Dear Providers,

The Centers for Medicare & Medicaid Services (CMS) has released the Calendar Year (CY) 2026 Home Health Prospective Payment System (PPS) Final Rule, outlining updates to Medicare home health payment rates and several policy, quality reporting, and program integrity provisions.

Although CMS originally proposed a permanent payment reduction of approximately $60 per 30-day period, the final rule adopts a significantly smaller—yet still meaningful—net decrease of about $19 per 30-day period after all permanent, temporary, and technical adjustments are applied. This reflects CMS’s updated reassessment of assumed versus actual behavior changes under PDGM using newly available 2024 data.

In total, CMS projects a –1.3% ($220 million) decrease in aggregate Medicare payments to home health agencies for CY 2026.

Key Provisions

Payment Rate & PDGM Adjustments

• –1.023% permanent adjustment and –3.0% temporary adjustment for CY 2026.
• Updated case-mix weights, functional impairment levels, comorbidity groupings, and LUPA thresholds.
• Finalized reductions equal approximately $19 per 30-day period, rather than the initially proposed ~$60 cut.

Home Health Quality Reporting Program (HH QRP)

• Removal of the COVID-19 vaccination measure.
• Removal of four standardized patient assessment data elements.
• Implementation of a revised HHCAHPS® survey beginning April 2026.
• Updated reconsideration and extraordinary-circumstance exception processes.

Home Health Value-Based Purchasing (HHVBP)

• Removal of three HHCAHPS®-based measures.
• Addition of four new measures, including:
  • Medicare Spending per Beneficiary – Post-Acute Care (MSPB-PAC) (claims-based).
  • Three new OASIS-based functional measures focused on:
    • Talking with patients about home safety.
    • Reviewing prescribed and over-the-counter medications.
    • Discussing medication side effects.
  • Adjusted weighting across measure categories.

Conditions of Participation (CoPs)

• Clarification that OASIS reporting applies to all skilled patients, regardless of payer.

Provider Enrollment

• Expanded grounds for denial, revocation, and deactivation.
• Shortened reporting timeframe for adverse legal actions (30 days, previously 90).
• Expanded authority for retroactive effective dates.

ACHC will continue monitoring CMS updates and will provide additional information to help agencies prepare for the CY 2026 changes.