On August 28, 2025, the National Alliance for Care at Home submitted its comment letter to the Honorable Mehmet Oz, MD, Administrator for the Centers for Medicare & Medicaid Services.
RE: CMS-1828-P, Medicare Program; CY 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates
Dear Administrator Oz:
The National Alliance for Care at Home appreciates the opportunity to submit comments on the Calendar Year (CY) 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates Proposed Rule (Proposed Rule). The Alliance is the unified voice for providers delivering high-quality, person-centered healthcare to individuals, wherever they call home. Our members are providers of different sizes and types—from small rural agencies to large national companies—including government-based providers, nonprofit organizations, systems-based entities, and public corporations. Our members, including over 1,500 providers representing 10,000 offices and locations, serve over 4 million patients nationwide through a dedicated workforce of over 1 million employees, staff, and volunteers. Formed through the joint affiliation of the National Association for Home Care & Hospice (NAHC) and the National Hospice and Palliative Care Organization (NHPCO), the Alliance is dedicated to advancing policies that support care in the home for millions of Americans at all stages of life, individuals with disabilities, persons with chronic and serious illnesses, as well as dying Americans who depend on those supports.
Our detailed comments to the Proposed Rule are provided below.
Executive Summary: Proposed Permanent and Temporary Payment Adjustments
The National Alliance for Care at Home (the Alliance) is deeply concerned about the Centers for Medicare & Medicaid Services’ (CMS) proposed 9% home health payment cut for CY 2026 and the impact of these cuts on the health and safety of beneficiaries and the function of the healthcare system. Payments to home health agencies (HHAs) are estimated to decrease by $1.135 billion in 2026 as a result of the policies in the Proposed Rule. CMS’s continued cuts to home health payments are based on a fundamentally flawed approach and represent a direct threat to the care millions of Medicare beneficiaries rely on. Access to home health care has continuously eroded during the period of these misguided payment cuts, evidenced by increasing unfilled referrals, delays in care, and home health agency closures. Limited access to home health impacts the broader health care system by increasing overall Medicare costs making it harder to discharge patients from hospitals and skilled nursing facilities to their homes. This Proposed Rule, if finalized, will continue these troubling patterns.
The law directs CMS to determine the impact of differences between assumed and actual behavior change on estimated aggregate expenditures directly resulting from the implementation of the 30-day unit of payment and the new case-mix adjustment methodology without therapy thresholds (collectively referred to as the Patient Driven Groupings Model, or PDGM). The unwarranted cuts to home health are driven by CMS’s flawed approach that incorrectly attributes any behavior change to PDGM, when in fact the underlying claims data reflects changes due to other unrelated policy changes. The unwarranted cuts are also related to CMS calculations made with datasets that include data from fraudulent providers, especially those that have proliferated in Los Angeles County, California in recent years, and penalizes legitimate providers and beneficiaries for these anomalies. The Alliance stands at the ready to support efforts to eliminate home health fraud and ensure all Medicare beneficiaries receive the high-quality care they deserve. Significant errors in CMS’s approach are highlighted in this comment letter and must be addressed to preserve access to home health and promote a high-value Medicare system.
When the PDGM was implemented in 2020, Congress required that the transition be budget neutral. Yet the policies CMS has adopted, beginning with the original 2020 payment rate and followed by additional cuts in 2023 through 2025, have reduced total home health aggregate expenditures by more than $2 billion annually in a manner that Congress did not intend. Rather than course-correcting, CMS is now proposing a -4.06% permanent adjustment to the 30-day payment rate and a -5% temporary adjustment that would begin to recover an additional $5.3 billion in alleged overpayments. These cuts are being proposed in a payment environment where we estimate that total Medicare fee-for-service spending on home health will decline to $15 billion in 2025, down from nearly $18 billion in 2019. This is not budget neutrality, this is a systemic defunding of the Medicare home health benefit resulting in access to care concerns throughout much of the country.
