The Centers for Medicare & Medicaid Services (CMS) recently released a final rule updating the home health (HH) prospective payment system (PPS) for calendar year (CY) 2026.
Highlights of the rule include:
- An updated 30-day episode payment rate of $2,038.22, comprised of a net 2.4% market basket update, a 3.6% reduction due to budget neutrality requirements of the Patient-Driven Groupings Model (PDGM) and other budget neutrality adjustments. The 2026 rate is down 0.1% from the current $2,057.35. Providers who fail to submit quality data are subject to an additional two percentage point reduction.
- A fixed-dollar loss ratio of 0.37, up from 0.35, with the CMS maintaining the existing 0.8 loss-sharing ratio.
- Recalibrated PDGM case mix weights based on CY 2024 data; updated low-utilization payment adjustment thresholds, updated functional impairment levels and comorbidity adjustment subgroups.
- Modifying the face-to-face encounter restriction to allow physicians and non-physician practitioners to perform the face-to-face encounter, regardless of whether they are the certifying physician or previously cared for the patient.
- Updating the HH quality reporting program (QRP) to remove the measure that assesses the percentage of patients receiving COVID-19 vaccinations and the corresponding outcome and assessment information set data element. The CMS is also removing four patient assessment data elements related to social drivers of health from the HH QRP. These measures include one living situation item, two food items and one utilities item.
- Adding four new measures to the HH value-based purchasing program, Medicare Spending per Beneficiary, and three measures assessing patient functional improvement in dressing and bathing.
- Adopting several new and revised provider enrollment provisions that the CMS believes will help reduce improper Medicare payments and protect beneficiaries.
The MHA will provide members with an updated impact analysis in the next several weeks. Members with questions should contact Vickie Kunz at the MHA.