The Centers for Medicare and Medicaid Services released on Wednesday afternoon its 2027 proposed payment rule for home health agencies.
The rule includes an aggregate payment increase of $420 million, or 2.4%, based on a proposed 2.1% payment update and an estimated 0.3% increase related to the fixed dollar loss ratio. That 2.1% payment update represents $370 million, according to a CMS fact sheet.
The proposal also includes updates to payment methodologies, case-mix weights, outlier payments and quality reporting requirements, while seeking feedback on expanding access to home-based palliative care.
Beyond payment policy, CMS is proposing a series of anti-fraud measures that would make all Medicare enrollment revocations retroactive and broaden the agency’s authority to deny or revoke enrollment for providers and suppliers linked to compliance violations.
The proposed rule pitches strict new measures to combat Medicare fraud and improper payments, a key priority of CMS under the Trump administration. During Trump's second term, CMS is aggressively tackling fraud, waste, and abuse in the home health and hospice sectors.
In May, the Trump administration issued a six-month moratorium on hospice and home health agencies enrolling in Medicare as part of its efforts to combat fraud. CMS said the "data-driven" decision targets a key source of fraud activity. It followed a similar announcement made earlier this year of a moratorium on durable medical equipment, prosthetics, orthotics and supplies companies.
The Calendar Year (CY) 2027 Home Health Prospective Payment System (PPS) proposed rule (PDF) includes changes aimed at strengthening CMS’ ability to recover improper payments and remove noncompliant providers and suppliers from Medicare, according to a CMS press release.
The agency estimates that these actions will save approximately $82 million in annual savings, while also expanding access for patients receiving care at home and improving the timeliness of publicly reported home health agency quality information.
Although included in the CY 2027 Home Health PPS proposed rule, the provider enrollment provisions would affect any providers and suppliers participating in the Medicare program, CMS noted.
“These proposals would give CMS stronger tools to protect Medicare beneficiaries and taxpayer dollars from fraud, waste, and abuse,” CMS Administrator Mehmet Oz, M.D., 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.”
Currently, CMS can claw back payments retroactive to the date of noncompliance for certain Medicare provider enrollment revocation grounds.
The proposed rule would make this possible for all Medicare provider enrollment revocations, regardless of the revocation reason. This would allow CMS to recoup additional taxpayer funds and help ensure that noncompliant providers and suppliers are not receiving Medicare payments.
In addition, CMS also wants to add several new grounds for revocation or denial of enrollment and broaden existing authorities. Under the proposed changes, CMS could revoke a provider’s or supplier’s Medicare enrollment if the enrollment presents a high risk of fraud, waste, and abuse because the provider or supplier is located within a limited geographic area that has an excessive number of providers and suppliers, according to the proposed rule.
CMS could deny or revoke a provider’s or supplier’s Medicare enrollment if they have been convicted of a misdemeanor related to sexual assault or financial misconduct within the past 10 years.
Hospices home health agencies and suppliers of durable medical equipment, prosthetics, orthotics and supplies must reenroll in Medicare as a new provider and undergo a survey and accreditation if there are changes in majority ownership. In the draft rule, CMS is proposing to deny or revoke enrollment if this requirement is violated.
In the proposed rule, CMS also is seeking to promote access to and use of community-based palliative care services. The agency is seeking comments on how to best promote access to community-based palliative care services through existing Medicare benefits, including the Medicare home health benefit. CMS said it will provide examples of palliative care through sub-regulatory guidance.
To improve transparency for patients and families, CMS also is proposing to shorten the Outcome and Assessment Information Set data submission deadline from 4.5 months to 45 days, giving people with Medicare more timely information to make informed care decisions. CMS estimates the proposal could make publicly reported quality information available up to three months sooner.
The proposed rule also include updates related to durable medical equipment, prosthetics, orthotics, and supplies, the home health quality reporting program, hospices and the Medicare provider enrollment process.