2027 Home Health Proposed Rule Released: What Home Health Agencies Need to Know

The 2027 Home Health Proposed Rule has been released. A public comment period will remain open through August, and we’ll share the specific deadline and details a little later. In the meantime, it’s important to begin reviewing the proposed changes and developing your comments, as this rule could have a significant impact on home health agencies.

The Proposed Rule covers several key areas. It includes CMS’s analysis of PDGM data, which we’ll discuss in more detail in a future Monday Minute. It also proposes updates to the temporary adjustment and base payment rates. In addition, as part of the annual update process, CMS has proposed revisions to case-mix weights, LUPA thresholds, and functional impairment levels.

The Proposed Rule also includes proposed updates to the Wage Index and the Fixed Dollar Loss Ratio used to calculate outlier payments. We’ll take a closer look at those shortly.

Home Health Prospective Payment System

The next section of the Proposed Rule addresses palliative care services under the Medicare Home Health Benefit. This is a significant and somewhat complex proposal that raises important questions about how palliative care may be provided within the existing benefit. A future Monday Minute will be dedicated to this topic because it deserves a more in-depth discussion, and it’s an area agencies should carefully consider when preparing comments. The Proposed Rule also includes a Request for Information seeking feedback on the development of a new Home Health Wage Index and how it should be structured.

In addition to the proposed payment updates, one of the most significant aspects of this rule is the proposed changes to Provider Enrollment Requirements. We’ll briefly cover those at the end of today’s Monday Minute and provide a more detailed discussion in the near future.

Proposed Payment Adjustment

The proposed 2027 national standardized payment rate is $2,092.27, compared to the current rate of $2,038.22. This proposed rate reflects the annual payment update, including the applicable wage index adjustment and the continued temporary adjustment factor.

One point that’s important to understand is how CMS applies the temporary adjustment. Rather than calculating this year’s payment from a rate that already reflects last year’s temporary adjustment, CMS begins with the pre-adjustment base rate before applying the current year’s calculations. This approach prevents the temporary adjustment from becoming a permanent reduction built into future payment rates.

As a result, after completing the proposed calculations for 2027, the national standardized payment rate would increase to $2,092.27, which is certainly encouraging news for home health agencies.

LUPA Thresholds

The LUPA payment rates are proposed to increase in line with the annual market basket update. As in prior years, they are not subject to the behavioral adjustment. The Proposed Rule does not include any changes to the LUPA add-on factors, so those would remain unchanged if finalized.

Home Health Quality Reporting Program

In last year’s Final Rule, CMS requested feedback on shortening the amount of time agencies have to submit OASIS assessments used to calculate quality outcome measures. Currently, agencies have approximately four and a half months after the end of the reporting period to complete those submissions. Under the 2027 Proposed Rule, that timeframe would be reduced to 45 days. If finalized, agencies would need to ensure all OASIS assessments used for annual outcome calculations are submitted within 45 days after the end of the calendar year.

CMS included analysis indicating that the vast majority of OASIS assessments are already submitted within a 45-day timeframe. If this proposal is finalized, it should allow quality outcome measures to be calculated and reported more quickly, giving agencies timelier feedback on their performance.

Home Health Value Based Purchasing

One of the most encouraging aspects of the Proposed Rule is that there are no additional changes proposed for the Home Health Value-Based Purchasing (HHVBP) Model. After implementing significant updates in 2025 and adapting to the new changes taking effect in 2026, agencies would have an opportunity to focus on those requirements without preparing for another round of HHVBP changes in 2027.

The Proposed Rule also includes discussion about the potential future use of the Discharge to Community Post-Acute Care measure and the Discharge Function Score beyond the HHVBP Model. CMS indicates these measures may eventually be incorporated into the Quality of Patient Care Star Rating. While no changes are being proposed at this time, the discussion suggests this could become a topic in a future rulemaking cycle.

Medicare Provider Enrollment

One of the most significant proposals in this rule involves changes to Medicare Provider Enrollment requirements. These proposed changes extend well beyond home health and, if finalized, would affect many other Medicare provider types, including hospice. This is an area agencies should review carefully, as the potential impact could be substantial. This would include changes to:

• Retroactive Revocations
• Shortened Post-Revocation Claim Submissions
• Abuse of Billing Privileges
• False or Misleading Information
• High-Risk Enrollments
• Misdemeanor Convictions
• Hospice Medical Directors and Administrators
• Shared Suites and Misuse of Identity
• Expanded Reach to Owners, Managers, and Related Parties
• Changes in Majority Ownership
• Reapplication Bar
• Affiliation Disclosures
• Payment Suspensions

Among the proposals are stricter penalties for submitting false or misleading information to Medicare. While inaccurate information on an enrollment application can already result in a denial, CMS is proposing substantially stronger enforcement actions, including barring you from applying to the Medicare program for 10 years. The proposal would also expand these requirements beyond initial enrollment applications to include other forms and documentation submitted to Medicare, which could result in being barred from the Medicare program or having your license revoked. If finalized, these changes would reinforce the importance of ensuring all information provided to Medicare is accurate, complete, and thoroughly reviewed before submission.

The Proposed Rule also places greater emphasis on the qualifications and backgrounds of key leadership personnel, including hospice administrators and medical directors. Providers may need to exercise increased diligence during the hiring process, particularly when evaluating an individual’s prior affiliations with other Medicare providers. Under the proposal, past involvement with organizations found to have engaged in fraudulent activity could have implications for a provider’s Medicare enrollment status, underscoring the importance of thorough vetting and oversight of leadership positions.

The Proposed Rule also targets several enrollment practices that CMS considers potential program integrity risks. One area of focus is multiple providers operating from the same address or suite, which could receive increased scrutiny during the enrollment process. The proposal also addresses changes in majority ownership, reinforcing the importance of transparency when ownership transitions occur. CMS indicates that ownership changes involving individuals or entities with a history of fraudulent activity may receive heightened review and could affect a provider’s enrollment status if the proposal is finalized.

The Proposed Rule also includes additional discussion regarding Medicare payment suspensions. CMS outlines its authority and processes surrounding the suspension of payments while potential program integrity concerns are being reviewed. Because payment suspensions can significantly affect an agency’s cash flow and operations, providers should carefully review these proposed provisions and understand how they could apply if finalized.

Home Health Specific Wage Index

The Proposed Rule also includes a Request for Information seeking feedback on the development of a home health-specific wage index, including the potential use of alternative data sources. In addition, CMS is requesting input on whether Advanced Care Planning should be considered as a future quality measure for home health.

While the proposed payment updates are certainly encouraging, they are only one part of this rule. The proposed Medicare provider enrollment changes are extensive and could have significant implications for home health agencies. Providers should take the time to review the rule carefully and consider submitting comments during the public comment period. We’ll continue to break down these proposals in upcoming Monday Minutes and will also provide a more comprehensive review during our FREE HPS Webinar “2027 Home Health Proposed Rule” on August 3, 2026.

If Healthcare Provider Solutions can assist your agency in evaluating how these proposed changes may affect your operations, compliance, or reimbursement, our team is here to help. Please reach out to us.

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