What Happened?

If you run a home health agency, Medicare home health payments will rise by a net $415 million in 2027, or 2.4 percent above the updated 2026 projection. ​

The Department of Health and Human Services issued the final rule on Monday, according to a Legis1 review of the Federal Register notice. The Centers for Medicare & Medicaid Services (CMS) wrote the payment details.

  • Payment update: Rates for 30-day payment periods and per-visit payments rise 2.1 percent, but agencies that skip required quality reporting get 0.1 percent.
  • Temporary cut: A 3 percent reduction applies to the 2027 base rate, and CMS says its net effect in 2027 is zero because the 2026 rate carried the same cut.
  • Permanent adjustment: CMS calculated an illustrative 3.793 percent for 2027, saying 2023 through 2025 data cannot be pinned solely on the 30-day payment period.
  • Total spending: CMS estimates about $17.8 billion in 2027 home health payments.

Why Does it Matter to Me?

The rule reaches beyond agencies to Medicare patients receiving home health care and to suppliers of medical equipment, prosthetics, and orthotics.

If you use an external infusion pump at home, the equipment no longer has to be "appropriate for use in the home" when a qualified home infusion supplier provides the drug under a health care professional's supervision. The drug must be infused at least 12 times a year. Replacement items also don't require a new face-to-face visit.

CMS also finalized four changes for providers enrolling in Medicare:

  • False information: Any enrollment-related form, not just the application, can trigger revocation.
  • Billing privileges: CMS dropped the listed factors for revoking billing rights for abuse and will use a "facts and circumstances" approach.
  • Retroactive dates: Revocation can reach back to when noncompliance began.
  • Reapplication bar: A bar of up to 10 years applies regardless of the reason for denial.

Both Sides, Now

HHS and CMS issued the rule, which CMS says federal law requires it to update each year. The Medicare Payment Advisory Commission (MedPAC) backed the temporary cut, saying the base rate "currently exceeds the estimated cost of a typical 30-day payment period by 34 percent."

Other commenters welcomed the increase but said the national figure "masks significant variation," citing labor shortages, wage inflation and transportation costs. CMS replied that its analysis does not aim to predict outcomes for individual agencies.

Critics of payment cuts point to access trends. The Commonwealth Fund reports that about 1,000 home health agencies closed between 2019 and 2024. MedPAC's March 2026 report is identified as reporting that visits per episode fell about 15 percent. Neither shows the 2027 rule caused those declines.

What Happens Next?

The payment and quality reporting rules take effect Jan. 1, 2027. Starting with the 2027 Home Health Quality Reporting Program, data deadlines move to the 15th day of the second month after each calendar quarter ends. The infusion pump exception starts April 1, 2027.

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