The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule updating the Home Health (HH) Prospective Payment System (PPS) for calendar year (CY) 2027.
Highlights of the proposed rule include:
- An updated 30-day standard episode payment rate of $2,092, up 2.65% from the current $2,038. The increase reflects a 3.1% market basket update, reduced by a 1-percentage-point productivity adjustment, continuation of the 3% cut for behavioral changes following implementation of the Patient-Driven Groupings Model (PDGM), and other adjustments. Providers who fail to submit quality data are subject to an additional 2-percentage-point reduction.
- A reduced fixed-dollar loss ratio of 0.29, down from 0.37, expected to increase outlier payments. CMS proposes maintaining the 0.8 loss-sharing ratio.
- Recalibration of relative weights for the PDGM using CY 2025 data.
- Several policy changes related to provider enrollment to help reduce improper Medicare payments, with the proposed changes affecting all providers and suppliers participating in the Medicare program, not only HH providers. The proposed rule would make revocations of Medicare enrollment retroactive and add several new grounds for revocation or denial of enrollment. Currently, CMS may deny or revoke enrollment if a provider has a suspended/revoked license in another state or is suspended/revoked from Medicaid or another federal healthcare program. The CMS proposes expanding this policy to include similar suspensions/revocations involving the provider’s owners or managing employees/organizations.
- Revised data submission deadlines for HH Quality Reporting Program (QRP) measure data from 4.5 months after the reporting quarter to no later than the 15th day of the second month after the end of the quarter, which equates to approximately 45 days after the end of the reporting quarter.
- A request for information on developing a HH-specific wage index from an alternative data source such as the Bureau of Labor Statistics.
The MHA will provide members with an estimated impact analysis in the next several weeks and encourages them to contact MHA health finance team regarding issues identified by Aug. 14. CMS will accept comments on the HH proposed rule until Aug. 31. Members with questions should contact the MHA health finance team.