Some of the most important issues raised by the Proposed Rule aren’t simply about what CMS is proposing. They’re about the questions the home health industry should be asking CMS to answer.

I recently submitted my comments to CMS regarding the CY 2027 Home Health PPS Proposed Rule.

At first glance, this year’s Proposed Rule contains some welcome news for home health. CMS projects aggregate Medicare home health spending to increase 2.4%, and for the first time in several years, CMS is not proposing another Permanent Behavioral Adjustment. CMS is, however, proposing another 3.0% Temporary Behavioral Adjustment for CY 2027.

But those headlines shouldn’t end the conversation.

The Proposed Rule raises questions that I believe CMS should be asked to explain—and that stakeholders should be asking from their own perspectives.

Here are a few of the questions I raised in my comments.

If PDGM Was Supposed to Begin Budget Neutral, What Explains What Happened to Home Health Spending Since 2019?

PDGM fundamentally changed Medicare home health reimbursement when it became effective in 2020.

Congress required implementation of the 30-day payment model to be budget neutral, with CMS subsequently required to reconcile actual versus assumed behavior and expenditures through the Behavioral Adjustment methodology. Since then, CMS has implemented a series of Permanent Behavioral Adjustments and, more recently, Temporary Behavioral Adjustments intended to reconcile assumed versus actual provider behavior and its effect on aggregate Medicare expenditures.

But look at what has happened to Medicare Fee-for-Service Home Health Spending.

The spending trend does not, by itself, prove that CMS’ methodology is incorrect. It also needs to be considered in the context of changes in Medicare enrollment, including the substantial growth in Medicare Advantage during much of this period.

But it deserves an explanation.

If actual aggregate HH PPS expenditures after implementation of PDGM fell materially below the expenditures that otherwise would have occurred absent PDGM, how has CMS incorporated that outcome into its budget-neutrality and Behavioral Adjustment calculations?

There is another reason I believe that question deserves attention.

In the CY 2027 Proposed Rule, CMS acknowledges that more recent changes in provider behavior may not be directly attributable to PDGM because of confounding factors, including continued Case-Mix Weight recalibration, implementation of OASIS-E, and previous reductions to the home health payment rate. That is one reason CMS is not proposing an additional Permanent Behavioral Adjustment for 2027.

That raises another question:

If confounding factors are sufficiently important today that CMS cannot reliably attribute observed changes directly to PDGM, shouldn’t similar confounding factors be considered when evaluating the Behavioral Adjustments already imposed?

And I believe this concern extends well beyond PDGM. Similar confounding factors have existed, and in my view were never adequately accounted for, since CMS first began implementing Behavioral Adjustments under HH PPS in 2008.

Home health has experienced substantial changes in patient assessment, coding, quality measurement, clinical practice, patient acuity and reimbursement methodology over the years. Not every change in Case-Mix Weight, utilization or provider behavior is necessarily evidence that providers changed their practices simply to increase reimbursement.

And if subsequent evidence indicates that earlier assumptions overstated the financial impact attributable to provider behavior, that should be recognized as well.

The purpose of reconciliation should be to reconcile. It should not operate only in one direction.

The Outlier Funding Disconnect: What Happens to the 2.5% That Home Health Never Receives?

The Patient Protection and Affordable Care Act (PPACA) changed the Home Health Outlier Provision beginning in 2011. Under that legislation, HH PPS payment rates are reduced by 5% to fund the Outlier Provision, while aggregate Outlier payments are limited to no more than 2.5% of estimated total HH PPS payments.

In other words, the legislation created a funding disconnect that has now existed for more than 15 years.

Five percent is removed in determining HH PPS payment rates to fund Outlier payments, but no more than 2.5% can ever be returned to HHAs through those payments.

So what happens to the other 2.5%?

I am not alleging where those dollars went.

I’m asking CMS to tell us.

If those dollars remained in the Medicare Trust Funds, document it. If they were accounted for elsewhere, identify where. And tell the industry the cumulative amount involved since 2011.

There is also a second part to the question.

The 2.5% is a ceiling on Outlier payments. It does not mean the entire 2.5% is necessarily paid to HHAs each year. Because of the mechanics of the Outlier payment calculation, actual Outlier payments can—and have—fallen below that ceiling.

When that occurs, the difference between the 5% removed from HH PPS payment rates and the amount actually returned to HHAs through Outlier payments becomes even greater.

So there are actually two potential differences that need to be accounted for: the difference between the 5% reduction and the 2.5% maximum available for Outlier payments, and any additional difference between that 2.5% maximum and the Outlier payments actually made.

My submitted comments ask CMS to provide an annual accounting from 2011 forward showing the 5% reduction, the 2.5% ceiling, actual Outlier payments, and the accounting disposition of the differences.

These are Medicare dollars that otherwise would have been included in determining payments for home health services.

The industry should know what happened to them. See the following:

And What Exactly Is an “Imputed Cost”?

