The Centers for Medicare and Medicaid Services on Wednesday afternoon released its proposed 2027 payment rule for home health agencies.
The rule includes an aggregate payment increase of $420 million, or 2.4%, based on a proposed payment update of 2.1% and an estimated 0.3% increase related to the fixed dollar loss ratio. That 2.1% payment update represents $370 million, according to a CMS fact sheet.
The proposal also includes updates to payment methodologies, case-mix weights, outlier payments, and quality reporting requirements, while seeking feedback on expanding access to home-based palliative care.
Beyond the payment policy, CMS is proposing a series of anti-fraud measures that would make all Medicare enrollment revocations retroactive and expand the agency’s authority to deny or revoke the enrollment of providers and suppliers linked to compliance violations.
The proposed rule introduces tough new measures to combat Medicare fraud and improper payments, a key CMS priority under the Trump administration. During Trump’s second term, CMS is aggressively addressing fraud, waste and abuse in the home health and hospice sectors.
In May, the Trump administration issued a six-month moratorium on hospice and home health agencies enrolling in Medicare as part of its efforts to combat fraud. CMS said the “data-driven” decision points to a key source of fraudulent activity. This followed a similar announcement made earlier this year of a moratorium in durable medical equipment, prosthetics, orthotics and supply companies.
Calendar Year (CY) 2027 Home Health Care Prospective Payment System (PPS) proposed rule (PDF) includes changes intended to strengthen CMS’s ability to recover improper payments and remove non-compliant providers and suppliers from Medicare, according to a CMS news release.
The agency estimates that these actions will save approximately $82 million annually., while expanding access for patients receiving home care and improving the timeliness of quality publicly reported information from home health agencies.
Although included in the FY 2027 home health PPS proposed rule, the provider enrollment provisions would affect any provider and supplier participating in the Medicare program, CMS noted.
“These proposals would provide CMS with stronger tools to protect Medicare beneficiaries and taxpayer dollars from fraud, waste and abuse,” CMS Administrator Mehmet Oz, MD, said in a statement. “The Trump Administration is committed to ensuring that only qualified providers and suppliers participate in Medicare while preserving access to high-quality care for patients across the country.”
Currently, CMS can recover payments retroactive to the date of noncompliance for certain Medicare provider enrollment revocation reasons.
The proposed rule would make this possible for all Medicare provider enrollment revocations, regardless of the reason for the revocation. This would allow CMS to recover additional funds from taxpayers and help ensure that non-compliant providers and suppliers do not receive payments from Medicare.
In addition, CMS also wants to add several new grounds for revocation or denial of enrollment and expand existing authorities. Under the proposed changes, CMS could revoke a provider’s or supplier’s Medicare enrollment if the enrollment poses a high risk of fraud, waste, and abuse because the provider or provider is located within a limited geographic area that has an excessive number of providers and suppliers, according to the proposed rule.
CMS could deny or revoke a provider’s or provider’s Medicare enrollment if they have been convicted of a misdemeanor related to sexual assault or financial misconduct within the last 10 years.
Hospices, home health agencies, and providers of durable medical equipment, prosthetics, braces, and supplies must re-enroll in Medicare as new providers and undergo survey and accreditation if there are changes in majority ownership. In the draft rule, CMS proposes to deny or revoke enrollment if this requirement is violated.
In the proposed rule, CMS also seeks to promote access and use of community-based palliative care services. The agency is seeking comments on how to best promote access to community-based hospice services through existing Medicare benefits, including the Medicare home health benefit. CMS said it will provide examples of palliative care through subregulatory guidance.
To improve transparency for patients and their families, CMS is also proposing to shorten the Assessment and Outcomes Information Set data submission timeline from 4.5 months to 45 days, providing people with Medicare with more timely information to make informed care decisions. CMS estimates that the proposal could make quality publicly reported information available up to three months sooner.
The proposed rule also includes updates related to durable medical equipment, prosthetics, orthotics and supplies, the home health care quality reporting program, hospice, and the Medicare provider enrollment process.
The agency proposes several updates to more closely align the home quality reporting program with the expanded home health value-based purchasing (HHVBP) model.
For durable medical equipment, CMS proposes to expand Medicare DME coverage beginning April 1, 2027, to include certain external infusion pumps and associated home infusion medications that would not otherwise meet the “appropriate for home use” standard.
