CMS Finalizes Broad Medicare Integrity Changes in Home Health Final Rule; Expected to Save Taxpayers Tens of Millions of Dollars

CMS finalized the Calendar Year 2027 Home Health Prospective Payment System final rule (CMS-1844-F), published in the Federal Register at docket 2026-22750. The rule finalizes changes CMS estimates will save approximately $82 million annually by strengthening Medicare payment recovery authority and preventing high-risk providers from entering or remaining in the Medicare program. The central mechanism allows CMS to make Medicare enrollment revocations effective as of the date noncompliance began, enabling recovery of payments dating back to that point rather than only prospectively. The rule adds new grounds for denying or revoking Medicare enrollment, including certain misdemeanor convictions related to sexual assault or financial misconduct, and circumstances in which an enrollment presents a high risk of fraud, waste, and abuse due to an excessive concentration of providers and suppliers within a limited geographic area. These grounds apply across Medicare provider and supplier types, not exclusively home health agencies. The rule also establishes stricter requirements for hospices and home health agencies related to ownership changes and administrator qualifications. The rule addresses palliative care under Medicare's existing home health benefit, clarifying that skilled palliative care services, including pain and symptom management, are coverable for eligible patients with serious illnesses who meet Medicare's home health criteria. CMS states this does not create a new benefit; eligibility turns on a patient's skilled-care needs and satisfaction of existing home health criteria rather than a specific diagnosis. CMS states it plans to issue additional guidance with examples of covered skilled palliative care following publication. The rule shortens the Outcome and Assessment Information Set (OASIS) data submission deadline from 135 days to 45 days, which CMS states will accelerate public reporting of home health quality information by up to three months. CMS reports that approximately 98% of home health agencies already submit OASIS data within 45 days. For CY 2027, CMS estimates Medicare payments to home health agencies will increase by approximately 2.4% compared with CY 2026, and the rule includes a 3% temporary adjustment related to the ongoing budget-neutral transition to the Patient-Driven Groupings Model.