CMS Releases Calendar Year 2026 Home Health Final Rule

On November 28, the Centers for Medicare & Medicaid Services (CMS) issued the calendar year (CY) 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates final rule.

CMS has also released a fact sheet accompanying the final rule, along with a fact sheet addressing durable medical equipment competitive bidding provisions.

The National Alliance for Care at Home (the Alliance) issued a statement in response.

Key provisions include:

• For CY 2026, payments to HHAs will be reduced by 1.3%, or $220 million, which reflects the impact of a 2.4% update in payments due to the statutorily-required annual payment update, a 0.9% reduction in payments due to a permanent budget neutrality adjustment, a 2.7% reduction in payments due to a temporary budget neutrality adjustment, and a 0.1% decrease in payments related to a proposed update to the Fixed-Dollar Loss (FDL) ratio.
• Finalizes changes to who may conduct the Face-To-Face encounter policy.
• Updates the Home Health (HH) Quality Reporting Program (QRP) by removing COVID-19 and several assessment items.
• Finalizes updates to the Home Health Consumer Assessment of Healthcare Providers and Systems® (HHCAHPS) survey beginning April 2026.
• Includes an update to the Home Health Value Based Purchasing Program (HHVBP) to reflect the new HHCAPHS survey and proposes four new measures.
• Finalizes Medicare provider enrollment changes.
• Makes several changes to the DME competitive bidding program.

The overall impact of the rule is an estimated -1.3% ($220 million) decrease in payments relative to CY 2025. This is in comparison to a proposed -6.4% ($1.135 billion) decrease in payments relative to CY 2025. View the final rule and its wage index tables.

The Alliance commends CMS for revisiting aspects of its flawed payment approach, including the conclusion of permanent payment adjustments with CY 2026 (using data from CY 2020 through 2022) based on issues that CMS acknowledged with isolating PDGM behavior changes from non-PDGM behavior changes in CYs 2023 and beyond. In total, CMS’s changes from proposed to final rule amount to approximately $915 million more in payments to home health agencies for 2026. However, any cut will be detrimental in the face of years of compounding decreases, and more action is needed to help preserve integrity, stability, and predictability in Medicare’s home health benefit. While CMS reduced the amount of overpayments that inform the temporary payment adjustments down to 4.7 billion for CYs 2020 through 2024, home health agencies will continue to face several more years of temporary adjustments without additional action.