CMS has issued two major updates for 2026: the Medicare Participation Announcement and the final rule for the CY 2026 Home Health Prospective Payment System (HH PPS). Both outline the agency’s strategic priorities for the coming year and the financial impact on home health providers.
2026 Medicare Participation Announcement
CMS released its annual participation letter, reaffirming its partnership with clinicians and emphasizing Medicare’s role as one of the nation’s most impactful bipartisan programs. The agency praised providers for their continued commitment to high-quality, patient-centered care and highlighted several strategic priorities for 2026.
Key Focus Areas for 2026
- Reducing administrative burden to give clinicians more time with patients.
- Easing regulatory limits on where and how clinicians can deliver care.
- Strengthening program integrity to protect beneficiaries and taxpayer dollars.
- Aligning payment with outcomes to support high-value, evidence-based care.
- Leveraging technology to support whole-person care and care coordination.
CMS emphasized its ongoing goal: ensuring every Medicare beneficiary has access to high-quality, equitable, and sustainable care.
See the full letter here: https://www.cms.gov/medicare-participation.
CY 2026 Home Health Prospective Payment System Final Rule
On Nov. 28, CMS finalized updates to the Home Health PPS for calendar year 2026. While the payment formula includes a statutory 2.4% update, several downward adjustments result in an overall 1.3% reduction in Medicare home health payments compared to 2025.
Finalized Payment Updates for 2026
- +2.4% payment update (approximately +$405M)
- –0.9% permanent adjustment tied to PDGM behavior assumptions (approximately –$150M)
- –2.7% temporary adjustment to recoup prior overpayments (approximately –$460M)
- –0.1% fixed-dollar loss ratio adjustment for outlier payments (approximately –$15M)
Net result: Medicare payments to home health agencies will decrease by an estimated 1.3% (–$220M) in 2026.
- Full fact sheet
- Final rule
- DMEPOS Competitive Bidding Program fact sheet
- HH PPS webpage
- HHA Center webpage
- Home Health Patient-Driven Groupings Model webpage