In preparation for the April 1, 2026 implementation of OASIS-E2, CMS has released the final set of materials to support agencies during the transition. Below is a brief overview of what each resource includes.

Home health agencies are encouraged to review these documents carefully, as several updates were made after the draft versions. Beginning preparation now is important, since changes to data items and guidance may impact workflow, documentation, and reporting. Early review and planning can help ensure a smoother transition.

• OASIS-E2 Instrument
  The final All-Item version and all time-point versions of OASIS-E2 are now posted on the HHQRP OASIS Data Sets webpage.
  
  Key updates from the draft versions include:
  • Revised descriptions for the Fall Injury items (J1900B and J1900C)
  • Addition of item A1110 (Language) at the Resumption of Care time point
• OASIS-E2 Guidance Manual
  The final OASIS-E2 Guidance Manual is now available in the download section of the HHQRP OASIS User’s Manual webpage.
  
  It includes a 50-page appendix that clearly outlines what changed from OASIS-E1 to OASIS-E2.

• CMS OASIS Q&As
  CMS also posted the updated February 2026 OASIS Q&As on the QTSO website to provide additional guidance for agencies on implementing the new OASIS-E2.

Read our blog with an overview of key OASIS-E2 updates: Getting Ready for OASIS-E2 Rollout on April 1>

Quick Links:

• Final OASIS-E2 Instruments (ZIP)
• Final OASIS E2 Change Table (PDF)
• OASIS-E2 All Item Data Set
• Final OASIS-E2 Guidance Manual

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The implementation of OASIS-E2 is just ahead, scheduled for April 1, 2026. Home health agencies should start preparing now, as the changes to data items and guidance can impact workflow, documentation, and reporting. Staying informed about the updates is important for a smooth transition.

Here are some of the main item changes in OASIS-E2. Along with data set changes, there are associated guidance changes that agencies need to understand:

• Gender/Sex
  • Item Change: M0069 (Gender) → A0810 (Sex)
  • Guidance Update: Previous instructions referencing “If the patient does not self-identify” have been removed.
• Transportation
  • Item Change: A1250 (Transportation) → A1255 (Transportation)
  • Collection and Coding Updates:
    • No longer “check all that apply”
    • No longer collected at discharge (DC)
    • Updated instructions, coding tips, and examples provided
• Patient Communication & Sensory Items
  • Collection Update: These items will now also be collected at Resumption of Care (ROC).
  • Items Affected: A1110 (Language), B0200 (Hearing), B1000 (Vision)
• Falls Since SOC/ROC
  Item: J1900 (Number of Falls Since SOC/ROC)
  • Updates:
    • Revised item descriptions
    • Guidance changes from October 2025 Quarterly OASIS Q&As and January 2026 OASIS-E1 Guidance Manual Errata
    • Impacts the Respecified Falls with Major Injury quality measure
• Retired Item: O0350 (Patient’s COVID-19 Vaccination is Up to Date)

Changes to item names or collection points, though seem minor, may affect how agencies record and report patient information. This is only a brief overview of the revisions from OASIS-E1 to OASIS-E2. More detailed descriptions and guidance can be found in the change table in Appendix D of the OASIS-E2 Draft Guidance Manual.

Preparing for OASIS-E2: What Agencies Should Focus On

Although CMS describes these updates as “minor,” the change table is over 40 pages long and can affect daily workflows. Agencies should dedicate time to review all updated items and guidance carefully for an effective implementation.

QA plays a crucial role in the OASIS-E2 transition, so it is important for QA staff to review and understand the changes in advance. This allows them to ensure that new items are functioning as intended and that data is recorded accurately according to the updated definitions and guidance. QA staff who understand the updates can also support clinicians as they adapt to new workflows, making it easier for teams to learn and apply the changes correctly. Taking this proactive approach can help maintain data quality and make the overall transition smoother for all staff.

OASIS-E2 Resources

Since last year, CMS has released several resources to help agencies prepare for OASIS-E2. Agencies should actively review these documents, which provide the updated items, guidance, and instructions needed to navigate the transition:

• Final OASIS-E2 Instruments (ZIP)
• Final OASIS E2 Change Table (PDF)
• OASIS-E2 All Item Data Set
• Final OASIS-E2 Guidance Manual

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The April 1 ICD-10 update includes important changes to coding instructions, such as updates to ‘Excludes’ notes and ‘code also’ guidance in 13 chapters. While these updates do not introduce any new, deleted, or revised diagnosis codes, they can still affect code selection and sequencing.

