Home Health Rule: 2.4% payment update finalized for 2027

Home health agencies will see a rate increase in 2027, even though CMS finalized a temporary adjustment that will eat into the base payment rate for another year.  

 

Details of the payment update were released late Wednesday in the 2027 Home Health Prospective Payment System (HHPPS) Final Rule. CMS also finalized new fraud enforcement measures.   

 

The rule calls for an aggregate payment increase of 2.4%, or $415 million, effective Jan. 1, 2027. The is unchanged from what was proposed in the summer. 

 

CMS is also finalizing a 3.0% temporary reduction to the 2027 base payment rate. This is similar to a 3.0% temporary cut in the 2026 base payment rate. This is an effort to claw back a portion of $4.9 billion that CMS says was overpaid in the first few years of PDGM.  

 

The rule also recalibrates case-mix weights and updates the low-utilization payment adjustment (LUPA) thresholds, functional impairment levels and comorbidity adjustment subgroups, as well as the home health wage index. 

 

There are no new measures included in the Home Health Quality Reporting Program, but changes to reporting deadlines still may impact your scores and payment.  

 

Through this rule, CMS is also finalizing tough new regulations around provider revocations and reimbursement.    

 

This includes provisions that allow CMS to claw back all payments retroactive to the date of noncompliance, regardless of the reason for the provider’s enrollment revocation. CMS is also expanding the reasons for revocation or denial.