CMS Proposed the CY 2027 Home Health Payment Rule. Here's What Changed.

CMS issued the calendar year 2027 Home Health Prospective Payment System proposed rule (CMS-1844-P) on July 1, 2026. It published in the Federal Register on July 6. Comments close August 31, 2026 at 5:00 p.m. ET.

This one is written for agency owners and administrators rather than for aides. If you run a Medicare-certified home health agency, three things in it matter.

1. Payments go up 2.4% in aggregate

CMS estimates a net increase of 2.4%, or about $420 million, compared to CY 2026. That figure is the result of several moving pieces pulling in opposite directions.

Agencies that fail to meet quality reporting requirements get a 0.1% update instead of 2.1%, because of the required 2 percentage point reduction. That penalty is worth more than it used to be.

2. The 3% temporary reduction continues

CMS is again proposing a 3.0% temporary reduction to the national standardized 30-day payment rate. This is the recoupment for what CMS calculates as overpayment between CY 2020 and CY 2025, the gap between assumed and actual behavioral response under PDGM. The agency projects it will collect roughly $500 million.

There is one genuinely notable piece of good news here. For the first time since CY 2022, CMS is not proposing an additional permanent behavioral adjustment. The permanent cuts that have compounded across recent rules pause this year. The temporary recoupment does not.

3. Provider enrollment authority expands significantly

This is the part getting the least coverage and deserving the most attention.

CMS proposes making all revocation grounds retroactive, which would let the agency recover payments made after a compliance failure rather than only from the revocation date forward. That is a meaningful change in financial exposure.

The rule would also let CMS deny or revoke enrollment based on:

• High fraud, waste, and abuse risk in geographically oversaturated areas
• Certain misdemeanor convictions within the past 10 years
• Violations of ownership or accreditation requirements

CMS estimates $82 million in annual savings from these provisions. Savings to CMS are costs to somebody, and here that somebody is providers.

What to do before August 31

Model the net effect on your own case mix. A 2.4% aggregate increase is a national estimate. Your actual change depends on your patient mix, your outlier exposure, and your LUPA rate. Agencies with heavy outlier volume will feel the fixed-dollar loss ratio change differently than agencies without.

Audit your quality reporting. The gap between a 2.1% update and a 0.1% update is entirely within your control, and it is a larger swing than most of the rate policy in this rule.

Review your enrollment and ownership documentation. Retroactive revocation changes the risk calculus on paperwork that has probably not been looked at in a while.

Comment if it affects you. The comment period is the only formal input point before the final rule. CMS does read them, and home health comment volume is historically low relative to how much the sector is affected.

Related

If you train aides, our agency training tools help trainees prepare for the competency exam with practice questions, mock exams, and a readiness score you can actually track.

Sources

• CMS: CY 2027 Home Health Prospective Payment System Proposed Rule Fact Sheet (CMS-1844-P)
• Federal Register: CY 2027 Home Health PPS Rate Update proposed rule
• Applied Policy: CMS Proposes Net 2.4% Increase in CY 2027 Home Health Payments
• American Hospital Association: CMS proposes updates to home health payments for CY 2027

This is a proposed rule, not a final one. Figures can change before the final rule is issued, typically in the fall. This article is general information, not legal, financial, or compliance advice.

Practice with real HHA exam questions

10 free questions daily. Full mock exams included with Full Access.

More Articles