMS proposes:

• New performance measures, including:
  • Three OASIS-based measures
  • One total per capita Medicare spending measure
• Realignment of measure weighting
• Official process for removing measures based on feasibility
• Exploration of adding a "Falls with Major Injury" outcome metric

These changes modernize HHVBP to better align incentives with real-world outcomes, driving higher-value care across the industry.

Program Integrity and Provider Oversight

To strengthen fraud prevention and ensure compliance, CMS aims to:

• Expand retroactive revocation authority for providers violating rules.
• Add new grounds for enrollment deactivation, including lack of recent service delivery or attestations of inactivity.
• Apply tighter scrutiny to newly enrolled providers and contractors.

Altogether, these efforts reinforce CMS’s commitment to protecting beneficiaries and preserving the credibility of the Medicare program through proactive oversight.

DMEPOS and Competitive Bidding Reforms

Key proposals in the durable medical equipment (DMEPOS) space include:

• Requiring annual reaccreditation (versus the current three-year cycle).
• New data reporting standards for accrediting organizations.
• Allowing high-performing suppliers (90%+ approval rate) to bypass prior authorization requirements.
• Reclassifying continuous glucose monitors and insulin pumps for faster competitive bidding updates.

These updates reflect a more agile and quality-driven approach to DMEPOS oversight, promoting both patient access and supply chain accountability.

Requests for Public Input

CMS is actively seeking stakeholder feedback on:

• Incorporating patient well-being, social drivers, nutrition, and cognitive health into future quality measures.
• Strategies for reducing administrative burden and streamlining Medicare regulations.
• Digital measure of interoperability and the use of FHIR standards.

CMS is giving stakeholders an opportunity to use their voice and evaluate this newly proposed rule. We invite collaboration with providers planning to submit comments.

What’s Next: CMS Invites Public Feedback

The CY 2026 proposed rule signals a major recalibration in how Medicare reimburses home health providers, with a strong emphasis on financial accountability, clinical accuracy, and modernized quality measurement. While the payment reductions will challenge many agencies, CMS positions these changes as necessary to correct past overpayments and ensure long-term program integrity.

CMS is currently seeking public input through a Request for Information focused on:

• Measures that assess overall health, happiness, and life satisfaction, including emotional well-being, social connections, and more.
• Tools and measures promoting healthy eating habits, exercise, nutrition, or physical activity.
• Streamlining regulations and reducing burdens on those participating in the Medicare program.

Providers, industry groups, and stakeholders are encouraged to review and respond to ensure the final rule reflects the needs and realities of today’s home health environment:

• Proposed Rule Fact Sheet

Stay Ahead of CMS Changes with Expert Support from Maxwell TEC 

CMS’s newly proposed updates are impacting the Home Health landscape. Maxwell TEC is committed to continuously supporting organizations navigating these critical changes with confidence. Connect with us to learn how our team of experts can help support your success through this transition. We would also love to collaborate with providers that are planning to submit comments. Together we are stronger.