Breaking Down the CY 2027 Home Health Proposed Rule: What Oregon Providers Need to Knowby Jamie Daugherty, Executive Director On July 1, CMS released the CY 2027 Home Health Prospective Payment System (HH PPS) Proposed Rule, outlining how Medicare intends to pay home health agencies beginning January 1, 2027. After several years of significant payment reductions and uncertainty, this year's proposal contains a mix of encouraging news, continued financial pressure, and several important policy changes that every Oregon home health leader should understand. While nothing is final yet, now is the time to evaluate how these proposals could affect your agency—and to speak up during the public comment period. The Headline: A Proposed 2.4% Payment Increase The first number grabbing headlines is a 2.4% aggregate payment increase for Medicare home health agencies, representing approximately $420 million nationwide. That sounds like welcome news—and compared to recent years, it certainly is. However, the story is more complicated. The proposed increase includes:
CMS also chose not to implement an additional permanent behavioral adjustment for CY 2027, instead continuing to study more recent utilization data before making future permanent reductions. Many provider organizations had urged CMS to avoid another permanent cut, making this one of the more positive aspects of the proposal. PDGM Continues to Evolve Beyond the overall payment update, CMS is proposing its annual recalibration of the Patient-Driven Groupings Model (PDGM). The proposal updates:
These changes use the latest claims data and may affect agencies differently depending on their patient population and visit patterns. Even if the national payment update appears positive, an individual agency's reimbursement could increase or decrease depending on its case mix. Recommendation for Oregon agencies: Run payment modeling early. Do not assume your reimbursement will increase simply because CMS announced a positive overall payment update. No Major Changes to HHVBP—For Now Many providers expected significant revisions to the expanded Home Health Value-Based Purchasing (HHVBP) Model. Instead, CMS is not proposing any direct HHVBP policy changes in this rule. However, CMS discusses future opportunities to better align HHVBP with the Home Health Quality Reporting Program (HHQRP), suggesting additional changes could come in future rulemaking. For agencies already performing well under HHVBP, the message remains the same: Continue investing in quality outcomes, patient satisfaction, and hospitalization reduction. Quality Reporting Changes CMS is proposing several updates to the Home Health Quality Reporting Program (HHQRP), including revised deadlines for OASIS data submission and corrections. The agency is also requesting feedback on future quality concepts such as advanced care planning and additional measures appropriate for home health. Although these changes may appear administrative, timely and accurate reporting remains essential to avoiding payment penalties. Program Integrity Takes Center Stage Perhaps the biggest surprise in this rule has little to do with payment. CMS is proposing several Medicare enrollment changes designed to reduce fraud, waste, and abuse across Medicare. Among the proposals:
While these proposals apply broadly across Medicare providers—not just home health—they reinforce CMS's continued focus on program integrity. For legitimate Oregon providers, these changes highlight the importance of maintaining:
Why This Matters in Oregon Many Oregon agencies continue to operate with:
A modest national payment increase may not fully offset these realities. At the same time, avoiding another permanent PDGM behavioral adjustment provides some welcome stability after several difficult years. For Oregon's rural providers especially, every percentage point matters. OAHC Will Be Reviewing the Rule Over the coming weeks, OAHC will be reviewing the proposed rule in greater detail and identifying provisions that deserve comment from Oregon providers. We encourage members to:
The public comment period is one of the few opportunities providers have to influence federal policy before it becomes final. Final Thoughts This year's proposed rule is more balanced than many providers expected. The absence of another permanent behavioral adjustment is encouraging. The proposed payment update is positive. Yet significant operational and compliance changes remain under consideration. As always, the details matter more than the headlines. Oregon agencies should use the next several weeks to understand how these proposals affect their organizations and ensure our state's voice is heard before the rule is finalized. At OAHC, we'll continue monitoring the proposal and advocating for policies that preserve access to high-quality home health care throughout Oregon. |