Cms Proposes 2.4% Home Health Medicare Payment Increase For 2027

The Centers for Medicare & Medicaid Services (CMS) released its CY 2027 home health proposed payment rule on Monday.

The rule proposes an aggregate payment increase of 2.4%, or $420 million, representing a significant change from years past, which have included aggregate cuts to Medicare home health payments.

The increase consists of a 2.1% payment update, representing $370 million, and a 0.3% increase related to the Fixed Dollar Loss (FDL) ratio.

CMS also did not propose an additional permanent adjustment to the CY 2027 30-day base payment rate. The agency said it will continue to analyze claims data through CY 2026, as required by law, to determine whether any future permanent adjustments are needed to account for the impact of the Patient-Driven Groupings Model (PDGM).

“This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures because of the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment,” the CMS fact sheet read.

While not proposing a new permanent adjustment, CMS proposed a temporary adjustment of -3% to the 2027 national, standardized payment rate.

“This proposal would continue recoupment of the retrospective overpayments made for CYs 2020 through 2025 through “one or more” temporary adjustments,” the fact sheet read. “We believe that continuing to incrementally adjust the base payment rate to account for the calculated temporary dollar amount to date may help reduce the need for a large reduction in future years.”

Fraud action items

The payment rule also includes new policies aimed at rooting out fraud in the home health sector, policies that affect any providers and suppliers participating in the Medicare program. 

The fraud-focused proposals include a shift to retroactive revocations and the addition or expansion of bases for revocation or denial. 

Currently, certain Medicare enrollment revocations take effect prospectively, meaning they take effect 30 days after CMS or its contractor mails notice of the revocation to the provider. Going forward, CMS proposes to make all revocation grounds retroactive.

“This action would help CMS recover monies paid to non-compliant providers and help ensure taxpayer money is paid only to legitimate, compliant providers,” the fact sheet read.

In addition to making revocations retroactive, CMS proposed to add several new grounds for revocation or enrollment denial and expand some existing grounds. These include changes in majority ownership, meaning that home health agencies, hospices and suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) must reenroll in Medicare as a new provider and undergo a survey or accreditation if they experience certain changes in majority ownership. Providers’ enrollment could be denied or revoked if they violate this requirement, CMS said.

CMS currently can deny or revoke enrollment if a provider has a suspended or revoked license in another state or is suspended or revoked from Medicaid or another federal healthcare program. The agency proposes to expand this capability to include similar suspensions or revocations involving the provider’s owners or managing employees and organizations.

“The proposed revocation/denial authorities would address situations noted by CMS as involving provider noncompliance and fraud, waste, and abuse,” the fact sheet read. “They also would allow the agency to target improper activity by those who own or operate providers.”

This story is developing. Check back for more information as it becomes available.

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