Calendar Year (CY) 2026 Home Health Prospective Payment System Final Rule (CMS-1828-F)

Calendar Year (CY) 2026 Home Health Prospective Payment System Final Rule (CMS-1828-F)

On November 28, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that announces policy changes under the Home Health (HH) Prospective Payment System (PPS), consistent with the legal requirements to update Medicare payment policies for home health agencies (HHAs) annually. This fact sheet discusses the major provisions of the final rule.

CY 2026 Payment and Policy Updates for Home Health Agencies 

This rule finalizes routine, statutorily required updates to the HH payment rates for CY 2026. The CY 2026 updated rates include the final CY 2026 HH payment update of an estimated 2.4% increase ($405 million increase), which is offset by an estimated 0.9% decrease that reflects the final permanent adjustment ($150 million decrease), an estimated 2.7% decrease that reflects the final temporary adjustment ($460 million decrease), and an estimated 0.1% decrease that reflects the updated fixed-dollar loss (FDL) ratio for outlier payments ($15 million decrease). CMS estimates that Medicare payments to HHAs in CY 2026 will decrease in the aggregate by an estimated 1.3%, or $220 million, compared to CY 2025, based on the finalized policies.

In addition, CMS is finalizing recalibrated Patient-Driven Groupings Model (PDGM) case-mix weights; updated low-utilization payment adjustment (LUPA) thresholds, updated functional impairment levels, and comorbidity adjustment subgroups for CY 2026. This rule also finalizes changes to the face-to-face encounter policy by broadening the language in 42 CFR 424.22(a)(1)(v) to align with the language in section 3708 of the Coronavirus Aid, Relief, and Economic Security Act, 2020 (CARES Act) regarding which physicians can perform the face-to-face encounter. 

Permanent and Temporary Adjustments to HH Payment Rates

On January 1, 2020, CMS implemented the HH PDGM and a 30-day unit of payment, as required by section 1895(b) of the Social Security Act (Act), as amended by the Bipartisan Budget Act of 2018. The PDGM better aligns payments with patient care needs, especially for clinically complex individuals. The law required CMS to make assumptions about behavior changes that could occur because of the 30-day unit of payment and the PDGM. CMS finalized three behavior assumptions in the CY 2019 HH PPS final rule: clinical group coding, comorbidity coding, and LUPA threshold. The law also requires CMS to annually determine the impact of differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures, beginning with 2020 and ending with 2026, and to make temporary and permanent increases or decreases, as needed, to the 30-day payment amount to offset such increases or decreases.

For CYs 2023, 2024, and 2025, CMS previously applied reductions of 3.925%, 2.890%, and 1.975%, respectively, which were half of the estimated required permanent adjustment. 

For this final rule we modified the permanent adjustment from our proposal after commenters raised concerns that behavior change after CY 2022 might be attributable to factors unrelated to the implementation of the PDGM, such as the introduction of the OASIS-E assessment; expansion of home health value-based purchasing; and increased Medicare Advantage penetration. 

This rule finalizes a permanent prospective adjustment to the CY 2026 home health payment rate of -1.023%, to account for the impact of implementing the PDGM for CYs 2020 through CY 2022. This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment. 

Additionally, to mitigate a significant single year payment reduction, financial instability and potential access to care issues, we are finalizing a -3.0% temporary adjustment to be applied to the CY 2026 payment rate. The temporary adjustment amount from CY 2020 through 2022 is $4.76 billion.  We will continue to analyze the calculated temporary adjustment each year through CY 2026 claims to determine any future temporary adjustments to account for retrospective overpayments.

As required by law, we will continue to evaluate the impact of differences between assumed behavior and actual behavior changes on estimated aggregate expenditures through CY 2026 claims. 

The actions CMS are taking in this final rule would help improve patient care and protect the Medicare program’s sustainability for future generations. 

Recalibration of PDGM Case-Mix Weights

Each of the 432 payment groups under the PDGM has an associated case-mix weight and LUPA threshold. CMS’ policy is to annually recalibrate the case-mix weights and LUPA thresholds using the most complete utilization data available at the time of rulemaking. In this final rule, CMS is finalizing to recalibrate the case-mix weights — including the functional levels and comorbidity adjustment subgroups — and LUPA thresholds using CY 2024 data to more accurately pay for the types of patients HHAs are serving. 

