Calendar Year (CY) 2027 Home Health Prospective Payment System Final Rule - CMS-1844-F

On November 4, 2026, CMS issued the CY 2027 Home Health Prospective Payment System Final Rule (CMS-1844-F), updating Medicare payment policies for home health agencies (HHAs) for calendar year 2027. CMS finalized a home health payment update of 2.1%, representing a $365 million increase, plus an estimated 0.3% increase reflecting the updated fixed-dollar loss (FDL) amount of $50 million, for an aggregate estimated net increase of 2.4%, or $415 million, compared to CY 2026. The final FDL ratio for CY 2027 is set at 0.29%, calibrated so outlier payments do not exceed 2.5% of total payments as required by section 1895(b)(5)(A) of the Social Security Act. CMS also finalized recalibrated PDGM case-mix weights, LUPA thresholds, functional impairment levels, and comorbidity adjustment subgroups using CY 2025 data. The final rule implements a temporary payment adjustment of -3.0% to the CY 2027 national standardized payment rate, continuing recoupment of retrospective overpayments made for CYs 2020 through 2025 arising from the difference between assumed and actual behavior changes under the PDGM and 30-day unit of payment, as required by section 1895(b)(3)(D)(ii) of the Social Security Act. CMS did not finalize an additional permanent adjustment to the CY 2027 30-day base payment rate, citing confounding factors beginning in CY 2023 including OASIS-E changes and prior payment rate reductions. Prior permanent adjustments finalized in earlier rules total -7.85% (half implemented in CY 2023), plus -5.779% (half in CY 2024), plus -3.95% (half in CY 2025), plus a remaining -1.023% applied in CY 2026. The rule amends 42 CFR 414.202 to implement Section 6222(a) of the Consolidated Appropriations Act, 2026 (CAA, 2026), expanding the Medicare Part B DME benefit to cover certain external infusion pumps and associated home infusion drugs that do not meet the standard "appropriate for use in the home" requirement, provided the FDA-approved prescribing information requires administration by or under the supervision of a healthcare professional, a qualified home infusion therapy supplier administers or supervises administration, and the drug is infused at least 12 times per year intravenously or subcutaneously or at infusion rates requiring an external pump. This DME expansion takes effect April 1, 2027. On provider enrollment, CMS finalized a policy making all Medicare enrollment revocation grounds retroactive to the date of noncompliance, replacing the existing prospective 30-day notice framework for certain revocation categories. New and expanded grounds for revocation or denial include: a requirement that hospices, HHAs, and DMEPOS suppliers reenroll and undergo survey or accreditation following certain changes in majority ownership; and expansion of the suspension or revocation basis to include license suspensions or program exclusions affecting owners and managing employees or organizations, not only the provider entity itself. The rule also addresses DMEPOS replacement items, clarifying that a new comprehensive face-to-face examination is not required when furnishing a replacement item described by the same HCPCS code, though documentation from the original encounter must be available upon audit under 42 C.F.R. 410.38.