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Protect Home Health Care
Oppose Dangerous Medicare Payment Cuts
Home health helps patients recover where they’re safest – at home. But proposed cuts risk taking away critical nurses, visits, and care options. We must protect what’s working and invest in care that meets patients where they are.
The Centers for Medicare & Medicaid Services (CMS) Calendar Year (CY) 2026 Home Health proposed rule represents a devastating blow to Medicare beneficiaries’ access to essential home-based care. The proposed payment cut of over $1 billion dollars – 9% to the 30-day payment rate – will force agency closures, create healthcare deserts, and harm our nation’s most vulnerable patients who depend on home health services.
This webpage provides background on relevant home health payment policy to date and offers resources for Alliance members and the broader home care community to help policymakers, and the public understand the potential impact of these proposed payment cuts.
Patient Impact:
- Reduced access to home health services
- Expansion of home health care deserts
- Forced transitions to more expensive care settings
- Disproportionate impact on vulnerable populations
- Disruption of recovery and chronic care management
Provider Impact:
- Agency closures and service reductions
- Difficulty recruiting and retaining skilled staff
- Operational challenges amid inflation
- Reduced ability to serve rural and underserved areas
- Increase strain on quality care providers while failing to target fraud, waste, and abuse
Download practical tools to engage the media and policymakers and protect home health care.
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Advocating for You – Read More in Modern Healthcare
CMS proposes $1.1B in Medicare pay cuts to home health agencies
Background & Timeline | CY 2026 Home Health Proposed Rule
Amended by the Bipartisan Budget Act of 2018, Section 1895(b)(3)(D) of the Social Security Act directs the Secretary of the U.S. Department of Health and Human Services to remove home health Medicare therapy thresholds and shift payments from a 60-day to 30-day episode in a budget neutral manner.
CMS implements the Patient-Driven Groupings Model (PDGM) payment system and sets the Medicare home health payment rate for 2020 to maintain budget neutrality. To meet this requirement, CMS made assumptions about how home health agency (HHA) behavior might change under PDGM and incorporated initial rate adjustments to offset any projected increases in spending. Under the law, CMS is required to annually compare these assumed behavior changes with what actually occurred from 2020 through 2026. If actual home health spending under PDGM is higher or lower than it would have been under the old model, CMS is to apply a “permanent” adjustment to future payment rates and may also implement one-time “temporary” adjustments to reconcile past over- or underpayments.
In CY 2023 rulemaking, CMS’s analysis of the first two years of PDGM from 2020-2021 indicated that a permanent -7.85% adjustment to the base rate was needed to achieve budget neutrality. In response to concerns raised by the Alliance’s legacy organization NAHC and other stakeholders, CMS implemented only half of that cut in 2023 (a -3.925% rate reduction), opting to phase in the impact and recognizing the potential hardship on agencies (87 FR 66791). While CMS’s approach is intended to maintain budget neutrality, CMS has relied on a methodology that is technically flawed to pursue substantial rate reductions that threaten home health access for millions of Americans nationwide.
For CY 2024, CMS determined a -5.779% adjustment was needed (including the remainder left from 2023) but finalized a -2.890% permanent adjustment to the CY 2024 national, standardized 30-day payment rate stating that the full reduction in a single year may be too burdensome for agencies (88 FR 77697).
In 2025, the Agency proposed another -3.95% behavioral adjustment yet applied only -1.975% (89 FR 88373), stating it was mindful of possible disruptions the reduction may cause to the services to which beneficiaries are entitled. Each year, CMS justified scaling back immediate cuts to alleviate financial shock to HHAs, in response to concerns raised by NAHC and industry stakeholders. However, this gradual approach means the remaining “temporary” cuts from 2020–2024 have continued to grow.
CMS issued 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. CMS also released a fact sheet. In addition to a -4.059% permanent adjustment, for the first time, CMS proposes to begin clawing back alleged overpayments from 2020-2024 with a 5% temporary adjustment. HHAs have repeatedly voiced serious concerns about CMS’s PDGM methodology and its adverse impacts on home health care access nationwide. The Alliance maintains that CMS’s methodology is fundamentally flawed and inconsistent with congressional intent—and urges the Agency to use its “time and manner” authority to avoid precipitous rate cuts.
Members-Only Resources
How You Can Make a Difference
Alliance CY 2026 Home Health Proposed Rule Pre-Comment Letter with State Co-Signers ➤
Make Your Voice Heard | Comment Primer: CY 2026 Home Health Proposed Rule ➤
Alliance Webinar Slides | Implications for Providers: CY 2026 Home Health Proposed Rule ➤
Medicare Home Health Care Benefit 101 | One Pager ➤
