Cms Home Health Proposed Rule: What Providers Need To Know Beyond The 6.4% Rate Cut

While the home health industry has been laser-focused on the Centers for Medicare and Medicaid Services (CMS) CY 2026 home health proposed rule rate cuts of 6.4% or a $1.135 billion reduction in spending, several other pieces of the proposed rule deserve additional attention, and include a silver lining.

Providers should keep in mind that the rate cuts included in the CMS final rule are usually about half of what is proposed, and advocacy work can help to make change, according to Brian Harris, vice president of financial consulting at SimiTree.

However, Harris said, regardless of the final rule, the cuts are “disheartening” during a webinar on Tuesday.

“CMS has proposed these permanent adjustments every year in the proposed rule, and then, ultimately, especially in the last three rulemaking years, cut it in half come time for the final rule,” Harris commented. “It’s important to note that even if they take a similar approach this year, it’s likely still going to result in an overall decrease in spending. We’re looking at just a 4.059% rate reduction specifically to this permanent adjustment factor. That doesn’t even count in some of the other pieces that we are looking at.”

Harris noted that 2026 is the first year Medicaid will implement clawbacks, in which they feel they overpaid Medicaid claims. These temporary adjustments amount to slightly more than $5.3 billion. Home health providers should expect to see these adjustments implemented throughout the 2028 rulemaking period, according to Harris.

According to SimiTree, a positive aspect of the proposed final rule is that the national per-visit rates for CY2026 for home health aides have risen slightly from CY2025, increasing from $78.20 to $80.11.

The most notable hourly rate increase occurs in speech-language pathology, which has gone from $205.22 to $210.23.

Additionally, wage index changes present a favorable update. In urban areas, the average proposed increase is 0.34%, while in rural areas, it is 0.13%. Harris cautioned that providers who do not submit quality data would face a 2% penalty.

For rural providers, Montana’s proposed wage increase is the largest, at 18.48%. Washington state has the lowest projected rise at 4%. The Virgin Islands, Idaho, Puerto Rico, Connecticut and Tennessee are all facing a uniform decrease of 5%, based on CY2026 PDGM case mix weights and low utilization payment adjustment (LUPA) thresholds.

These proposed rates vary: in Santa Fe, New Mexico, home health aides will see a 1.5% decrease from 2025 to 2026, with hourly rates dropping from $82.52 to $81.32. Conversely, in Reading, Pennsylvania, aides will experience a 9.1% increase, with rates rising from $74.75 to $81.57.

Additional changes

What experts say may be one of the biggest ‘wins’ for providers is the proposed change to face-to-face encounters because it simplifies and “untangles” the requirements that have increased over the years.

Currently, CMS permits nonphysician practitioners to perform the required face-to-face encounter regardless of whether they were the certifying practitioners or previously cared for the patient. However, if a physician conducted the encounter, they had to be the certifying physician or have previously cared for the patient. CMS proposes to remove this restriction, allowing physicians to perform the encounter regardless of whether they are the certifying physician or have previously cared for the patient.

“We still need to see that collaboration piece, just like we do from the hospital to physician,” J’non Griffin, senior vice president at SimiTree, told Home Health Care News. “But with this change, it’s pretty much saying that anybody, if they’re somehow related, can do a referral now. It makes things a lot easier for agencies. I do think that this will go through because the [Medicare Administrative Contractors] MACS have already adopted it.”

Additionally, CMS proposed removing the measure that assesses the percentage of patients receiving COVID-19 vaccinations from the home health quality reporting program (HHQRP). The proposal also requests information on changing the data submission deadline for HHQRP data, advancing digital quality measures and new measure concepts for the HHQRP.

Four new measures may also be added to the home health value-based purchasing program: Medicare spending per beneficiary and three measures assessing patient functional improvement in dressing and bathing.

Finally, new and updated provider enrollment rules have been proposed to reduce improper payments, including the temporary revocation of a provider’s Medicare enrollment, such as if the beneficiary attests that the provider did not deliver the claimed service. CMS also proposed to deactivate a physician’s or practitioner’s billing privileges if they have not ordered or certified services for 12 consecutive months.

How to prepare

Providers should start preparing for these CY2026 changes by focusing on coding and OASIS to maximize reimbursement, according to Harris. They should also assess the actual financial impact of the proposed cuts on each of their locations, considering factors outside of the universal 6.4%.

Invested parties should also analyze the data and share their perspectives, Harris said, emphasizing the importance of advocacy work to soften the blow of the proposed final rule. However, he cautioned that even with advocacy work, providers can still expect to see an overall decrease in spending.

“History has shown that CMS has dialed back a little bit in the final rule compared to the proposed rule. That only happens through advocacy. It’s not something where we can sit around and just expect CMS to do this,” Harris said. “Advocacy between now and I believe, August 30, 60 days from when the rule came out, is going to be crucial to get CMS to dial back and fully understand the impact that this 6.4% spending decrease is going to have on agencies.”

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