CY 2027 Home Health Proposed Rule: What Agencies Should Know 

CMS has issued the Calendar Year 2027 Home Health Prospective Payment System proposed rule, which includes proposed updates to home health payment rates, quality reporting timelines, provider enrollment safeguards and additional policy areas affecting home health agencies. 

As always, Simple continues to monitor regulatory updates like these to help home health agencies stay informed and prepared. 

What CMS Announced 

CMS is proposing a 2.4% aggregate increase in Medicare payments to home health agencies for CY 2027, or approximately $420 million compared to CY 2026. According to CMS, this includes a proposed 2.1% home health payment update and an estimated 0.3% increase related to the proposed fixed-dollar loss ratio for outlier payments. (cms.gov) 

CMS is also proposing to continue applying a temporary -3.0% adjustment to the CY 2027 national, standardized 30-day payment rate as part of its ongoing effort to address budget neutrality requirements related to the implementation of the Patient-Driven Groupings Model. CMS is not proposing an additional permanent adjustment to the CY 2027 30-day base payment rate. (cms.gov) 

The proposed rule was filed for public inspection on July 1, 2026, and is scheduled for publication in the Federal Register on July 6, 2026. (federalregister.gov) 

Key Areas for Home Health Agencies to Review 

While the proposed payment update will likely receive significant attention, the rule includes several other areas that home health leaders may want to review closely. 

Payment and PDGM Updates 

CMS proposes routine updates to home health payment rates for CY 2027, including recalibration of PDGM case-mix weights, updates to low utilization payment adjustment thresholds, updates to functional impairment levels and updates to comorbidity adjustment subgroups. CMS is also requesting information on the potential development of a home health-specific wage index. (cms.gov) 

For agencies, this means the payment update should not be viewed only as a single percentage change. Teams may want to review how the proposed PDGM, outlier, LUPA and wage-index-related changes could affect their organization’s reimbursement outlook.

Provider Enrollment and Program Integrity 

CMS is also proposing several provider enrollment provisions intended to strengthen Medicare program integrity. Although included in the CY 2027 Home Health PPS proposed rule, these provider enrollment proposals would apply across Medicare providers and suppliers. 

One significant proposal would make all Medicare enrollment revocation grounds retroactive. Under current rules, some revocations take effect prospectively, while others can be retroactive to the date noncompliance began. CMS is proposing to make all revocation grounds retroactive, which would expand CMS’ ability to recover payments from providers or suppliers found to be noncompliant. (cms.gov) 

CMS is also proposing additional denial or revocation authorities, including policies related to certain ownership changes, license suspensions or terminations, and other situations CMS identifies as presenting fraud, waste and abuse concerns. (cms.gov) 

For compliant providers, these proposals reinforce the importance of maintaining strong enrollment, ownership, licensing and compliance documentation processes.

Palliative Care Under the Home Health Benefit 

CMS is also seeking to promote access to community-based palliative care through existing Medicare benefits, including the Medicare home health benefit. In the proposed rule, CMS states that the home health benefit can play an important role when a patient needs palliative care during serious or progressive illness. CMS also indicates that it plans to provide examples of skilled palliative care services through future sub-regulatory guidance. (cms.gov) 

This area will be important for agencies to monitor, especially as CMS continues to clarify how palliative care may be furnished and billed under existing home health requirements for eligible patients. 

HH QRP and Data Submission Timelines 

CMS is proposing changes to the Home Health Quality Reporting Program, including revisions to assessment data submission deadlines beginning with the CY 2027 HH QRP program year. CMS also proposes to revise OASIS and HHCAHPS Annual Payment Update reporting timeframes to report a calendar year of data from January 1 through December 31. (cms.gov) 

CMS has framed these updates as part of a broader effort to improve alignment between the HH QRP and the expanded Home Health Value-Based Purchasing Model. CMS is not proposing expanded HHVBP Model-specific policy changes in this rule. (cms.gov) 

For home health agencies, the proposed reporting timeline changes may make timely OASIS review, validation and submission processes even more important.

What This Means for Providers 

The CY 2027 proposed rule touches several areas of home health operations, including reimbursement, quality reporting, palliative care, compliance and Medicare enrollment. 

Agencies may want to pay particular attention to: 

• The proposed 2.4% aggregate payment increase and how it may translate across agency-specific payment factors 
• The continued -3.0% temporary adjustment related to PDGM budget neutrality 
• Proposed changes to OASIS and quality reporting submission timelines 
• Future guidance related to palliative care under the home health benefit 
• Provider enrollment proposals that could expand CMS’ ability to deny, revoke or recover payments from noncompliant providers 
• The request for information on a potential home health-specific wage index 

Because this is a proposed rule, these policies are not yet final. Agencies should continue reviewing the rule, evaluating potential operational impact and watching for the final rule later this year.

Important Date 

Comments on the proposed rule are due by August 31, 2026. 

Simple Will Continue Monitoring Updates 

Simple will continue tracking CMS updates related to the CY 2027 Home Health PPS proposed rule and sharing information to help agencies understand what is changing and how it may impact payment, quality reporting, compliance and operational workflows.