The Centers for Medicare and Medicaid Services (CMS) unveiled its 2027 proposed payment rule for home health agencies, which outlines an aggregate payment boost of $420 million, representing a 2.4% increase. This adjustment is derived from a proposed 2.1% payment update, valued at $370 million, alongside an estimated 0.3% rise tied to the fixed dollar loss ratio. While the document details updates to case-mix weights, outlier payments, and payment methodologies, it also places a significant focus on strengthening Medicare enrollment rules to mitigate improper payments and fraud. Under the Trump administration’s second term, the agency is taking an aggressive stance against waste and abuse in the hospice and home health sectors, following a six-month moratorium issued in May that halted new enrollments in these categories to target fraudulent activity.
The proposed measures aim to broaden the agency’s authority to deny or revoke enrollment for suppliers and providers associated with compliance violations, with all revocations made retroactive. This change would allow CMS to claw back taxpayer funds regardless of the specific reason for revocation. CMS Administrator Mehmet Oz, M.D., stated, “These proposals would give CMS stronger tools to protect Medicare beneficiaries and taxpayer dollars from fraud, waste, and abuse. The Trump Administration is committed to ensuring only qualified providers and suppliers participate in Medicare while preserving access to high-quality care for patients across the country.” The agency estimates these enforcement actions will generate approximately $82 million in annual savings while simultaneously improving the transparency and timeliness of quality information reported to the public.
Further provisions in the draft rule introduce new grounds for denial or revocation of enrollment, including instances where a provider is located in a geographic area with an excessive number of suppliers or if a provider has a misdemeanor conviction related to financial misconduct or sexual assault within the last 10 years. Additionally, the rule mandates that home health agencies, hospices, and durable medical equipment suppliers must re-enroll as new providers if they undergo a majority ownership change. The proposal also seeks to accelerate the delivery of care information to families by reducing the Outcome and Assessment Information Set data submission deadline from 4.5 months to 45 days. To further modernize the system, CMS intends to expand Medicare coverage for specific external infusion pumps and drugs starting April 1, 2027, as part of its ongoing effort to refine Medicare enrollment rules and enhance home-based care access.
