TMMedPAC Opens a Home Health Payment Accuracy Study: What Agencies Should Know
Home health payment accuracy is about to get a long, careful look from the people who advise Congress on Medicare. At its October 9 public meeting, the Medicare Payment Advisory Commission (MedPAC) laid out a multi-year workplan to test whether the home health and skilled nursing facility payment systems actually pay in line with what it costs to care for different kinds of patients. For home health, that means the Patient-Driven Groupings Model (PDGM), the 30-day payment system Medicare adopted in 2020 when it stopped using therapy volume to set payments. Results are not expected until fall 2027, but the questions MedPAC is asking are worth understanding now.
What the home health payment accuracy study will examine
MedPAC staff framed the work around three questions. First, accuracy: do payments rise and fall with patients' actual costs? Second, patient selection: is there evidence that providers favor certain types of cases over others? Third, coding practices: has the way providers record patient assessment information raised payments without a matching change in how complex patients really are? The analysis will use Medicare claims, patient assessments, cost reports, and beneficiary enrollment files for each year from 2021 through 2025, and will report results by case-mix group, provider group, and beneficiary characteristics. According to McKnight's, the skilled nursing and home health payment systems together account for roughly $47 billion in Medicare spending each year.
A few details stand out for home health teams. MedPAC plans to calculate payment-to-cost ratios for each case-mix group and then check whether high-profit and low-profit groups are spread evenly across agencies. On coding, staff intend to compare how home health agencies coded a case with how the same patient was coded during the hospital stay that came before it, and to compare changes in assessment items that drive payment with items that do not. "This work is exploratory, but there have been concerns about patient selection in home health," MedPAC analyst Evan Christman said, as reported by Home Health Care News. He also noted that some stakeholders believe the system favors post-hospital patients over those admitted from the community.
Why it matters, and what commissioners pushed back on
Commissioners did not treat every mismatch as a red flag. They urged staff to account for local markets, staffing limits, and the geographic challenges that affect how often home health clinicians can reach patients, especially in rural areas. They also warned that a patient's function can look different at home than in a hospital bed, and staff clarified that the hospital comparison will focus on diagnostic coding rather than expecting functional and cognitive scores to match across settings. One commissioner, Kenny Kan, raised a newer concern: that some providers may already be using AI tools in coding and revenue cycle work in ways that push reported complexity beyond what patients' conditions warrant. All of this lands as CMS continues its own scrutiny of PDGM; Home Health Care News notes that the proposed CY2027 home health rule included a temporary adjustment tied to what CMS considers PDGM-related overpayments.
None of this requires a reaction today, but it is a good prompt for a quiet internal check. Does your OASIS documentation clearly support the diagnoses and functional scores you report, in a way a reviewer comparing it to hospital records could follow? Do you know your own mix of hospital-referred versus community-referred admissions, and could you explain the reasons behind referrals you decline? If you use automated coding suggestions, does a clinician still own and verify the final answer? And do visit records show that the care planned for each 30-day period was actually delivered? Keeping schedules and completed visits in one place, as CareSync® does, makes that last question easier to answer when someone asks. MedPAC's findings are still a year away, and agencies whose records already tell a clear, consistent story will be in the best position to respond to whatever they show.
Sources: MedPAC, "Workplan: Assessing the accuracy of the skilled nursing facility and home health prospective payment systems" (October 9, 2026 public meeting presentation); Home Health Care News, "MedPAC Launches PDGM Study Analyzing Home Health Payment Accuracy" (October 9, 2026); McKnight's Long-Term Care News, "MedPAC examines PDPM payment accuracy, patient selection" (October 11, 2026).