The US Center for Medicare & Medicaid Services (CMS) released payment rules proposed by Cy 2026 Home Health on Monday.
The rule predicts a total reduction in Medicare payments to home healthcare in 2026 by 6.4%, indicating an estimated $1.135 billion decrease compared to 2025.
“The proposed 2026 updated fee includes a 2.4% increase ($425 million increase) CY 2026 HH payment renewal; an estimated 3.7% decrease ($655 million decrease) reflecting the net impact of permanent behavioral adjustments required by the law, and an estimated 4.6% decrease reflecting the net impact of the proposed temporary adjustment ($815 million decrease). CMS fact sheet shows the impact of the proposed update on the FDL ratio ($90 million decrease). “CMS estimates that Medicare payments to HHAS in cy 2026 will be down 6.4%, or $1.135 billion, compared to 2025, based on the proposed policy.”
The National Alliance for Home (The Alliance) said while helping organizations improve the quality of care, renewals in payments are “flawed and shortsighted” and will increase the costs of the American health care system.
“This key rule relies on sustainable delivery of home health care across the country. CMS has failed not only for our providers, but millions of Americans who rely on home health services. “We are worried about negligent proposed payment renewals. This deepens the heartless pattern of inadequate coordination that has led providers to close their doors and cut back on services, and now threatens to further reduce access to care by forcing more HHAs to do the same.”
CMS has announced a permanent reduction of 4.059% on Cy 2026's home health payment rate due to the impact of the Patient-Driven Grouping Model (PDGM).
This is the fourth consecutive year that CMS has enacted permanent payment cuts for home hygiene payments.
“This adjustment explains the difference between expected and actual behavioral changes in estimated aggregate spending due to the implementation of PDGM's CY 2020 and the changes to 30-day payment units,” read Fact Sheet.
The proposed rules also include a one-time 5% reduction to the national standardized 30-day payment rate for 2026, attempting to pay from 2020 to 2024. The reduction will collect a temporary adjustment amount of approximately $786 million, totaling approximately 14.8% of the calculated temporary adjustments for 2020-2024.
CMS expects additional temporary adjustments will need to be made in 2025 and 2026.
The proposed rules use data from 2024 to readjust the case weights of PDGM including dysfunction levels, comorbidity adjustment subgroups, and low-use payment adjustment (LUPA) thresholds using “Pay more accurately for HHAS types.”
The alliance urged the CMS to reevaluate the proposed rules and use its “full authority” to reevaluate the rules and ensure the continued delivery of home health care.
“Instead of deciming this beloved, high-value program, CMS should focus on modernizing the benefits of home health care by expanding the role of telehealth, eliminating fraud, waste, and abuse, and ensuring access to care for the most medically and socially vulnerable groups,” Landers said.
This is a developing story. Stay tuned for the latest information.
Editor's Note: Previous versions of this story mistakenly referred to the proposed rule as the final rule. The error has been fixed.