It is important for home health coders to be aware of these updates and to ensure that all coding systems are updated accordingly. Even small note changes can impact compliance and reporting accuracy. 

Changes to “Excludes” Notes

A significant number of updates convert “Excludes 1” notes to “Excludes 2” notes.

As a reminder, Excludes 1 means the two conditions cannot be reported together. Excludes 2 means the excluded condition is not part of the listed code, but both codes may be reported together when appropriate.

• Example:
  • Neoplasms of uncertain behavior (D37–D44, D48) will change from an Excludes 1 relationship to an Excludes 2 relationship with D49 (Neoplasm of unspecified behavior).
    
    This adjustment allows both codes to be reported together if supported by documentation.

Additional “Code Also” and Instructional Note Updates

Several other instructional notes, including “code also” and sequencing instructions, have been revised. These changes cover a variety of conditions, including:

• Coding sequela of concussion (S06.0X- with appropriate 7th character) with F07.81 (Postconcussional syndrome), when applicable.
  
• Coding underlying conditions such as diabetes mellitus (E08.39, E09.39, E10.39, E11.39, E13.39) with H40.84 (Neovascular secondary angle closure glaucoma). The instruction to code diabetes first has now been revised to a “code also” note.

The April 1 update may look minor at first glance, but revisions to Excludes notes and sequencing instructions can significantly impact code assignment. Taking time to review the addendum now will help prevent errors and ensure compliant reporting moving forward.

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The Medicare telehealth flexibilities that allowed home health face-to-face (F2F) encounters to be conducted via telehealth have expired as of January 30, 2026. These flexibilities had been extended several times, with the most recent extension issued in November 2025, which extended the rules through January 30, 2026. With the expiration, agencies must now follow the standard Medicare rules, which generally require in-person F2F visits.

The good news is that The U.S. House of Representatives passed a consolidated appropriations bill (H.R. 7148) on January 22, 2026, which includes provisions to extend Medicare telehealth flexibilities through December 31, 2027.

However, the bill has not yet passed the Senate or been signed into law, so it is uncertain when or if the extension will officially take effect.

What this means for HHAs

• Potential Retroactive Coverage
  If H.R. 7148 becomes law, it might retroactively apply telehealth flexibilities back to January 30, 2026, but this is not guaranteed. Agencies should not assume retroactive coverage yet.
• F2F encounters return to pre-pandemic rules
  With the expiration of telehealth flexibilities on January 30, F2F encounters must be conducted in person to qualify for home health admission under current Medicare rules.
  
  Unless H.R. 7148 is enacted and applied retroactively, telehealth F2F encounters documented after January 30 may be considered invalid, and claims based on them could be denied or not affirmed. To minimize risk, agencies are advised to conduct all F2F encounters in person whenever possible.

With the expiration of telehealth flexibilities, in-person F2F encounters remain the safest option unless Congress or CMS issues new guidance. The best approach is to communicate proactively with practitioners and patients, flag potential risks, and watch closely for updates that could affect billing and compliance. While a retroactive extension remains possible, agencies should not assume they will happen — planning ahead now is the safest course of action.

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In the CY 2026 Home Health Final Rule, CMS updated how functional impairment levels are calculated under PDGM. Each home health episode is assigned a functional impairment score based on responses to OASIS Functional items (commonly called M-items), which assess a patient’s ability to perform activities of daily living. These scores directly influence case‑mix and payment rates.

For CY 2026, CMS recalibrated the functional points using recent claims data to better reflect current patient needs and resource use. Responses to the M-items now carry revised point values, outlined in the table below. The sum of these points determines low, medium, or high functional impairment levels, which guide PDGM payment adjustments.

Accurate scoring of the M-items is critical. Over- or underassessment of functional abilities can result in misaligned payments, inadequate resource allocation, and potential compliance risks. Regular clinician education is essential to maintain scoring accuracy. In addition, leverage your QA processes to ensure proper interpretation of patient functional ability and verify that all responses align with clinical documentation. These steps not only protect agency revenue but also support high-quality patient care by ensuring that patient needs are accurately captured and addressed.

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In the CY 2026 Home Health Prospective Payment Final Rule, CMS finalized updates to the Patient-Driven Groupings Model (PDGM) that recalibrate how comorbid conditions influence payment adjustments. These updates reflect CMS’s ongoing effort to better align Medicare payments with actual patient care needs using the most recent utilization data.

