2026 Home Health Final Rule Explained

We break down the 2026 home health final rule, from the 1.3 percent cut and sequestration impact to face-to-face, OASIS, HHCAHPS, and value-based purchasing changes. We share concrete steps to shore up documentation, data, and budgets before January 1, 2026.

• Why the final rule timing compresses preparation
• Payment impact of the 1.3 percent cut plus sequestration
• What changes in face-to-face encounter responsibility and proof
• Aligning COPs with the all-payer OASIS requirement
• How HHCAHPS and OASIS items are being revised
• What new and removed VBP measures mean operationally
• Anti-fraud signals in enrollment and oversight
• Practical actions to update policies, analytics, and training
• Resources to read and where to find deeper summaries

We did present and post two very detailed summaries with the highlights of the home health content as well as the DME content on our website

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Chapters

• 0:15 Setting The Stage And Guests
• 1:03 Why Final Rules Matter
• 6:36 Payment Cuts And Budget Reality
• 7:29 Face-To-Face Encounter Clarified
• 11:23 All-Payer OASIS Alignment
• 13:02 CHAP Standards Update Process
• 14:16 Quality Reporting And HHCAHPS Changes
• 17:19 Value-Based Purchasing Measure Shifts
• 18:26 Anti-Fraud Focus And Enrollment
• 20:00 Action Steps And Provider Takeaways
• 23:02 Resources, Reading, And Next Steps
• 24:30 Closing Thanks And Support

Transcript

SPEAKER_01: 0:15

Greetings, I'm Jennifer Kennedy, the lead for compliance and quality at CHAP, and welcome to Chapcast. So today we're going to hash through uh some of the content or the give you the highlights rather of the calendar year 2026 home health payment update rule, but only for the home health content for this particular podcast. And I am joined by my compadre, my colleague, my longtime friend uh Kim Skehan. Uh, and Kim and I are going to hopefully um hit some of the highlights for you so that you understand uh what the requirements are in this um final rule. Kim, how are you doing today?

SPEAKER_00: 1:04

You know, it's um it's been a whirlwind for sure for certainly us, but as well as for providers. I mean, as we go through the home health components of the home health final rule, there certainly are um areas that uh specifically related to payment that uh that providers need to um focus on. Um we as also an AO also have the responsibility for DME. The demi post changes as well as the AO changes. So when we follow up with the with the additional podcast on uh that component of the final rule, I think you know, um that also will be extremely informative as well. So it's been a bit busy, but we're all in it together.

SPEAKER_01: 1:49

We're in it together, and you're right. Uh we'll we'll handle the DME in a separate podcast. This year, you know, was kind of unusual because we had um, dare I use the respite, uh the hospice term respite, meaning that you know uh the government was shut down and um many uh CMS staff were on furlough. So nothing happened. And the the time that we would usually be looking for this final rule to post, end of October, beginning of November, it didn't happen. And you know, here we are um pushing um Thanksgiving essentially and having a rule come out that Friday after Thanksgiving. So we have basically a month, uh we've lost a month as home health providers in reading the rule, understanding the rule, and unfortunately, that implementation date for the provisions for home health is January 1, 2026. So you're um you're coming into this, you know, a year, uh a year, oh my gosh, a month behind the the eight ball with not a lot of time uh to implement whatever you need to implement. And I I think Kim, let's start out with um, you know, why why should listeners be paying attention to this particular topic of a final rule?

SPEAKER_00: 3:16

Sure. I think first of all, any final rule provider should be looking at, even if it is not your service line. So so for example, um, you know, we're this is the home health final rule, and as you can tell, DME and AO um oversight um was embedded in this final rule. We've seen the same with home health and hospice, right? And and physician final rules. So, you know, um it really is important for organizations to keep track of any of these proposed rules uh that are coming out to determine applicable applicable areas. Um, and that's also where the state and national associations, the Alliance, for example, um, that really do a great job in terms of culling through them, but providers really are responsible for knowing. Um so the final rule provides the update to the upcoming calendar year payment for a home health agency, but also serves as a vehicle for introducing those new regulations or changes. And in um the the final rule is based on the proposed rule and taking into consideration where CMS feels it's appropriate, um, uh the comments that are submitted from providers um, you know, or from the industry um during the con the rule, the comment period, which if I'm if I'm correct, Jennifer, was with all the comments, was the final rule around 762 or so pages?