Changes To the Face-To-Face Encounter Policy

Section 3708 of the CARES Act (Pub. L. 116-136, March 27, 2020) amended sections 1814(a) and 1835(a) of the Act to allow Nurse Practitioners (NP)s, Certified Nurse Specialists (CNSs), and Physicians Assistants (PAs) (as those terms are defined in section 1861(aa) of the Act), to order and certify patients for eligibility under the Medicare HH benefit and establish a plan of care. CMS is finalizing a changing to the face-to-face regulation to allow physicians, in addition to NPs, CNSs, and PAs to perform the face-to-face encounter regardless of whether they are the certifying practitioner or whether they cared for the patient in the acute or post-acute facility from which the patient was directly admitted to HH and who is different from the certifying practitioner. This change will align current regulations with the CARES Act language.

Home Health (HH) Quality Reporting Program (QRP) 

CMS is finalizing the proposals to remove items from the HHQRP. CMS is removing the COVID-19 Vaccine: Percentage of Patients Who Are Up to Date Measure and the corresponding Outcome and Assessment Information Set (OASIS) data element beginning with the CY 2026 HH QRP. CMS is also removing four assessment items in the standardized patient assessment: one Living Situation item, two Food items, and one Utilities item beginning with the CY 2026 HH QRP. This rule also finalizes changes to the reconsideration policy to allow providers to submit a request for reconsideration of an initial determination of noncompliance if they can demonstrate compliance. In very limited circumstances, HHAs will be permitted to request an extension to file a reconsideration request if the HHA was affected by an extraordinary circumstance beyond the control of the HHA (that is, a natural or man-made disaster such as a cyber-attack, hurricane, tornado, or earthquake) during the 30-day reconsideration period. CMS is also finalizing a revised Home Health Consumer Assessment of Healthcare Providers and Systems® (HHCAHPS) survey beginning with the April 2026 sample month. Finally, this rule also finalizes as proposed updates to the regulatory text to account for all-payer data submission of OASIS data. CMS is providing a summary of comments received in response to Requests for Information (RFIs) contained in the proposed rule pertaining to changing the final data submission deadline period from 4.5 months to 45 days; the digital quality measurement (dQM) transition for HHAs and the adoption of health information technology (IT), and standards including Fast Healthcare Interoperability Resources (FHIR); and future HH QRP quality measure concepts of interoperability, cognitive function, nutrition, and patient well-being.

Expanded Home Health Value-Based Purchasing (HHVBP) Model

Changes to the Applicable Measure Set

Beginning April 2026, CMS is finalizing changes to the HHCAHPS survey. These changes affect the survey questions used to calculate three measures that are currently used in the expanded HHVBP Model. Due to the finalized changes to the HHCAHPS survey, CMS is removing these three HHCAHPS survey-based measures: 

• Care of Patients,
• Communications between Providers and Patients, and   
• Specific Care Issues. 

CMS is also finalizing as proposed the addition of four measures to the applicable measure set. This includes three OASIS-based measures related to bathing and dressing, and one claims-based measure, the Medicare Spending per Beneficiary for the Post-Acute Care (PAC) setting measure.

Due to the changes to the Model’s applicable measure set, CMS is finalizing as proposed alterations to the current weights of individual measures and measure categories.

Additionally, CMS is finalizing its proposal to add and codify an additional measure removal factor at § 484.358, Factor 9: It is not feasible to implement the measure specifications.

HHVBP Quality Measure Concepts Under Consideration for Future Years – Request for Information (RFI)

CMS is including in the final rule a summary of comments received in response to an RFI contained in the proposed rule that would build on input from the expanded HHVBP Model’s Implementation and Monitoring technical expert panel (TEP), specifically the addition of a respecified Falls with Major Injury measure as well as two potential changes to the HHCAHPS survey-based measures scoring rules and applicable measure set as they relate to the expanded HHVBP Model.

Medicare Provider Enrollment

In its ongoing efforts to prevent fraud, waste, and abuse, CMS is finalizing several new and revised provider enrollment provisions. We believe these changes will help reduce improper Medicare payments and protect beneficiaries. Our principal provisions include, but are not limited to, the following:

• Retroactive Revocations – Under current regulations, certain Medicare enrollment revocations become effective prospectively – specifically, 30 days after the date that CMS or the CMS contractor mails notice of the revocation to the affected provider or supplier (hereafter “provider”). However, there are several grounds for which CMS can revoke a provider’s enrollment retroactively to the date the provider’s noncompliance began. Retroactive revocation allows CMS to collect monies that have been paid to the provider since the beginning of its noncompliance. For this reason, we are finalizing our proposal to increase the number of grounds for which CMS can revoke a provider retroactively. We believe this will help ensure taxpayer money is paid only to legitimate, compliant providers.
• Adding Bases for Revocation or Deactivation – CMS has seen situations where: (1) enrolled physicians and practitioners have not ordered or certified services for 12 consecutive months, leaving their billing numbers vulnerable to use by bad actors; and (2) beneficiaries attest that a provider did not furnish them the service(s) they claimed. Therefore, CMS is amending its regulations to deactivate the physician/practitioner’s Medicare billing privileges in the first situation and to reiterate our existing authority to revoke providers in the second. 

