CMS has finalized a 1.3% decrease in home health payments for 2026, part of its annual Home Health Prospective Payment System update released Nov. 28. The rule includes permanent and temporary payment adjustments tied to the Patient-Driven Groupings Model (PDGM) and several policy changes aimed at easing administrative burdens while strengthening fraud prevention.
Here are the eight main updates:
- Total Medicare home health payments will fall by $220 million in 2026.
This reflects a 2.4% payment update offset by multiple downward adjustments, including permanent and temporary behavioral offsets and outlier recalibrations. - Permanent PDGM behavioral adjustment finalized.
CMS finalized a permanent adjustment to correct differences between assumed and actual provider behavior after PDGM and the 30-day payment unit went into effect. The adjustment is based on 2020–2022 data and was reduced from earlier proposals after stakeholder feedback. - Temporary PDGM adjustment of –3.0% will apply in 2026.
This temporary cut addresses retrospective overpayments tied to PDGM assumptions. CMS estimates the cumulative temporary adjustment from 2020–2022 at $4.76 billion. - Recalibration of case-mix weights and LUPA thresholds.
CMS is updating case-mix weights across all 432 PDGM groups using 2024 utilization data. Functional impairment levels and comorbidity subgroups will also be recalibrated. - Updates to the face-to-face encounter policy.
To align with the CARES Act, physicians, NPs, PAs, and CNSs may now conduct the required encounter even if they are not the certifying provider or did not see the patient in the prior setting. - Home Health Quality Reporting Program (HHQRP) changes.
Five assessment items — including the COVID-19 vaccine measure and items tied to living situation, food, and utilities — are being removed. A revised HHCAHPS survey will launch in April 2026. CMS will also allow limited extensions for reconsiderations related to major events like natural disasters or cyberattacks. - Enhanced program integrity actions.
CMS will expand retroactive revocation authority, deactivate billing privileges for providers with long periods of inactivity, and revoke billing privileges when beneficiaries report services that were never provided. - Stricter DMEPOS accreditation requirements.
Durable medical equipment, prosthetic and orthotic suppliers — and the accrediting organizations that oversee them — will now face annual accreditation requirements. Accrediting bodies must also submit more detailed performance data.