Medicare Revamps 2026 Home Care Payments and Rules
Published Date: 12/2/2025
Rule
Summary
Starting in 2026, Medicare is updating how it pays for home health care and durable medical equipment, making sure payments match patient needs better. Home health providers will see new rules for quality reporting and value-based programs, while suppliers must meet updated accreditation and enrollment standards. These changes affect patients, providers, and suppliers, with payment updates and new deadlines kicking in early next year.
Analyzed Economic Effects
12 provisions identified: 4 benefits, 2 costs, 6 mixed.
DMEPOS Competitive Bidding SPA & Annual Update
CMS changed how single payment amounts (SPAs) are calculated for DMEPOS competitive bidding: the SPA for the lead item will use the 75th percentile of winning bids (by certain bidders) and CMS will apply an annual update factor to SPAs starting with year two of multi-year contracts. CMS also finalized area-specific ratio calculations for non-lead items in many competitive bidding areas (CBAs).
CY 2026 Home Health Payment Changes
For calendar year (CY) 2026, Medicare finalizes a home health payment update percentage of 2.4 percent and also finalized a -1.023 percent permanent adjustment and a -3.0 percent temporary adjustment to the base payment rate. CMS also finalized the fixed-dollar loss (FDL) ratio so that outlier payments are projected not to exceed 2.5 percent of aggregate payments for CY 2026.
PDGM Case-Mix & LUPA Recalibration
CMS finalized recalibrated Patient-Driven Groupings Model (PDGM) case-mix weights and updated low-utilization payment adjustment (LUPA) thresholds, functional impairment levels, and comorbidity subgroups for CY 2026. These recalibrations change how 30-day periods of care are classified and how payments are adjusted under PDGM for CY 2026.
HHVBP Measure Set and Weights Updated
CMS finalized changes to the expanded Home Health Value-Based Purchasing (HHVBP) Model: it adds a new measure removal factor, removes three HHCAHPS survey-based measures, and adds four new measures including the claims-based Medicare Spending Per Beneficiary Post-Acute Care (MSPB-PAC) and three OASIS-based function measures for CY 2026 measure sets and weights.
Medicare Provider Enrollment Tightened
CMS finalized changes to Medicare provider enrollment rules that modify grounds for denying, revoking, or deactivating Medicare enrollment, expand reasons CMS can apply retroactive effective dates or stays of enrollment, and shorten the reporting window for adverse legal actions from 90 days to 30 days.
Annual DMEPOS Reaccreditation Requirement
CMS finalized that DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies) suppliers must be surveyed and reaccredited every year instead of every 3 years, along with other changes to strengthen oversight of accrediting organizations.
Monthly Rental Payment for Diabetes Devices
CMS finalized that payment under the DMEPOS competitive bidding program for certain continuous glucose monitors (CGMs) and insulin infusion pumps and all necessary supplies and accessories will be made on a bundled monthly rental basis. CMS also finalized that beneficiaries would no longer need to wait 5 years to replace equipment and that non-CBP furnished items would be paid on the same bundled monthly rental amounts.
Remote Item Delivery (RID) CBP Created
CMS created a Remote Item Delivery (RID) Competitive Bidding Program (CBP) option that could be nationwide or regional and would require contract suppliers to furnish certain items primarily by mail order to Medicare beneficiaries regardless of where they live in the competitive bidding area (CBA). RID items are those typically furnished from supplier locations hundreds of miles on average from the beneficiary residence.
HH QRP Measure and Reporting Changes
Beginning with the CY 2026 Home Health Quality Reporting Program (HH QRP), CMS removes the COVID-19 Vaccine: Percent of Patients Who Are Up to Date measure and four assessment items, finalizes a revised HHCAHPS survey starting with the April 2026 sample month, and allows providers to request reconsideration of initial noncompliance determinations (with limited extensions for extraordinary circumstances).
DMEPOS Prior Authorization Exemptions Finalized
CMS finalized regulations on granting and withdrawing exemptions from mandatory prior authorization requirements for certain DMEPOS suppliers, establishing a formal exemption process as part of the prior authorization program.
Reduced Financial Docs for CBP Bidders
For the DMEPOS competitive bidding program, CMS will no longer require submission of tax return extracts, income statements, balance sheets, or statements of cash flows during the bid window; bidders must still submit a credit report with a numerical score and/or rating and attest to meeting the small supplier threshold.
Tribal Exception to CBP Participation
CMS added a Tribal exception allowing Indian Health Service (IHS) and tribally operated facilities and suppliers to furnish competitively bid DMEPOS items as noncontract suppliers to American Indian/Alaska Native (AI/AN) Medicare beneficiaries who reside in a competitive bidding area (CBA) during a round of the DMEPOS CBP.
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