TMWhat to Watch in the Home Health Final Rule for 2027
The CY 2027 home health final rule is the next big payment decision on the calendar, and agencies have good reason to watch it closely. CMS proposed a 2.1% payment update for 2027, which works out to an estimated 2.4% net increase, or about $420 million. That sounds like welcome news after last year's proposed cut. But the same rule would keep a temporary 3.0% reduction to the 30-day base rate, aimed at recovering what CMS calls past overpayments tied to the shift to PDGM. CMS estimates that cut alone would recoup about $500 million in 2027.
What the home health final rule could still change
The comment period closed August 31, and the policies would take effect January 1, 2027 if finalized. Industry groups pushed hard on the temporary adjustment. The National Alliance for Care at Home and LeadingAge urged CMS to withdraw the 3% cut, and the Alliance pointed out that permanent PDGM reductions have already lowered the 30-day rate by 9.37%. The AHA asked CMS to suspend further budget neutrality reductions and revisit the method behind them. One point most commenters welcomed: CMS did not propose a new permanent adjustment this year, saying behavior changes since 2023 are better explained by other factors such as OASIS-E and case-mix recalibration.
Why the headline number is not your number
A net increase in aggregate does not mean every agency sees more cash. Your actual result depends on your wage index, your patient mix, and how the temporary cut lands on your base rate. Analysts are advising agencies to build a budget that layers the update, local wage index changes, and the 3% recoupment, then test it against realistic volume. If the final rule moves any of those numbers, you want a model you can update in an afternoon, not a spreadsheet you rebuild from scratch.
Practical steps while you wait
Start with what you control. Know how many 30-day periods you expect to bill next year, and how reliably planned visits turn into completed, documented visits. Missed or late visits quietly erode revenue no matter where the base rate ends up. Teams using CareSync® often keep a simple weekly view of planned versus completed visits so gaps surface early, before they show up in a claim. Whatever tool you use, that visibility makes rate changes easier to absorb.
When the final rule drops, likely in the next several weeks, compare it line by line with the proposal: the update percentage, the temporary adjustment, and any wage index changes. Then rerun your model and share the result with clinical and scheduling leads, not just finance. Payment policy is set in Washington, but how well an agency weathers it is decided on the schedule board.
Sources: CMS CY 2027 HH PPS Proposed Rule Fact Sheet (CMS-1844-P); Home Health Care News, "What Comments Reveal About CMS' Proposed Medicare Home Health Rule" (September 2026); Pease Bell, "Home Health CY2027 Proposed Rule: PDGM Clawback and Payment Impact" (October 5, 2026).