CMS updated the PDGM comorbidity adjustment subgroups using 2024 home health claims and OASIS data. The changes are intended to more accurately capture real-world resource utilization patterns for patients with multiple conditions.

What Changed in the Comorbidity Adjustment Subgroups

• Low Comorbidity Adjustment Subgroups
  • The number of low comorbidity adjustment subgroups was reduced to 20, down from 22 in CY 2025. The changes include:
    • Added 3 low comorbidity subgroups:
      • Heart 5
      • Musculoskeletal 1
      • Neoplasm 6
    • Removed 5 current low comorbidity subgroups:
      • Circulatory 7
      • Endocrine 3
      • Neoplasm 1
      • Neurological 11
      • Neurological 12
  • This reflects CMS’s refinement of which diagnoses continue to meet the threshold for low comorbidity payment adjustments based on updated utilization patterns.
• High Comorbidity Subgroup Interaction
  • The number of high comorbidity subgroup interactions increased to 98 in CY 2026 (up from 94 in CY 2025). This includes the addition of 44 new interactions eligible for high comorbidity adjustments, while 40 existing interactions were removed.
  • CMS refined and expanded these interactions to include newly identified diagnosis pairings that consistently drive higher resource use.

Why These Changes Matter

Accurate and complete secondary diagnosis coding is essential for capturing all eligible PDGM adjustments. Agencies and coders should ensure that all relevant diagnoses are documented, as missing or incorrect codes can result in lost payment opportunities.

It’s also important to review the CY 2026 comorbidity updates, since changes to the low and high adjustment lists can affect PDGM payments. Checking the updated subgroup tables will help identify which diagnoses trigger low adjustments and which combinations qualify for high comorbidity adjustments.

Part of a Broader PDGM Recalibration

These comorbidity updates are one component of CMS’s broader PDGM recalibration for CY 2026, which also includes changes to:

• Case-mix weights
• Functional impairment levels
• Low-Utilization Payment Adjustment (LUPA) thresholds

Together, these updates aim to improve the accuracy and fairness of Medicare home health payments by better reflecting patient complexity.

Reference Tables Included

For easier reference, the Low Comorbidity Adjustment Subgroups and High Comorbidity Subgroup Interaction tables can be accessed through the links below so you can quickly access them without digging through the full Final Rule document.

• CY 2026 Low Comorbidity Adjustment Subgroups Table >
• CY 2026 High Comorbidity Subgroup Interaction Table >

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As 2026 begins, home health agencies should keep an eye on several updates that could affect payments, documentation, and compliance. We have listed the updates we believe will matter most to agencies and have a direct impact on day-to-day operations. Staying informed will help agencies maintain quality care, optimize reimbursements, and remain compliant with CMS regulations.

Medicare Payment Update

According to the CY 2026 Final Rule, CMS projects a 1.3% decrease in aggregate Medicare payments to home health agencies in 2026—roughly $220 million compared to 2025. It’s important to note that this is an overall projection and does not translate uniformly across all agencies. The actual impact will vary depending on case mix, utilization, and compliance. With tighter margins, optimizing reimbursement through accurate, complete, and defensible documentation remains critical.

Telehealth Flexibility Extension

Current home health telehealth flexibilities are extended through January 30, 2026. While the expiration date is approaching quickly, lawmakers have previously indicated they are working toward a more permanent solution. Agencies should closely monitor developments, especially since many practitioners now rely on telehealth to complete the F2F encounter needed for home health admission.

Face-to-Face (F2F) Encounter Flexibility

The F2F encounter continues to allow flexibility: it may be completed by a qualified practitioner who is not the certifying practitioner, and that practitioner does not need to have treated the patient in a hospital or post-acute setting prior to home health admission. This remains an important operational allowance, especially for agencies working with diverse referral sources.

OASIS-E2 Implementation

OASIS-E2 is scheduled for implementation on April 1, 2026, with the draft OASIS-E2 Guidance Manual released on December 18, 2025. One notable proposed change is the retirement of Item O0350 (Patient’s COVID-19 vaccination is up to date). Agencies should begin reviewing the draft guidance now to identify workflow, training, and QA adjustments needed ahead of implementation.

Beyond these headline updates, agencies should also stay current on changes within the Home Health Quality Reporting Program (QRP) and Home Health Value-Based Purchasing (HHVBP). Familiarity with measure updates, scoring methodologies, and documentation expectations is key to maintaining compliance, protecting star ratings, and maximizing HHVBP incentives.

As 2026 unfolds, agencies that stay informed and proactive—especially around documentation, OASIS accuracy, and quality performance—will be in a stronger position to adapt to financial and regulatory shifts.

