2026 Home Health Proposed Rule Released

On June 30, 2025, CMS released the 2026 Home Health Proposed Rule, and with this proposal comes the introduction of a number of unexpected and significant changes that could have far-reaching impacts across the industry.

PROPOSED PAYMENT ADJUSTMENT

Many of you are likely unsurprised to see another proposed reduction to our base rates, as this has been a recurring theme since the introduction of the PDGM model. Over the past three years, each proposed rule included a rate cut, but the final rule ultimately reduced that adjustment by half. While these reductions have been softened, the remaining amounts not collected each year have been accumulating in a clawback fund—an amount we are still expected to repay at some point in the future.

Due to the growing clawback deficit, which has now reached $5 billion, CMS is proposing a temporary 5% reduction for 2026 on top of the permanent adjustment. This temporary cut would mean for the 2026 calendar year, and if CMS intends to continue it beyond that, it would need to go through the rulemaking process again in future years.

When you combine both proposed adjustments with the projected increase in the Market Basket, the result is a net decrease of approximately 6.4% to our rates in 2026. At a time when many home health agencies are already fighting to stay afloat, an additional cut of this magnitude could be devastating. CMS is hearing concerns at both the state and national levels, but they need to hear directly from you—individual home health agencies on the front lines—about how these cuts are affecting your ability to provide care. It’s critical that you actively engage in advocacy efforts to oppose these reductions.

As the rule is officially published in the Federal Register, there will be easy-to-access links allowing you to submit your comments online with just a few clicks. The process is now quick and straightforward—no need to draft letters or send anything by mail. Please make it a priority to participate in this advocacy effort. Additionally, your state association and the National Alliance for Care at Home are valuable resources for tools and guidance on what to include in your comments regarding this Proposed Rule.

CASE MIX WEIGHT/LUPA THRESHOLDS

In addition to the rate adjustments, CMS has also proposed the usual updates to key elements such as the case mix weights, LUPA thresholds, and the outlier fixed dollar loss calculation—which, while technical, directly influence the overall rate structure.

FACE-TO-FACE ENCOUNTERS

They’ve also introduced some unexpected, positive changes. This involves proposed revisions to the face-to-face encounter requirements. Currently, a face-to-face encounter must be performed either by the certifying practitioner for the home health plan of care or by another provider working in direct collaboration with that certifying practitioner. Alternatively, it can be conducted by a facility that directly referred the patient to home health services.

The proposal states that beginning January 1, 2026, home health agencies would be permitted to accept a face-to-face encounter from any qualified practitioner. For instance, if you receive a referral from a patient’s primary care physician who will be signing the home health plan of care, and you have documentation of a recent visit the patient had with their cardiologist, that encounter could be used to meet the face-to-face requirement. This marks a significant and positive shift, and there is strong optimism about the potential for this change to be finalized.

HHCAHPS SURVEY

In addition, CMS has proposed changes many in the industry have been hoping for—a major overhaul of the HHCAHPS survey. This survey, which is sent to patients and caregivers to gather feedback on the quality of care provided by your home health agency, is set to undergo significant revisions if the proposal is finalized.

For example, the current version of the survey includes six separate questions related to medications. Under the proposed changes, that number would be reduced to just two questions.

Due to the extensive changes proposed for the HHCAHPS survey, three outcome measures that were previously derived from certain survey questions will be removed from the Home Health Value-Based Purchasing Model. This creates a gap in the number of outcome measures available for calculating the Total Performance Score within the model.

OASIS-BASED MEASURES

Alongside the removal of certain CAHPS measures, CMS is proposing the addition of new OASIS-based measures to the Value-Based Purchasing Model starting in 2026. Specifically, they plan to incorporate items M1810, M1820, and M1830, which come from the functional assessment section of the OASIS.

The inclusion of these functional items is unexpected, especially considering that with the introduction of the GG items for use in the discharge function score this year, it was widely assumed that the 1800-series items would no longer play a role in the Value-Based Purchasing Model. However, CMS has stated that these three 1800 items are intended to complement the discharge function score.

With the addition of these items, the number of OASIS-based measures in the Value-Based Purchasing Program will significantly outweigh those from other sources. In response, CMS is proposing a shift in how measures are weighted within the Total Performance Score: OASIS measures would account for 40%, claims-based measures another 40%, and HHCAHPS would be only 20%. This represents a major shift not only for HHCAHPS, but for the entire structure of the Value-Based Purchasing Program.

HOME HEALTH QUALITY REPORTING PROGRAM

There are additional proposed changes to the Home Health Quality Reporting Program that we will cover in more detail during an upcoming Monday Minute.

If you need any support with your home health agency or help understanding the details of the Home Health Proposed Rule, please don’t hesitate to reach out to us. Remember to be your own advocate by submitting your comments during the official comment period, which ends on August 29th.

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