There is another aspect of the Outlier Provision that I believe deserves greater transparency.

CMS determines whether an individual 30-day payment period qualifies for an Outlier payment using imputed costs derived from national Per Visit payment rates converted into 15-minute units by discipline.

That led me to a fairly basic question:

Why is a payment rate being used as the starting point for an imputed “cost” calculation?

A payment rate and an actual Cost Per Visit are not necessarily the same thing.

If the purpose of the Outlier Provision is to provide additional reimbursement for unusually resource-intensive patient encounters, the imputed-cost methodology should have a demonstrable relationship to the actual cost of furnishing those services.

Among the information I requested from CMS are the current 15-minute imputed-cost rates by discipline, how those rates are determined, when the underlying assumptions were last comprehensively recalibrated, and how they compare with actual industry Costs Per Visit reported through Medicare Cost Reports.

An HHA should be able to independently reproduce the calculation used to determine whether one of its patient encounters qualifies for an Outlier payment, evaluate that calculation, and ensure that the Outlier payment it received was correct.

Does Home Health Need Its Own Wage Index?

Home health competes for many of the same nurses, therapists and other clinicians as hospitals, but it does so under a very different operating and reimbursement structure.

Yet Medicare home health payments continue to rely on a wage index derived from hospital wage data.

I support CMS’ consideration of a home-health-specific wage index. But its development should include transparent methodology, adequate testing, geographic impact analysis and an appropriate transition before implementation.

The question isn’t simply whether the current wage index can be applied to home health. It’s whether it adequately reflects the labor market in which HHAs actually have to compete.

Those Are Some of My Questions. What Are Yours?

My comments were intentionally focused primarily on the financial, reimbursement and operational aspects of the Proposed Rule—areas where my experience provides the greatest perspective.

The Proposed Rule also contains important clinical, quality and other policy provisions that deserve thoughtful comments from people whose experience and expertise provide perspectives different from mine.

A clinician may recognize an unintended consequence that isn’t apparent from a financial model. An Administrator may understand an operational implication that isn’t visible in claims data. An owner may see the cumulative effect of several policies that appear relatively insignificant when considered individually.

That’s part of what the public-comment process is supposed to provide. CMS cannot consider experiences and information that stakeholders never provide.

You don’t have to agree with my comments. You don’t have to be a reimbursement expert. And you don’t have to develop an entirely original argument.

If an association, consultant, attorney, colleague or another HHA makes a point that reflects something you believe, use the idea.

But don’t stop there.

Borrow the idea if it reflects your experience. But add your experience to the idea—and make the comment uniquely yours.

Explain what you have experienced. Add an example from your agency. Explain how the proposal could affect your patients, clinicians, finances or operations.

Copying and pasting the same prefabricated comment hundreds of times may demonstrate that many stakeholders support the same position. But those duplicate comments add little, if any, new substantive information for CMS to consider as it develops the Final Rule.

There is nothing wrong with using another person’s or organization’s idea when you agree with it. But take the additional step of putting it into your own words and explaining why it matters to your agency.

Add your experience. Add an example. Add a number if you have one.

Give CMS something else to consider.

If your agency’s nursing wages increased substantially while Medicare reimbursement failed to keep pace, say so.

If you cannot recruit or retain clinicians at the wages your reimbursement supports, explain that.

If a proposed policy would create an operational or clinical problem that CMS may not recognize from its data, tell them what that problem is.

That’s information only stakeholders can provide.

Participation Should Not Be Someone Else’s Responsibility

Thousands of home health agencies will be directly affected by the policies CMS ultimately adopts.

Yet participation in the annual rulemaking process is frequently left to trade associations and a relatively small group of organizations and individuals.

Associations play an important role in representing the industry. But their participation should not substitute for participation by the organizations and people actually providing the care.

For an HHA owner or senior executive, participation in annual Medicare rulemaking should not be viewed as someone else’s responsibility. Few decisions made outside the organization can affect its future more directly.

CMS provides stakeholders an opportunity to comment on every Proposed Rule.

Use it.

Your comment doesn’t need to be 18 pages. It doesn’t need sophisticated reimbursement modeling. And it doesn’t need to address every provision in the Proposed Rule.

It needs to tell CMS something you believe CMS should understand before making its final decisions.

The Deadline Is Monday, August 31

Stakeholder comments on the CY 2027 Home Health PPS Proposed Rule must be submitted on or before Monday, August 31, 2026.

I submitted mine.

I’ve also made my complete comments available below for anyone interested in the more detailed analysis and recommendations behind the questions discussed here.

Those are some of my questions. What are yours?

If you own, operate, lead, work for, invest in, advise, or otherwise have a stake in the future of home health, this is your opportunity to tell CMS what you believe it should understand.

Don’t assume someone else will say it.

Read My Submitted Comments to CMS: https://www.regulations.gov/comment/CMS-2026-2311-0170

Submit Your Comments to CMS: https://www.regulations.gov/commenton/CMS-2026-2311-0002