CMS’s basis for these payment cuts rests on calculations that are deeply flawed and inconsistent with what Congress intended. Key concerns with CMS’s approach are summarized as follows:
- Data from 2022 and beyond reflects unrelated policy changes and market disruptions, not behavior changes due to PDGM.
- The inclusion of highly suspicious claims from Los Angeles County, California that impact CMS’s calculations for the permanent and temporary adjustments as well as undermine the integrity of the payment system. CMS has taken steps to exclude fraudulent data in other programs, such as adjusting benchmarks in the Medicare Shared Savings Program to remove highly suspect and anomalous data but has failed to take similar steps for home health.
- Exclusions of large amounts of data and the assumptions used in CMS’s analytical approach introduce bias, undermine the accuracy of CMS’s calculations, and are unrelated to the new case-mix adjustment methodology under PDGM and the transition from a 60-day episode to a 30-day unit of payment. These include (but are not limited to):
- Excluding roughly 20 percent of 30-day claims from the analysis;
- Structural issues with how low-utilization payment adjustments (LUPAs), outlier payments, and changes to clinical groups are handled when 30-day claims are ‘repriced’ as 60-day episodes;
- Static case-mix weights from 2019 used for repricing, even though CMS’s policy was to recalibrate the pre-PDGM case-mix weights annually using the most recent data available; and
- OASIS data for payment items used under the previous payment that are no longer collected and the assumptions CMS makes to map back to those items for its repricing approach.
We also raise several legal and technical issues in response to prior proposed rules that CMS has yet to sufficiently address. In addition to addressing our concerns regarding its calculations used for determining the permanent adjustments and temporary adjustments dollar amounts, CMS needs to adjust its calculations of the temporary adjustment dollar amounts to reflect the reduction in Medicare fee-for-service enrollment of over 11 percent between 2019 and 2024. Finally, lower payments on the fee-for-service side produce savings in Medicare Advantage through reduced benchmarks, creating a scenario where CMS collects more than the aggregate dollars it has determined for temporary adjustments. CMS must take this into account in determining the temporary adjustments.
In sum, if CMS’s flawed approach is used as the basis for continued and expanded payment cuts, the consequences will be severe. HHAs, particularly small and rural providers, are already struggling to maintain operations in the face of declining margins and escalating labor costs. Further cuts would jeopardize beneficiary access, particularly for those with complex care needs who depend on home health services as an alternative to institutional care. These cuts also risk shifting costs elsewhere in the Medicare program, including hospitalizations and skilled nursing facility stays, contradicting CMS’s broader value-based care goals. The approaches used by CMS are contrary to the stated goals of reducing fraud and abuse, these approaches bake fraudulent data into the payment system and punish legitimate providers while doing nothing to stop fraud. We strongly urge CMS to revise its approach and the policy rationale underlying these proposed adjustments.
Alliance Recommendations:
- The Alliance strongly recommends that CMS not finalize the proposed -4.06% permanent adjustment for CY 2026, recalculate the total permanent adjustments determined for CYs 2020 – 2024 (claims data analyzed to date) correcting for the issues identified in this comment letter, and finalize a positive permanent increase to the 30-day payment rate in 2026.
- The Alliance also strongly recommends that CMS not finalize the proposed -5% temporary adjustment in CY 2026 and recalculate the total temporary adjustments dollar amounts for CYs 2020-2024, taking into account home health expenditure decreases that already occurred due to excess permanent adjustments applied in prior years. Additionally, we recommend that CMS account for shrinking FFS enrollment and payment offsets occurring through lower Medicare Advantage (MA) benchmarks, which likely result in positive temporary adjustments. However, if CMS determines that negative temporary adjustments may still be warranted, the agency should use CMS’s “time and manner” authority to pause any temporary adjustment for CY 2026 while the agency evaluates an appropriate schedule for implementing any future adjustments that do not jeopardize the ability of Medicare beneficiaries to access high-quality, legitimate home health care.
