CY 2027 Home Health Proposed Rule: a 2.4% raise with a 3% asterisk
On July 1, 2026, CMS issued the CY 2027 Home Health Prospective Payment System proposed rule (CMS-1844-P); it published in the Federal Register on July 6, 2026 (91 FR 41216), opening a comment period that closes at 5 p.m. EDT on August 31, 2026. The headline number is an estimated $420 million aggregate increase — about 2.4% over CY 2026 — built from a 2.1% payment update (~$370 million) plus a 0.3% increase in estimated outlier payments (~$50 million) from the proposed decrease in the fixed dollar loss ratio.
The asterisk: CMS also proposes a temporary adjustment of −3.0% to the national standardized 30-day payment rate, continuing recoupment of what the agency calculates as overpayments from CYs 2020–2025 under PDGM's budget-neutrality requirement. No additional permanent adjustment is proposed this year, but CMS says it will keep analyzing claims through CY 2026 data, so future permanent adjustments remain on the table. For scale: the −3.0% collects roughly $500 million in CY 2027 — about a tenth of the $4.9 billion temporary-adjustment pool CMS calculates it is still owed — which is why future rules will keep returning to this lever. Industry groups have already objected that the temporary adjustment rests on a disputed behavioral-assumption methodology.
Beyond rates, three items deserve your attention:
Program integrity reaches everyone. The rule proposes making all Medicare enrollment revocations retroactive to the date of noncompliance (today only some grounds allow this), and adds new grounds for denial or revocation — including enrollment that presents elevated program risk and adverse actions in other states or federal programs. The rule would also allow CMS to bar reapplication for up to 10 years after any enrollment denial. These provisions apply across provider and supplier types, not just home health.
Palliative care under the home health benefit. CMS states that skilled palliative care services can be furnished and billed under the existing home health benefit for eligible patients with serious illness — distinct from hospice — with examples to follow in sub-regulatory guidance after the final rule.
Quality reporting mechanics change. The rule proposes shortening the OASIS data submission deadline from 4.5 months to 45 days and moving OASIS/HHCAHPS annual payment update reporting to a calendar-year basis (covered in depth in our companion article). A request for information on constructing a home-health-specific wage index is also open.
What to do now
- Model your CY 2027 revenue with both the 2.4% update and the −3.0% temporary adjustment applied to your case mix — the net effect varies by agency.
- If the wage index RFI or the temporary-adjustment methodology affects you materially, submit comments before the deadline.
- Review your enrollment file and ownership disclosures now; the revocation provisions raise the cost of any inconsistency.