On June 30, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that aims to cut Medicare home health payments by an estimated 6.4%, or $1.13 billion, in 2026. The rule also proposes changes in provider enrollment and DMEPOS accrediting.
Home Health Payment Update: This is the fourth year in which CMS has proposed payment reductions in home health. The proposed rule includes a 3.2% decrease to the market basket. However, CMS also proposes the following reductions:
- 8% cut for productivity.
- 1% permanent reduction to the standard payment rate to prevent future overpayments.
- Temporary 5% reduction to recoup past overpayments.
- 5% reduction related to high-cost outlier payments.
CMS argues that some of these reductions are necessary to achieve budget neutral implementation of the Patient-Driven Groupings Model.
Home Health Quality Reporting and Related Issues: CMS proposes to remove the measure for the Home Health Quality Reporting Program (HHQRP) that assesses the percentage of patients receiving COVID-19 vaccinations. The agency also would remove four standardized patient assessment data elements focused on living situation, food and utilities.
The rule includes requests for information on changing the data submission deadline for HHQRP data, advancing digital quality measures and adding new measure concepts for the HHQRP.
CMS would revise the Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) survey beginning with the April 2026 sample month.
Specifically, CMS proposes to remove three measures that are currently used in the expanded HHVBP model: care of patients, communications between providers and patients and specific care issues. It also proposes to add four measures to the applicable measure set, including: three OASIS-based measures relating to bathing and dressing, one claims-based measure and the Medicare Spending per Beneficiary for the Post-Acute Care (PAC) setting measure.
Changes to the Face-to-Face Encounter Policy: CMS would also change the face-to-face encounter policy. The proposed rule would allow physicians to perform face-to-face encounters regardless of whether the physician is the certifying practitioner or whether they cared for the patient in the facility from which the patient was referred.
Provider Enrollment Issues: It would also add reasons for Medicare provider revocation or deactivation. This change would allow CMS to amend its regulations to revoke providers when beneficiaries say a provider did not provide the services they claimed. It would also allow CMS to deactivate providers’ Medicare billing practices when enrolled physicians and practitioners have not ordered or certified services for 12 consecutive months, which CMS said leaves billing numbers “vulnerable to use by bad actors.”
Durable Medical Equipment, Prosthetic Devices, Prosthetics, Orthotics, & Supplies (DMEPOS) Accreditation: Currently DMEPOS suppliers must be accredited by a CMS approved accrediting organization to enroll in and bill Medicare. CMS is concerned because the original accreditation regulations have not been updated since 2006 and program integrity vulnerabilities have increased. Therefore, CMS is proposing:
- DMEPOS suppliers be resurveyed and accredited annually instead of the current three years.
- Stricter requirements for becoming and remaining a DMEPOS accrediting organization (AO)
- Increase the amount, specificity and frequency of data that AOs must submit to CMS.
- Expand CMS’ ability to closely monitor and review AOs’ operations.
- Strengthen CMS’ ability to act against poorly performing AOs.
DMEPOS Prior Authorization: CMS is also proposing “additional specificity for the DMEPOS prior authorization exemption process” based on its hospital outpatient department prior authorization program. Under the proposal, suppliers achieving a target approval rate of 90% be offered an exemption from required prior authorization. To determine supplier eligibility for continued exemption, the DME Medicare Administrative Contractors (MACs) would complete a post payment medical review sample. From this claim sample, suppliers must again meet a claim approval rate of 90% or greater to continue their exemption. Suppliers who did not meet the compliance rate threshold must continue submitting prior authorization requests as required.
Proposed Improvements to the DMEPOS Competitive Bidding Program: CMS teases that a future announcement will propose improvements to the DMEPOS Competitive Bidding Program. CMS did not announce what product categories it will include nor was a time frame announced.
Continuous Glucose Monitors and Insulin Pumps: Additionally, CMS is proposing that all continuous glucose monitors and infusion pumps be reclassified under the frequent and substantial servicing payment category so Medicare beneficiaries will have access to current fully supported technology that meets evolving safety and performance standards rather than facing delays in access.
For additional information: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-home-health-prospective-payment-system-proposed-rule-fact-sheet-cms-1828-p#:~:text=https%3A//www.federalregister.gov/d/2025%2D12347.
