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by Kristin Rowan, Editor
2027 Home Health Proposed Rule
The Alliance Responds
On July 1, 2026, CMS released the 2027 Home Health Prospective Payment System proposed rule. The proposed rule includes updates to base pay, quality reporting system, value-based purchasing model, medicare provider enrollment, and DME policies. CMS is also considering ways to include palliative care. The comment period ends August 31, 2026.
The National Alliance for Care at Home issued a press release following the proposed rule publication.
“While the proposed rate update results in increased payments relative to last year – a reflection of our continued advocacy and a much-needed reprieve for providers under the stress of increasing costs – the Alliance remains focused on working to stop unwarranted temporary adjustments that are based on a flawed methodology with underlying data integrity issues. We will continue to partner with CMS on policies that strengthen the Medicare home health benefit. Ultimately, federal policy must preserve patient access to care at home, which remains the preferred choice of care for millions of families.”
Permanent and Temporary Rate Adjustments
CMS uses data from 2020 through 2025, actual and expected behavior changes resulting from the implementation of PDGM, and calculated overpayments from prior years to determine rate adjustments.
- The actual CY 2025 base rate was $2,057.35 and the recalculated rate is $1,953.60; a difference of 5.043%
- Prior permanent adjustments of -1.975% in 2025 and -1.023% in 2026 are factored in, but not directly subtracted
- The 2024 budget-neutral rate multiplied by case-mix weights, wage index, and payment update factors yield the 2025 budget-neutral rate of $2,036.29, a difference of 1.024%
- Estimated retroactive overpayments from CY 2020 through CY 2025 of $4,9 billion to be partially collected with a -3.0% temporary adjustment to the base pay rate.
- Recalibrating the case-mix weight using reporting from CY 2025, CMS calculates a budget neutrality factor for CY 2027 of +1.0045
- Applying the market basket (wages across the U.S.), CMS proposes a 3.0% increase to the home health market basket, offset by a -1.0% productivity adjustment, yielding a 2.1% increase.
With these calculations, CMS proposes a -3.0% temporary adjustment to be applied for CY 2027.
The Alliance acknowledges and appreciates the headway made with CMS in understanding the true cost of delivering home health care and the value it provides to the millions of Americans who depend on it. However, the Alliance emphasizes that Medicare payment rates – with the 3% temporary adjustment applied – still do not align with the actual cost of providing comprehensive, high-quality care. In a recent letter to CMS, the Alliance encouraged CMS to eliminate all permanent and temporary adjustments due to problems in the data and analyses used to calculate payment rates.
Alignment of HH QRP and HHVBP
CMS is considering changes that would better align measure sets, reporting perioeds and assessment process between HH QRP and HHVBP. The considered changes are:
- Increasing alignment in expanded HHVBP Model and HH QRP Quality of Patient Care (QoPC) Star Ratings measure sets.
- Aligning HH QRP and expanded HHVBP Model measure reporting periods.
- Modifying HH QRP APU and expanded HHVBP Model annual payment reporting periods.
- Altering expanded HHVBP Model Interim Performance and HH QRP QoPC Star Rating Reports.
- Aligning timeframe of appeals/suppression review processes for the expanded HHVBP Model and HH QRP.
- Updating scoring methodology to incorporate HH QRP APU penalties in expanded HHVBP Model payment adjustments and factoring HH QRP Quality Assessments Only (QAO) values into QoPC Star Ratings scoring.
CMS is NOT asking for comments at this time. The Technical Expert Panel meeting in 2025 discussed this alignment.
Read the TEP Summary Report.
LUPA Updates
CMS proposes updates to the functional points table and the table of functional impairment levels by clinical group. The proposed updates are:
Requests for Comment
CMS is soliciting comments on the proposal of applying a -3.0% temporary rate adjustment instead of applying a permanent adjustment.
There are proposed changes to the criteria for selecting and prioritizing HH QRP measures, identifying measurement gaps, and measures for filling those gaps. CMS is requesting input on the measure concepts as the relate to advanced care planning.
For CY 2027, CMS is using the hospital wage index as the basis for its calculations for the home health wage index. While they believe this is the best method, they are looking for information on alternative data sources such as occupation-level wage data or other publicly available wage data. They are exploring whether such data might better reflect geographic variations in labor costs for HHAs. CMS is concurrently exploring additional wage data for hospices, SNFs, and inpatient rehab facilities.
CMS is inviting public comments on the CY 2027 proposed case-mix weights and case-mix weights budget neutrality factor.
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Kristin Rowan is the owner and Editor-in-chief of The Rowan Report, the industry’s most trusted source for care at home news. She is also a sought-after speaker on Artificial Intelligence, Technology Adoption and Lone Worker Safety. She is available to speak at state and national conferences as well as software user-group meetings.
Kristin also runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in content creation, social media management, and event marketing. She works with care at home software providers to create dynamic content that increases conversions for direct e-mail, social media, and websites. Connect with Kristin directly at kristin@girardmarketinggroup.com or www.girardmarketinggroup.com
©2026 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com