SPEAKER_01: 4:48

762, my friend. Now, what wine would we pair with that? I'm thinking a very heavy red. Yeah. Uh with the other. Because it was a very heavy rule in order to read that one through.

SPEAKER_00: 5:01

Absolutely. Um, so for this final rule, um, there is the the rate cut that's um there is still a rate cut, much lower than proposed, and overall minor changes to um other uh payment you know components such as LUPA thresholds, case mixed weights, and value-based purchasing, and then also some regulatory changes that really are essentially unchanged from the um the proposed rules. So um I think you know, we'll we'll I think just going through them um, you know, I think will be extremely important. I would also say that there are uh other resources for expertise, um, such as the National Alliance for Care at Home, um, many um consult expert consultants in the industry that also are providing um and EMRs, I believe, and other state and and national associations providing some additional um uh information as well. So from my perspective, we are we can speak to the um components of the rule, but the each organization needs to evaluate internally themselves, you know, how does how do these um how does the final rule impact um you as a provider and what other resources can I utilize to be able to really um you know ensure appropriate implementation or analysis?

SPEAKER_01: 6:27

Yeah, definitely. And I agree um with your um your shout out to the alliance because I think they do a really great job in the in the payment area. And while you know 1.3 uh percent is better than that proposed 6.4%, it's still a cut. And um, you're right, providers need to figure out um how they're gonna operate in calendar year 2026 on a 1.3% deficit. Now remember, sequestration is still in place as well. So 2% comes right off every claim as soon as it's submitted. So, you know, we're really talking about a uh uh 3.3% um when all is said and done. Yeah. So um I know that there were um some other uh changes uh or finalizations of um language from proposed to final uh that are outside of that payment area. And um even though it's kind of in the coverage uh regulations, Kim, that face-to-face encounter policy, um, CMS did finalize that language, and I'm hoping you could uh walk our listeners through that.

SPEAKER_00: 7:44

Um, sure, absolutely. So um CMS did finalize the change or really codify the change to the face-to-face regulation to uh allow physicians, in addition to nurse practitioners, CNSs, and PAs, to perform the face-to-face encounter, regardless of whether they are the certifying practitioner or whether they cared for the patient in the acute or post-acute facility from which the patient was directly admitted to home health and who is different from the certifying practitioner. This is important because um, from a payment perspective and denial perspective, um, over the years there had been um, you know, um denials, and I think occasionally still denials, um, if uh if the provide the practitioner that has a law uh that has signed the face-to-face was either, you know, not um, you know, uh was not that certifying practitioner. So that took a long time for organizations to get processes in place and for CMS and the MACs to get that clarified, this is finalizing that requirement. Um I do want to shout out to Katie Weary at the Alliance because when she did her um provision, she did remind everyone of the original intent of the face-to-face encounter, which is determining eligibility for the home health benefit. And one of the comments or one of the requirements that that is in the final rule, and it's also in the face-to-face requirement, is that the physician or allowed practitioner conducting the face-to-face encounter is the most knowledgeable practitioner and has firsthand information of the patient's current clinical condition, and that all other face-to-face encounter and certification requirements remain the same remain in place and are conditions of payment. Why this is important is because even though the language in the um in the final rule says regardless of whether they're the certifying practitioner or they care for the patient, um, and uh, you know, CMS at some point will be looking to um uh likely to determine if the practitioner signing that face-to-face encounter did have contact, not current knowledgeable relationship, you know, with that particular patient. So not sure how that will play out, but you know, just keeping that in mind when um when organizations are um receiving and obtaining the face-to-face encounter.

SPEAKER_01: 10:20

Yeah, I think everything, you know, everything could be up for grabs when you have a change in regulation. You know, it could be an edit that the Mac sets, it could be a target for any of the um CMS-related auditors, you know, smirks and UPICs and um racks, all of those things. Uh, you know, I I think once we see changes like this, those could be um actual targets, you know, as we move forward to look at compliance and and possibly deny claims if it's in the coverage area.