Durable Medical Equipment, Prosthetic Devices, Prosthetics, Orthotics, & Supplies (DMEPOS) Accreditation

As part of CMS’ longstanding and ongoing efforts to address DMEPOS fraud, waste, and abuse, DMEPOS suppliers must be accredited by a CMS-approved accrediting organization (AO) to enroll in and bill Medicare. The purpose of accreditation is to confirm that the supplier meets the DMEPOS quality standards.^[1] However, the CMS DMEPOS accreditation regulations have not been updated since their original promulgation in 2006, and we believe that program integrity vulnerabilities have risen substantially in the DMEPOS accreditation program over the years. 

We are particularly concerned that there may be instances where: (1) AOs are accrediting DMEPOS suppliers that do not meet the DMEPOS quality standards; and (2) DMEPOS suppliers are falling out of compliance with the quality standards (sometimes for extended periods) after becoming accredited. As a result, we are concerned about beneficiaries’ health and safety as well as the many millions of Medicare dollars that may have been paid to noncompliant suppliers since 2006. Therefore, we are finalizing several updates and enhancements to our regulations so we can exercise greater scrutiny over DMEPOS suppliers and the AOs.   

Our specific provisions center around two general principles:

• More Frequent DMEPOS Supplier Surveys and Reaccreditations – Currently, DMEPOS suppliers are resurveyed and reaccredited every three years. DMEPOS suppliers will now have to be resurveyed and reaccredited annually.   
• Stricter Requirements for Becoming and Remaining a DMEPOS AO – Our finalized provisions regarding stronger oversight of the AOs include, but are not limited to:
  • Increasing the amount, specificity, and frequency of data that AOs must submit to CMS;
  • Expanding CMS’ ability to closely monitor and review AOs’ operations; and
  • Strengthening CMS’ ability to respond to poorly performing AOs. 

We believe that these and other DMEPOS accreditation provisions will help protect Medicare beneficiaries and the taxpayers from unqualified DMEPOS suppliers. 

Exemption Process for the Prior Authorization of Certain DMEPOS Items

CMS is finalizing additional specificity to the DMEPOS prior authorization exemption process. Modeled on a similar exemption process in the hospital outpatient department prior authorization program (42 CFR § 419.83(c)), suppliers achieving a target approval rate of 90% will be offered an exemption from required prior authorization. To determine supplier eligibility for continued exemption, the DME Medicare Administrative Contractors (MACs) would complete a post payment medical review sample. From this claim sample, suppliers must again meet a claim approval rate of 90% or greater to continue their exemption. Suppliers who did not meet the compliance rate threshold must continue submitting prior authorization requests as required. By achieving the compliance rate percentage, the supplier has demonstrated an understanding of the requirements for submitting accurate claims. The DME MACs will provide suppliers notice of an exemption or withdrawal of an exemption at least 60 days prior to the effective date.

Improvements to the DMEPOS Competitive Bidding Program

CMS is finalizing improvements to the DMEPOS Competitive Bidding Program so that we can protect the Medicare Trust Funds and beneficiaries can benefit from lower copays. We expect to announce the product categories for which we will solicit bids and the specific timeframe for the next competition shortly. In addition, beginning the date class II CGMs and insulin pumps are furnished under the DMEPOS Competitive Bidding Program, CMS will begin paying for all continuous glucose monitors (CGMs) and insulin infusion pumps on a monthly rental basis, giving beneficiaries access to current, fully supported technology that meets evolving safety and performance standards. 

For a fact sheet on the changes to the DMEPOS Competitive Bidding Program, visit: https://www.cms.gov/newsroom/fact-sheets/durable-medical-equipment-prosthetics-orthotics-supplies-competitive-bidding-program-updates. 

Resources

For additional information about the Home Health Prospective Payment System, visit: https://www.cms.gov/medicare/medicare-fee-for-service-payment/homehealthpps and https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center.

For additional information about the Home Health Patient-Driven Groupings Model, visit https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/HH-PDGM.

The final rule can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/current. 

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