The comment window for the proposed CY2027 Medicare home health rule has closed, and the difference in quantity and quality from last year feels stark.

Last year, the home health community flooded the Centers for Medicare & Medicaid (CMS) with official comments decrying what was the largest proposed cut to the Medicare base payment rate. The outpouring reached an impressive 952,483 comments submitted to the Federal Register.

This year, both the quantity and quality of comments differ substantially, and the submissions offer clues not just about how the home health community feels about the proposed rule, but about the direction CMS is headed in its approach to home health rulemaking.  

The proposed rule received 657 comments before the window closed, a far cry from last year’s comment list, but perhaps more oriented toward home health’s payment history.

With CMS proposing a payment increase rather than the dramatic aggregate cut providers faced last year, commenters had more room to engage with the rule’s underlying mechanics — particularly the lingering effects of PDGM budget-neutrality adjustments and the agency’s market-basket assumptions.

They also had to grapple with consequential provider-enrollment proposals that extend well beyond home health. The rule may be a home health payment rule on its face, but several of its enrollment provisions would reshape how Medicare providers and suppliers more broadly think about affiliations, staffing relationships, revocations and compliance risk. 

In this week’s exclusive, members-only HHCN+ Update, I’ll dig into some comments submitted to the Federal Register, offering analysis and key takeaways, including:  

— The mixed-bag proposed rate reaction

— The enrollment quandary

A different rate debate

The proposed CY2027 rule is notable for its headline-level change: CMS is proposing an increase to home health payments rather than another overall cut. Commenters largely welcomed CMS’ decision not to propose additional permanent behavioral adjustments for 2027 — but also made clear that the proposed 2.1% payment update does not make up for years of payment pain — or resolve the underlying dispute over CMS’ PDGM budget-neutrality methodology.

The National Alliance for Care at Home (the Alliance) and LeadingAge both urged CMS to withdraw the proposed –3% temporary adjustment, which would continue CMS’ effort to recoup what it considers PDGM-related overpayments. The Alliance stated that permanent PDGM-related reductions have reduced the 30-day payment rate by 9.37%, calling the agency’s methodology into question.

“A single positive update does not restore a base rate reduced by 9.37% that will continue to be cut by roughly 3% annually for the next decade,” the Alliance’s comment leader read. “The confounding factors CMS correctly identifies for CY 2023 and later were present earlier, and the methodology that produced the adjustments still embedded in the rate remains flawed.”

The Alliance and LeadingAge differed somewhat in their market-basket calculations, but their message was consistent: annual updates have not kept pace with actual provider costs. The Alliance called for a 7.6% forecast-error correction, while LeadingAge calculated a cumulative 7.3-percentage-point shortfall from 2021 through 2025. LeadingAge’s analysis found that the cumulative projected market-basket increase over those years was 16.62%, compared with actual growth of 23.95%.

Last year’s proposed 6.4% aggregate reduction was so large that it felt to me that it overwhelmed nearly every other policy debate around the rule. This year’s proposed increase gives the sector room to focus on a more complicated, longer-running concern: whether the PDGM payment structure has created a ratchet effect in which modest annual updates arrive on top of a base rate that commenters argue was improperly reduced.

That does not mean the rate debate has cooled. If anything, the less-drastic headline may be allowing provider groups to articulate a more ambitious position: a positive update alone is not enough if CMS leaves prior permanent adjustments intact and continues temporary recoupments.

Enrollment provisions

In the proposed rule, CMS suggested several enrollment policies. The proposed changes would expand CMS’s discretion to deny or revoke enrollment, make revocations retroactive to the date of alleged noncompliance, reduce the post-revocation claims-submission window from 60 days to 15 days, broaden the definition of “managing employee,” and remove the current five-year lookback period for affiliation disclosures.

For providers, the practical risk is that enrollment becomes less about whether an agency itself is operational and compliant, and more about whether it can fully account for every relevant employee, vendor, affiliate, ownership relationship, or past association.

LeadingAge objected to proposals that could allow CMS to act based on vague concepts such as an “excessive number” of providers in a geographic area, co-location with a revoked provider, or a broadly defined business relationship.

The group called for at least one year for currently enrolled providers to comply if the provisions move forward. 

One fascinating decision by CMS this year was to include what LeadingAge characterized as Medicare-wide enrollment reforms in a home health-specific rule. LeadingAge objected to this, as did other commenters I saw when trawling through the Federal Register.

“I am a physician who provides primary care to vulnerable older adults as well as specialized wound healing for those living with chronic wounds,” one commenter wrote. “The proposal would remove the established criteria that target fraud and abuse and replace the criteria with an undefined agency discretion. At a time when we have difficulty finding primary care providers, both in well resourced and non-resourced areas, the last thing we need are non- objective criteria that could expose providers to revocation of their Medicare payment.”

The commenter continued:

“It does not make sense to make any of these rules through the home health payment rule as a policy of this type applies to all providers and supplier types. Separate rulemaking should be applied and discussed before finalized.”

This decision, for me, implicates a larger problem: CMS may be using provider-specific payment rules to advance cross-cutting program-integrity policy. It could go the other way in the future, with Medicare-wide changes suggested in other types of rulemaking. Providers should take note of this tendency and, while seeing if CMS softens its enrollment and rate adjustment proposals, keep an eye on how CMS approaches future rulemaking.