This article is part of the HHCN+ membership
Last Wednesday I reported that I was closing the public comment window due to the rules for home health proposals. My headline read: “CMS is facing a flood of comments against the 2026 Home Health Payment Regulations.”
The flood turned into a massive flood.
When my first story was published, over 10,000 comments had been submitted. According to the federal register, the total number of comments sent to CMS before the windows closed on Friday was a whopping 952,483.
This number is far higher than my personal expectations and industry insiders' expectations. Dr. Derrel Walker, chief medical officer at Pennant Group (NASDAQ: PTNG), previously said he was hoping for tens of thousands of comments. Walker's expectations have been increased.
Industry workers, agency executives and owners, family caregivers and Medicare beneficiaries were among those who came out in large numbers to protest the proposed rules. This is one of the few examples I have covered a very strong agreement between workers and business interests. We understand that everyone involved in the home healthcare field is at risk.
The proposals included in some of the notable comments on rules draw pictures of alternative reality for the CMS' proposed rules, showing potential paths that do not only mitigate impending rate reductions.
They also emphasize that the meaning of this rule goes far beyond home health providers. The diabetes care and durable medical device industry is also very open-minded, demonstrating the interconnectivity of home health with other healthcare industries.
This week's exclusive member-only HHCN+ update will share insights from comments and offer important takeaways including:
– Insiders in the alternative path industry push CMS
– What the rules of home health care mean for other industries
Industry Recommendations
The home health industry hopes that the CMS final rules will be softer than proposed rules, but comments on the federal registers go beyond the reduction of harm. The organization recommended that CMS rethink calculation methods, take into account trends in Medicare advantage and rethink its approach to budget neutrality.
Home healthcare saves money and is a responsive from industry insiders. Therefore, the comments suggest that the mathematical basis in which the CMS created the proposed rules is flawed and needs to be corrected.
For example, the National Alliance for Home At Home (Alliance) said CMS calculations are “deeply flawed” for a variety of reasons. The organization cited issues that include the fact that data from 2022 onwards do not represent behavioral changes caused by PDGM.
Dallas-based Home Care Home Base, one of the largest technology and management services companies providing home-based care, provided data analytics rooted in a large client base, accounting for 47% of the industry. The analysis shows that home healthcare institutions are not responding to PDGM in the way the CMS expects, the company writes.
“If providers change coding behavior in the CMS suggested way, we expect to see high-paying clinical groups that rise over time compared to low-paying clinical groups,” a comment from HomeCare Homebase said. “However, when examining trends, no significant changes were found in clinical group composition. In fact, the two top-paid clinical groups, wounds and MMTA endocrine, each showed a slight decrease between 2016 and 2024.”
The alliance also said the data contains suspicious claims that appear to be fraudulent while excluding important data.
The comments focus specifically on California fraud. Leadingage said in the letter he believes that Los Angeles County's fraudulent home health services had a major impact on payments compared to national trends.
“Reading begs CMS to conduct an analysis of the growth of home healthcare in Los Angeles
We assess and publicly report the actual, continuing potential impact on overall adjustments since the implementation of California County, PDGM and HHVBP.
The alliance also reports that CMS' forecasts for market basket growth for upcoming payment years have underestimated price growth and serves as “a second major reduction in addition to the already devastating permanent adjustments applied by CMS.”
The Alliance letter to the CMS also states that the organization has found “several legal and technical issues” in a previous proposed rule that the CMS has not yet addressed.
“In addition to addressing concerns about calculations used to determine permanent adjustments and temporary adjustment dollar amounts, CMS must adjust the calculation of temporary adjustment amounts to reflect a reduction in Medicare fee registrations of more than 11% between 2019 and 2024,” the written read. “Finally, reducing service fees saves Medicare's advantage through benchmark reductions and creates scenarios that exceed the total amount CMS has decided for temporary adjustments.”
The American Hospital Association (AHA) recommended that CMS cease neutral cuts for PDGM budgets until its methodology and “more appropriately explain changes in payment forecasts that are not due to provider actions.”
In addition to criticizing the mathematical basis of CMS, the comments raise questions about the role of Medicare's superiority. Comments that are outside the scope of the proposed rules focusing solely on traditional Medicare suggest that CMS cannot ignore other threats to home health reimbursement.
“Even though we provided comparable levels of care and achieved similar outcomes, providers are not adequately compensated for Medicare Advantage Services,” the HomeCare Homebase letter read. “Prefectural providers have historically relied on traditional Medicare margins to offset the lack of Medicare advantage. However, this cross-subcission model is no longer sustainable as Medicare's advantage outweighs traditional Medicare volume and continuous Medicare rate reductions.
HomeCare Homebase also cited data from the client base. For example, it shows other “CMS perceptions and provider reality disconnection” regarding reduced referrals related to staff shortages and reduced referrals related to stagnation of revenue amid in inflation. HomeCare Homebase analysis shows that daily home hygiene revenue has increased by 13% since 2018, but inflation has increased by 27%.
The implicit alternative reality here is that if CMS has in mind the entire ecosystem of pressures facing the home healthcare industry, organizations will reshape their approach to service fees, reducing Medicare advantage and other headwind pressures.
It should also be mentioned that some changes to the proposed rules are generally supported by industry comments, but there may be requests for clarification or warning. These items include removal of the Covid-19 vaccination scale, removal of the Social Determinants of Health (SDOH) items from the OASIS assessment, and the proposed regulations will be changed to face-to-face encounters in-home health.
What else is at risk?
The proposed rules will shake up the home health industry, but comments submitted will clarify the extent to which the rules will have an impact.
This rule becomes the “asteroid” of the Durable Medical Device (DME) industry.
According to HME Business, HHCN's sister publication, the rules expand the durable medical devices, prosthetics, braces and supplies (DMEPO) included in the competitive bidding programme suspended by the CMS since 2021. Supplies of urological products, ostomy products, tracheostomy products, and more are now included in the bidding program. This limits the number of suppliers for these items and places downward pressure on the refund rate, according to comments on the proposed rules.
Glucose monitor (CGM) and insulin infusion pumps have also been proposed for competitive bids, leading to many comments regarding the need for these supplies for diabetes care.
Hometown rebates themselves will have dramatic ripple effects on other industries.
As one commenter wrote, “It makes sense to keep home hygiene as viable as possible to keep costs down compared to facility costs. Reducing home health care will ultimately generate more facility care, as you will need to seek services from these options if home health is not available.”
Aha writes that the proposal for payment rates for home healthcare infrastructure is “surprising” and that hospitals have fewer options when releasing patients as home healthcare institutions decrease.
“The size of this cut can exacerbate the ongoing access challenges for beneficiaries who need (Home care) (HH) care and potentially interfere with acute care and other hospital operations,” reads Aha's letter. “HH institutions are key partners in hospitals for Medicare beneficiaries' recovery, ensuring that patients receive appropriate care in the most appropriate environment. Hospitals rely on HH institutions to avoid patient safety and timely discharge and extended hospital stays.”
The expanded meaning of the rules is far from good news. Patients documented their fear of losing the medical supplies they needed, and supporters from other industries revealed why the rules also affect their businesses. Clicking on the comment showed how far this rule is if passed to a similar iteration proposed.
But it also shows that the industry is giving it a chance that could shake up changes from CMS, or perhaps driving through legislative relief measures like the bill introduced today. Pennant's CMO designed the proposed rules to test responses and suggested to me that with dramatic and ample responses, they could see the light and change their investment.
With the comment list being over 900,000 long, it's hard to imagine a CMS not taking notes.
