The U.S. Centers for Medicare & Medicaid Services (CMS) has finalized its 2027 home health rule, which contains significant regulatory updates that affect all healthcare providers.
In addition to those provisions, the agency implemented an aggregate payment increase of 2.4%, or approximately $420 million, a departure from recent years in which home health providers have faced reimbursement reductions.
CMS is adopting new measures to strengthen oversight of Medicare providers and combat fraud, waste and abuse under its calendar year 2027 home health payment rule. Although the provisions were introduced as part of the home health proposal, they could also affect hospice providers and other healthcare settings.
“The Trump Administration is taking action to hold noncompliant providers accountable and ensure Medicare works with legitimate, qualified providers,” said CMS Administrator Dr. Mehmet Oz, in a statement. “These changes will help protect seniors, safeguard taxpayer dollars, and preserve access to the care beneficiaries need.”
Oz said the provisions would give the agency additional tools to protect Medicare beneficiaries and taxpayer dollars by ensuring that only qualified providers and suppliers participate in the program.
The agency estimates the proposed measures would generate approximately $82 million in annual savings by expanding its authority to recover improper payments and deny or revoke Medicare enrollment.
One key provision expands CMS’ authority to recover Medicare payments from providers and suppliers whose enrollment is revoked. Under current policy, the agency can recover payments retroactively only in certain enrollment revocation cases. The proposed rule would extend that authority across all revocation categories, regardless of the reason for the action.
CMS has also extended the circumstances under which the agency can deny or revoke Medicare enrollment. Under the changes, the agency could revoke enrollment if it determines that a provider or supplier presents a heightened risk of fraud, waste or abuse because it operates in a geographic area with an unusually high concentration of Medicare providers and suppliers.
CMS can now also deny or revoke enrollment for providers and suppliers convicted within the previous 10 years of certain misdemeanor offenses involving sexual assault or financial misconduct.
For patients with serious illnesses who meet eligibility requirements, the rule clarifies how Medicare’s existing home health benefit may cover skilled palliative care services, including pain and symptom management in the home.
Eligibility is determined by patients’ clinical needs and their ability to meet Medicare’s home health coverage criteria, not by a specific diagnosis. Unlike hospice care, palliative care provided under the home health benefit can support patients who require skilled services while living with a serious or progressive illness. CMS said in the final rule that it plans to issue additional guidance, including examples of skilled palliative care services
“This addresses provider uncertainty that may have limited use of these services; it does not create a new benefit,” CMS indicated in a fact sheet.
