The Centers for Medicare & Medicaid Services (CMS) has released the Calendar Year (CY) 2026 Home Health Prospective Payment System (PPS) final rule, a wide-ranging regulation that updates Medicare home health payment rates and implements numerous policy, quality reporting, and program integrity changes. These regulations take effect on January 1, 2026.

• CMS Fact Sheet: 2026 Home Health Prospective Payment System Final Rule (CMS-1828-F)

While CMS originally proposed a significant permanent payment reduction of approximately $60 per 30-day period, the final rule instead adopts a much smaller — but still impactful — net decrease of approximately $19 per 30-day period, once all permanent, temporary, and technical adjustments are combined. This reflects CMS’s recalculation of assumed versus actual behavior changes under the Patient-Driven Groupings Model (PDGM) using updated 2024 data.

Overall, CMS estimates a $220 million (-1.3%) decrease in aggregate Medicare payments to home health agencies for CY 2026. These regulations are effective on January 1, 2026.

Key Provisions

Payment Rate & PDGM Adjustments

• A -1.023% permanent adjustment and a -3.0% temporary adjustment for CY 2026.
• Updated case-mix weights, functional impairment levels, comorbidity groupings, and Low-Utilization Payment Adjustment (LUPA) thresholds.
• The finalized reductions equal approximately $19 per 30-day period, substantially less than the originally proposed ~$60 cut.

Home Health Quality Reporting Program (HH QRP)

• Removal of the COVID-19 vaccination measure and four standardized patient assessment data elements.
• Implementation of a revised Home Health Consumer Assessment of Healthcare Providers and Systems (CAHPS®) survey beginning April 2026.
• Updated reconsideration and extraordinary-circumstance exception processes.

Home Health Value-Based Purchasing (HHVBP) Model

• Removal of three CAHPS®-based measures.
• Addition of four new measures, including the claims-based Medicare Spending per Beneficiary – Post-Acute Care (MSPB-PAC) measure and three OASIS-based self-care functional measures related to bathing and dressing.
• Revisions to weighting across measure categories.

Conditions of Participation (CoPs)

• Technical updates clarifying that OASIS reporting applies to all skilled patients, regardless of payer.

Provider Enrollment

• Expanded grounds for denial, revocation, and deactivation.
• Mandatory reporting of adverse legal actions shortened from 90 days to 30 days.
• Expanded authority for retroactive effective dates.

For a detailed breakdown of the final rule, click here to read the comprehensive analysis from the National Alliance for Care at Home.