The post Recap of Home Health Updates to Watch for 2026 first appeared on Qavalo.

The U.S. Centers for Medicare & Medicaid Services (CMS) released the CY 2026 Home Health Final Payment Rule on November 28. We have summarized the key changes home health agencies should be ready for in 2026.

Medicare Payment Update

CMS projects that Medicare aggregate payments to home health agencies will decrease by 1.3% (about $220 million) compared to 2025.

How CMS arrived at the 1.3% decrease:
CMS applies multiple annual adjustments—such as the home health payment update, budget neutrality factors, and changes tied to the Patient-Driven Groupings Model (PDGM). When these adjustments are combined, the net result is a 1.3% reduction in total Medicare payments for 2026.

Face-to-Face Encounter Flexibility

CMS is finalizing a change to the face-to-face (F2F) requirements to expand flexibility for agencies and reduce barriers to timely F2F completion.

• Physicians, along with NPs, CNSs, and PAs, may now perform the F2F encounter.
• The F2F encounter may be completed by a practitioner, even if they are not the certifying practitioner.
• The practitioner does not need to have treated the patient in the hospital or post-acute facility prior to the home health admission.

HHQRP Changes for CY 2026

• Removal of the COVID-19 Vaccine Measure & O0350
  • The measure “COVID-19 Vaccine: Percentage of Patients Who Are Up to Date” is being removed from HHQRP.
  • OASIS item O0350 will be removed starting April 1, 2026.
  • Until then, HHAs may submit any valid response (0, 1, or dash) without affecting quality measures.
• Removal of Certain SDOH OASIS Items
  • 4 Social Determinants of Health items—related to living situation, food access, and utilities—will be removed. These items were originally set for collection in 2027, so they are being eliminated before data collection ever begins.
• Reconsideration Policy Update
  • HHAs may request an extension when filing a reconsideration request about a noncompliance determination if they can show the agency was affected by an extraordinary circumstance during the 30-day filing period.
• HHCAHPS Survey Revisions
  • Three questions added, eight removed
  • Changes take effect April 2026
• Updated Patient Survey Star Rating Methodology
  • Five new HHCAHPS-based quality measures added
  • Updated weighting will impact the Patient Survey Star Rating calculation

HHVBP Changes for CY 2026

• Removal of Three HHCAHPS-Based Measures
  The following survey-based measures will be removed because the revised survey no longer supports their calculation:
  • Care of Patients
  • Communications Between Providers and Patients
  • Specific Care Issues
• Addition of Four New Measures
  • 1 claims-based measure: MSPB-PAC (Medicare Spending Per Beneficiary – Post-Acute Care) which aims to promote high-quality, cost-efficient care 
  • 3 OASIS-based measures. These complement the Discharge Function Score and provide a broader picture of functional improvement.
    • Improvement in Bathing
    • Improvement in Upper Body Dressing
    • Improvement in Lower Body Dressing
• Updated Category Weights (for larger-volume HHAs)
  • Reduced weight for HHCAHPS survey measures
  • Increased weight for claims-based and OASIS-based measures
    This shifts more emphasis toward clinical outcomes and resource efficiency.

Home health agencies should keep up with the Final Rule updates to stay compliant, ensure accurate reporting, and maintain operational efficiency. Read the entire CMS Fact Sheet on CY) 2026 Home Health Prospective Payment System Final Rule.

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With the implementation of the FY 2026 ICD‑10‑CM updates effective October 1, 2025, a new diagnosis code has been introduced: Type 2 Diabetes Mellitus without complications, in remission (E11.A). This code was created to reflect an increasingly common clinical scenario: patients who previously had type 2 diabetes but no longer require active diabetes management, having achieved sustained normal blood glucose levels—often through lifestyle changes, weight management, or surgery—but who remain at risk for occasional blood sugar spikes and related effects. 

The new code ensures accurate diagnosis, documentation, and care planning for home-health patients in this category.

Key Documentation & Coding Guidelines

Here are the critical items home-health teams should ensure are addressed in the medical record.

