CMS finalized its Home Health Prospective Payment System final rule Nov. 4, including a 2.4% home health payment boost for 2027.
The rule also includes stricter Medicare provider enrollment provisions as the federal government continues to target alleged fraud, waste and abuse in the healthcare system.
Here are eight things to know:
- CMS estimates that, in aggregate, Medicare payments to home health agencies will increase by 2.4% in 2027, up $415 million from 2026.
- CMS is continuing a 3% temporary adjustment to collect earlier overpayments. That 3% adjustment will allow the agency to recoup about $500 million of the $4.9 billion CMS said it is owed from 2020 through 2025. Other adjustments could come with future rulemaking.
- CMS is updating the payment weights for each of the 432 patient categories in Medicare’s Patient-Driven Groupings Model based on 2025 claims.
- In 2027, the fixed-dollar loss ratio, which is used to set the threshold for outlier payments for unusually high-cost care, will be 0.29. Outlier payments are made when the care’s estimated costs surpass that threshold. The ratio was previously set at 0.37.
- CMS is expanding how it can retroactively recoup payments to providers with revoked Medicare enrollment.
- CMS can deny or revoke Medicare enrollment for home health, hospice, and durable medical equipment, prosthetics, orthotics, and supplies businesses sold within 36 months if they do not enroll as a new provider and go through accreditation or a state survey.
- DMEPOS suppliers and independent diagnostic testing facilities are already required to install permanent visible signage showing their hours of operation. CMS is expanding that requirement to all Medicare providers and suppliers. CMS expects $15.6 million in annual compliance costs as this requirement kicks in.
- Beginning in April, Medicare Part B will cover certain infusion pumps and their paired home infusion drugs, allowing patients to access some drugs at home under certain circumstances. CMS is expecting about $800,000 in annual net savings.
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