On November 28, 2025, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating policies under the Home Health Prospective Payment System (HH PPS) for the calendar year 2026. The changes include a payment update and adjustments to ensure alignment with patient care needs.
The rule outlines a net decrease of 1.3% in Medicare payments to home health agencies (HHAs) compared to 2025, amounting to an estimated $220 million reduction. This adjustment results from various factors, including a permanent prospective adjustment of -1.023% and a temporary adjustment of -3.0% due to behavior changes related to the Patient-Driven Groupings Model (PDGM).
The PDGM, implemented in January 2020, aligns payments with patient care needs and requires CMS to adjust rates based on actual versus assumed behavior changes. CMS will continue evaluating these impacts through claims data until 2026.
CMS is also revising face-to-face encounter policies, allowing physicians alongside nurse practitioners, certified nurse specialists, and physician assistants to perform these encounters as per the CARES Act.
Changes are also being made to the Home Health Quality Reporting Program (HHQRP), including removing certain assessment items and updating survey methodologies beginning April 2026.
In efforts to prevent fraud and abuse, CMS is implementing new provider enrollment provisions. These include expanding grounds for retroactive revocation of Medicare enrollment and enhancing scrutiny over Durable Medical Equipment suppliers through more frequent surveys and stricter accreditation requirements.
For more details on these updates, visit CMS's official resources: [Home Health Prospective Payment System](https://www.cms.gov/medicare/medicare-fee-for-service-payment/homehealthpps), [Patient-Driven Groupings Model](https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/HH-PDGM), or access the final rule via the [Federal Register](https://www.federalregister.gov/public-inspection/current).
Information from this article can be found here.
