The Centers for Medicare & Medicaid Services (CMS) has unveiled its proposed Home Health Prospective Payment System (PPS) rule for the 2027 calendar year (CY), combining tougher enforcement targeting fraud with payment increases and policy changes designed to strengthen access to home health services. The proposal reflects a dual focus: protecting the Medicare Trust Fund while supporting providers delivering high-quality care in patients’ homes.
For home health agencies, the proposed rule offers encouraging news in the form of higher reimbursement, greater recognition of palliative care services, and faster public reporting of quality data. At the same time, CMS is seeking broader authority to remove bad actors from the Medicare program and recover improper payments, reinforcing its ongoing commitment to program integrity.
Payment Increase Supports Growing Demand
CMS estimates that total Medicare payments to home health agencies would increase by approximately 2.4 percent in CY 2027: roughly $420 million more than projected payments for 2026. The proposed update continues the agency’s statutory transition to the Patient-Driven Groupings Model (PDGM) while maintaining budget neutrality.
The increase comes as demand for home-based healthcare continues to grow, driven by an aging population, rising chronic disease prevalence, and patient preference for receiving care at home, whenever possible.
For providers facing workforce shortages, rising operational costs, and increasing patient acuity, the proposed payment update offers meaningful financial support while reinforcing Medicare’s investment in home-based care.
Stronger Tools to Protect Medicare
A central component of the proposal focuses on strengthening Medicare program integrity.
CMS estimates that the new enrollment and oversight provisions would generate approximately $82 million in annual savings by improving the agency’s ability to identify noncompliant providers, recover improper payments, and prevent fraud before it affects beneficiaries and taxpayers.
Among the most significant changes is a proposal allowing CMS to recover Medicare payments retroactive to the date of noncompliance for all provider enrollment revocations, regardless of the specific reason for revocation. Currently, this authority applies only to certain revocation categories. “These proposals would give CMS stronger tools to protect Medicare beneficiaries and taxpayer dollars from fraud, waste, and abuse,” CMS Administrator Dr. Mehmet Oz said in a statement. “The Trump Administration is committed to ensuring only qualified providers and suppliers participate in Medicare while preserving access to high-quality care for patients across the country.”
Importantly, although these enrollment provisions appear within the Home Health PPS proposed rule, they would apply across Medicare provider and supplier types, not solely home health agencies.
Expanded Authority to Address High-Risk Providers
CMS is also proposing several new provider enrollment authorities aimed at preventing fraudulent activity before it occurs.
Under the proposal, CMS could revoke Medicare enrollment when a provider or supplier operates in a geographic area determined to present a high risk for fraud, waste, and abuse due to an excessive concentration of providers.
Additionally, CMS would have expanded authority to deny or revoke enrollment for providers or suppliers convicted within the previous 10 years of misdemeanor offenses involving sexual assault or financial misconduct.
The agency says it believes these changes would strengthen beneficiary protections while ensuring greater accountability among Medicare participants.
Greater Recognition of Palliative Care
Another notable aspect of the proposal is CMS’s effort to encourage broader use of community-based palliative care within the Medicare home health benefit.
CMS noted that eligible beneficiaries with serious illnesses may already receive skilled palliative care services under existing Medicare home health coverage when clinical criteria are met. The agency emphasized that palliative care is distinct from hospice services, and can be delivered much earlier during the course of a serious illness.
To further encourage utilization, CMS plans to issue additional sub-regulatory guidance following publication of the final rule, including expanded examples of skilled palliative care services that qualify under the Medicare home health benefit.
For providers, the clarification may create greater confidence in appropriately incorporating palliative care into care plans while helping patients remain safely at home.
Faster Quality Reporting Benefits Patients and Providers
CMS is also proposing to significantly accelerate public reporting of home health quality data.
Currently, Outcome and Assessment Information Set (OASIS) submissions are due within approximately 4.5 months. Under the proposed rule, agencies would instead submit data within 45 days.
CMS estimates that the change would allow publicly reported quality information to become available up to three months sooner, giving Medicare beneficiaries and their families more timely information when selecting a home health provider.
For agencies with strong quality performance, more current reporting may also provide an opportunity to demonstrate care excellence more quickly.
Additional Policy Updates
The proposed rule also includes updates affecting several other Medicare programs and services, including:
- Durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS);
- Home Health Quality Reporting Program requirements;
- Hospice policies; and
- Medicare provider enrollment processes.
These updates continue CMS’s broader efforts to modernize Medicare oversight while supporting access to high-quality, community-based care.
Looking Ahead
While the CY 2027 Home Health PPS rule remains in the proposal stage, it signals CMS’s ongoing strategy of pairing stronger enforcement with targeted investments in patient care.
For compliant providers, the proposal offers positive developments through increased reimbursement, clearer recognition of palliative care services, and improvements in quality reporting. Meanwhile, enhanced enrollment oversight and expanded recovery authorities underscore the agency’s proclaimed commitment to protecting Medicare resources and maintaining public trust.
Home health providers should closely review the proposed rule and prepare for potential operational, compliance, and documentation changes ahead of the final rule’s publication later this year.
