Medicare Tweaks Home Health Payments and Rules for 2027
Published Date: 7/6/2026
Proposed Rule
Summary
Starting in 2027, Medicare is updating how it pays for home health care, including new rules to better match patient needs and improve quality. Home health agencies, equipment suppliers, and providers will see changes in payment rates, reporting, and enrollment rules, with some new policies on medical equipment and services. These updates aim to make care fairer and smoother, with some deadlines and money changes coming next year.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
CY 2027 Home Health Payment Recalibration
This rule proposes updates to Medicare home health payments for Calendar Year 2027, including recalibrating Patient-Driven Groupings Model (PDGM) case-mix weights and updating low-utilization payment adjustment (LUPA) thresholds, functional impairment levels, and comorbidity subgroups for 30-day periods of care. CMS also proposes a temporary behavior adjustment to the base payment rate and a fixed-dollar loss (FDL) ratio so outlier payments are projected not to exceed 2.5 percent of total aggregate payments.
HH QRP Reporting Window Changes
Beginning with the CY 2027 Home Health Quality Reporting Program (HH QRP), CMS proposes revised data submission deadlines and to change the OASIS and HHCAHPS Annual Payment Update reporting timeframe to a calendar year of data (January 1 through December 31). Under existing law cited in the rule, if an HHA does not submit required quality data, the home health market basket percentage increase is reduced by 2 percentage points.
Stricter Provider Enrollment Rules
CMS proposes adding grounds to deny or revoke Medicare enrollment and expanding reasons CMS can apply a retroactive effective date for revocations. CMS also proposes expanding the ability to bar reapplication (currently up to 10 years for false or misleading enrollment submissions) to permit reapplication bars regardless of the denial reason.
DME Benefit Expanded to Infusion Pumps and Drugs
The rule proposes to revise the Medicare Part B definition of durable medical equipment (DME) at 42 CFR 414.202 to implement section 6222(a) of the Consolidated Appropriations Act, 2026, so that certain external infusion pumps and associated home infusion drugs or supplies are treated as meeting the "appropriate for use in the home" requirement when specified statutory criteria are satisfied.
Clarify DME Replacement Face-to-Face Rule
CMS proposes that a new face-to-face encounter is not required to support Medicare payment for replacement of a DMEPOS item when the replacement is for an item under the same HCPCS code and the original encounter and documentation exist; specifically, an additional face-to-face encounter within the 6 months preceding an order for replacement would not be required under 42 CFR 410.38. Replacement that involves a different item (for example, due to a change in medical condition) is not covered by this clarification.
Country-of-Origin Data for DME Competitive Bids
CMS proposes to require DMEPOS Competitive Bidding Program contract suppliers to report the country of origin for the lead items furnished during a contract's period of performance, and to populate that country-of-origin information in the Medicare Supplier Directory during the contract period.
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Key Dates
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