CMS released its CY 2026 Home Health Proposed Payment Rule on June 30, 2025. The agency projects a 6.4% net reduction in aggregate Medicare payments to home health agencies for 2026—a decrease of approximately $1.135 billion compared to 2025. This net decrease results from several components:
- A 2.4% payment increase to account for inflation and cost growth,
offset by the following reductions:
◦ A 3.7% permanent reduction, which includes a 4.059% cut related to the Patient-Driven Groupings Model (PDGM) to address excess payments made since 2020.
◦ A 4.6% temporary adjustment to recover overpayments from 2020 to 2024, which includes a 5% one-time cut to the national 30-day payment rate.
◦ A 0.5% reduction due to changes in the outlier payment calculation.
In addition to the payment updates, below is a summary of other notable proposed changes HHAs should be aware of:
PDGM Case-Mix Weights
The proposed rule would adjust case weights under PDGM based on 2024 data to “more accurately pay for the types of patients HHAs are serving.” This includes:
- Functional impairment levels
- Comorbidity adjustments
- Low Utilization Payment Adjustment (LUPA) thresholds
F2F Encounter Policy
CMS is proposing to update its face-to-face encounter policy to also allow any physician, not just the certifying one, or the one who cared for the patient in the acute/post-acute facility (from which the patient was directly admitted to home health), to perform the required face-to-face encounter. This change would align the regulation with the CARES Act by removing current restrictions and allowing more types of practitioners—including physicians, NPs, CNSs, and PAs—to complete the face-to-face encounter.
Quality Reporting Program and Value-Based Purchasing
- COVID-19 Measure Removal – CMS is proposing to remove the COVID-19 Vaccine: Percentage of Patients Who Are Up to Date Measure and the corresponding OASIS data element.
- Removal of OASIS Items – CMS is also proposing the removal of four assessment items in the standardized patient assessment: one Living Situation item, two Food items, and one Utilities item.
- Reconsideration Policy Change – This rule also proposes revising the reconsideration policy to allow providers to submit a request for reconsideration of an initial determination of noncompliance if they can demonstrate compliance.
- All-Payer Regulatory Text Change to Conditions of Participation (COPs) – Finally, this rule also proposes updates to the regulatory text to account for all-payer data submission of OASIS data.
- CAHPS and HHVBP – CMS is proposing changes to the Home Health Consumer Assessment of Healthcare Providers and Systems® (HHCAHPS) survey beginning with the April 2026 sample month. Some of the survey questions are being changed, and because of that, three quality measures that rely on those questions can no longer be used reliably in the expanded Home Health Value-Based Purchasing (HHVBP) Model.
So, CMS is proposing to remove the following three measures from the HHVBP scoring system:- Care of Patients
- Communications between Providers and Patients
- Specific Care Issues
- Further HHVBP Changes – CMS is also proposing to add four new measures to the applicable measure set:
- Three OASIS-based measures focused on bathing and dressing, and…
- One claims-based measure: the Medicare Spending per Beneficiary for the Post-Acute Care (PAC) setting.
Medicare Provider Enrollment
To reduce fraud and improper billing, CMS is proposing new and updated rules for provider enrollment:
- Retroactive Revocations – CMS now proposes to expand the reasons it can revoke enrollment retroactively to better prevent improper payments.
- Adding Bases for Revocation or Deactivation – CMS is proposing to amend its regulations to:
- Revoke providers when beneficiaries report that the provider did not deliver the claimed services.
- Deactivate Medicare billing privileges enrolled physicians and practitioners who have not ordered or certified services for 12 consecutive months, leaving their billing numbers vulnerable to use by bad actors.
Home health agencies should take time to understand these proposed changes so they know what to anticipate and can prepare accordingly. While the final rule will be released later this year, it’s extremely helpful to start planning ahead—considering how these updates may impact operations, documentation, and overall business strategy. Staying informed now allows agencies to adapt more smoothly once the changes take effect.
Read the full fact sheet from CMS on the 2026 proposed rule here>
