Medicare's Home-Health Payment Machinery Gets Its Annual Tune-Up
Published Date: 11/9/2026
Rule
Summary
Starting in 2027, Medicare is updating how it pays home health agencies, including new payment rates and rules to make care better and fairer. Home health providers, equipment suppliers, and Medicare enrollees will see changes in payment methods, quality reporting, and equipment rules, with some new deadlines and expanded benefits. These updates aim to improve care quality while keeping payments clear and fair.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
CY 2027 Home Health Payment Rate Changes
Starting January 1, 2027, Medicare finalizes updates to the CY 2027 home health payment system, including recalibrated PDGM case-mix weights, updated low-utilization payment adjustment (LUPA) thresholds, new functional impairment levels and comorbidity subgroups, updates to the home health wage index, updated national standardized 30‑day period payment rates and national per-visit payment amounts, and a fixed-dollar loss (FDL) ratio set so outlier payments are projected not to exceed 2.5 percent of aggregate payments.
Stricter Provider Enrollment and Reapplication Bar
CMS finalized additions to the grounds for denying or revoking a provider's or supplier's Medicare enrollment and expanded the reasons CMS can apply a retroactive effective date for revocations. CMS is also expanding the ability to impose a reapplication bar (previously up to 10 years when denial was for false or misleading information) so that a reapplication bar may be imposed regardless of the denial reason.
New Quality Reporting Deadlines for HHAs
Beginning with the CY 2027 Home Health Quality Reporting Program (HH QRP), CMS finalizes revised HH QRP data submission deadlines and requires the OASIS and HHCAHPS Annual Payment Update (APU) reporting timeframe to use a calendar year of data (January 1 through December 31). Under existing law cited in the rule, if an HHA does not submit quality data, the home health market basket percentage increase is reduced by 2 percentage points.
Part B DME Benefit Expanded to Infusion Pumps/Drugs
CMS finalized a change to the Medicare Part B definition of durable medical equipment 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 other associated supplies are treated as meeting the “appropriate for use in the home” requirement when specified statutory criteria are satisfied. This regulatory change is part of the DME benefit expansion finalized in this rule (effective January 4, 2026 for most DME provisions).
No New Face-to-Face Visit for DME Replacements
CMS finalized that an additional face-to-face encounter will not be required to support payment when ordering replacement DMEPOS items; specifically, an additional face-to-face encounter within the 6 months preceding an order/prescription for replacement items is not required. The rule clarifies that a “replacement” means provision of an item that replaces an item under the same HCPCS code.
DME Supplier Reporting of Country of Origin
CMS plans to request a revision to its DMEPOS Competitive Bidding Program information collection so that DMEPOS contract suppliers must report the country of origin for lead items furnished during the contract period; the reported country-of-origin information would be displayed in the Medicare Supplier Directory during the contract's period of performance.
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