The Centers for Medicare & Medicaid Services (CMS), part of the Department of Health and Human Services (HHS), published a proposed rule on July 6, 2026 setting Calendar Year (CY) 2027 payment rate updates for the Home Health Prospective Payment System (HH PPS). The rule is docketed under regulation identifier number (RIN) 0938-AV80, and CMS is accepting public comments through August 31, 2026.

For home health agencies, durable medical equipment (DME) suppliers, and the contractors that support Medicare program administration, the proposal is a routine but consequential annual rate-setting action. It also carries several policy changes beyond the base rate update that touch provider enrollment and equipment sourcing rules.

According to the proposed rule text, CMS is proposing a temporary behavior adjustment and a recalibration of case-mix weights, functional impairment levels, comorbidity subgroups, and low-utilization payment adjustment (LUPA) thresholds for CY 2027. The rule also discusses coverage of home health palliative care services and includes a request for information (RFI) on a home-health-specific wage index. Separately, CMS proposes changes to the Home Health Quality Reporting Program (HH QRP) aimed at improving alignment with the expanded Home Health Value-Based Purchasing (HHVBP) Model.

On the durable medical equipment side, the rule proposes to clarify how face-to-face encounter requirements apply to DMEPOS item replacements, updates provider and supplier enrollment requirements, addresses DME benefit expansion for infusion pumps and drugs, and proposes changes to information-collection requirements under the DMEPOS Competitive Bidding Program (CBP) related to country-of-origin reporting.

Contractors and providers affected by HH PPS rates or the DMEPOS Competitive Bidding Program have until August 31, 2026 to submit comments before CMS finalizes the rule later this year.

Source: Federal Register