1. Provider documentation must explicitly state “in remission”
   • The ICD‑10‑CM guidelines allow E11.A to be assigned only when the provider documents “in remission.”
   • Terms like “resolved” or “controlled” are insufficient; a query should be made if documentation is unclear.
2. Evidence to support remission status
   • A prior documented diagnosis of type 2 diabetes.
   • Lab values in the non-diabetic range (e.g., HbA1c < 6.5%) over a sustained period.
   • Discontinuation of glucose-lowering medications, if applicable.
   • No ongoing diabetic complications.
   • Optional but helpful: documentation of how remission was achieved (lifestyle, weight loss, surgery).
3. Coding implications and sequence
   • Use E11.A for type 2 diabetes without complications in remission.
     Do not use E11.A if the patient has complications or remains on active diabetes treatment.
     E11.A replaces generic codes like E11.9 when remission is clearly documented.
4. Home-health specific considerations
   • Document remission status in initial and ongoing assessments and care plans.
   • Track lab values, lifestyle interventions, and any relevant procedures or referrals.
   • Even in remission, monitor for risk of recurrence and complications.
   • Ensure functional and clinical documentation aligns with OASIS and HHVBP requirements.

Common Pitfalls

• Using E11.A when documentation only says “resolved” or “controlled.”
• Assigning E11.A while the patient is still on glucose-lowering medications.
• Applying E11.A when complications exist and are not clearly separated from remission.
• Failing to query ambiguous documentation.

Why This Matters for Home Health

• Accurate coding affects case-mix, PDGM payment, and quality reporting.
• Proper documentation supports clinical decision-making, monitoring, and patient education.
• Compliance and audits are simplified when remission status is clearly documented.
• Recognizes patients who do not need intensive management but remain at risk, allowing home-health teams to focus on monitoring and preventive care rather than unnecessary interventions.

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Quality Assurance (QA) review for the OASIS is essential to ensure accuracy, compliance, and optimal reimbursement in home health. However, without the right strategy in place, QA reviews can become time-consuming, inconsistent, and burdensome for clinicians.

By implementing best practices, the review process can be made both efficient and effective.

Standardization of the Review Process

A consistent checklist or structured protocol should be created that covers all critical OASIS items, including demographics, clinical assessments, functional scores, and coding accuracy. Establishing a protocol ensures that no area is overlooked, maintains consistency in review standards, and speeds up the review process.

Emphasis on High-Risk Items

Items most likely to impact outcomes, quality measures, and reimbursement—such as GG functional items, comorbidity coding, and hospitalization risk factors—should receive greater attention during QA review. Focusing on these high-impact areas ensures compliance, process efficiency, and minimizes the need for repeated reviews.

Leveraging Technology

EHR tools and dashboards should be utilized to flag missing or inconsistent data. Automated alerts for incomplete fields, conflicting responses, or high-risk scenarios—such as those generated by third-party OASIS scrubber integrations—can help direct reviewers to the areas that need the most attention. The sticky notes feature in most EHRs is also useful for quickly pinpointing the exact sections that need correction.

Optimal Timing

Knowing the optimum time to conduct QA review for the OASIS and the Plan of Care (POC) is very important for accuracy and process efficiency. QA review for the OASIS is best conducted after completing diagnosis coding. Performing the review at this point allows the QA team to validate whether the OASIS documentation fully supports the selected codes. Any discrepancies between assessment findings and coded diagnoses can be identified and clarified before further processes are completed. This step ensures clinical and coding alignment, supports compliance, and prevents unnecessary re-coding later. 

Conducting the QA review before the POC is generated provides an opportunity to correct documentation gaps and ensure that identified problems, functional levels, and risk factors are accurately reflected. When the OASIS data and diagnoses are verified before POC generation,, the POC can be created based on accurate, complete, and clinically sound information—resulting in better coordination, fewer revisions, and improved overall workflow efficiency.

Clear Feedback, Rationale, and Communication

QA feedback should be communicated clearly and promptly to the clinical team. Corrective recommendations should include the rationale behind them, so clinicians can understand the reasoning and apply it to future charting. This approach promotes ongoing learning and helps improve charting skills over the long term.

Balanced Correction Approach

Certain minor or administrative corrections may be completed directly by the QA team to prevent clinicians from receiving an overwhelming volume of feedback and to save time. However, this should be done selectively and without removing the opportunity for clinicians to learn. For areas with clinical or assessment significance, clinicians should still be guided to make their own corrections, supported by clear explanations and rationale to reinforce learning.

Tracking Trends and Providing Feedback

Common errors or recurring trends across cases should be monitored to identify areas for staff education and process improvement. Regular feedback sessions can prevent repeated mistakes and improve overall OASIS quality.

By following these best practices, OASIS QA reviews can be streamlined, errors can be reduced, and accurate, compliant documentation reflecting patient care can be ensured—all while promoting clinician development and maintaining process efficiency.

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