SPEAKER_00: 10:57

Absolutely. Um Jennifer, do you want to uh so that's the face-to-face encounter? Um, I I do want to I'll I'll mention this, and then if you don't mind, um um to hear more about uh the home health quality reporting and value-based purchasing, you know, um um uh changes specifically as it relates to quality reporting, um, I think that that will be important. Um but I do want to just mention regarding the um the the all-payer requirement for um for uh the alignment of the COPs um with the OASIS all payer submission requirements and the language to reflect all payers, so from patient to beneficiary. Um this is you know, this is a technical requirement, right, that needs to change to align the COP with the all payer requirement. But I do want to um take this time to just remind everybody of that requirement. If you are a Medicare certified home health agency, you must submit um an OASIS, uh, submit a complete and submit oasis for um uh or complete oasis for all payers for those those patients receiving services unless they are otherwise exempt. In other words, under 18 receiving maternity care only or personal care services only. So um, so that's been a source of confusion, I think, for some organizations that may have private duty, for example, um, you know, um under their home health umbrella. So they really you really need to make sure that that you're clear on those processes and that I'm sorry, the data collection requirement and submission. Um, Jennifer, um do you do what what is our plan at CHAP for updates to our standards related to this area?

SPEAKER_01: 12:58

You're just reading my mind, Kim. And thank you for bringing that all pair, all Oasis um point to the table. So um what we usually do uh and what we're doing right now is once a rule is finalized, we go ahead and look at our standards to see where we need to do the updates. And um, that's what we're completing as we speak. And um, before we can put them out to our home health providers, our CHAP providers, they have to go to CMS to be reviewed and approved. And then once they're approved, then we can um uh update our providers uh with that newest um copy of the standards. So a little bit of time uh that it takes um in order for us to make sure that we're doing it in the compliant way, uh, but please be looking out in the new year for uh the updated standards as it relates to this final rule.

SPEAKER_00: 14:00

No, that's that's yeah, that's great, Jennifer. Um, do you do you want to talk just a little bit going back to um the quality reporting? Um, any key points related to quality reporting and caps as it relates to VVP?

SPEAKER_01: 14:16

Yeah, I'll I'll just go ahead and point out a few highlights. Uh CMS did finalize a few things in this area. Uh they are removing the uh COVID-19 vaccine measure um uh out of the as a out from the OASIS uh as a data element. They're also removing four assessment items in that standardized assessment, and the four are the living situation item, two food items, and one utilities item. So um CMS uh is also revising um their home health caps survey, and uh that new survey will implement um beginning April 2026 in that sample month. And that revised survey uh also removes several items in the multi-item specific care issues measure, and three of the items used in the specific care issues measure will remain um uh in the HHCAP survey instrument. So they're they're doing a little bit of a shuffling around. Also, um the rule uh is not that this is well, I guess it's technically um attached to quality, but if you find um that you get the dreadit letter uh that says you're not compliant and you're um eligible for a 2% reduction uh in a payment rate because you didn't submit your quality um information, CMS did update their consider reconsideration policy uh so that it's essentially codified for any kind of extraordinary circumstance. So if you um had a flood fire, tornado, hurricane that interrupted your ability to submit timely quality information, uh, and you wanted to, and you got the letter and you wanted to appeal it or um send in a reconsideration, you would have to just outlight the circumstances, time frame, etc. So CMS did um update that as well. And you did talk about the all-payer. Um, there were some um updates to the home health value-based purchasing model beginning April 2026. Um, I mentioned that we will um have those uh changes to the HH CAPS, uh, CMS will remove the care of patients, communications between providers and patients, and specific care issues. Um, they also finalize the addition of four measures to the applicable measure set. Um this includes three OASIS-based measures related to bathing and dressing, and one claims-based measure, which is the Medicare spending per beneficiary for post-acute care um setting measures. Wow, that's a big long mouthful there. But the removal of um these data elements, Kim, is associated um with the HHQRP um assessment as of April 1, 2026.

SPEAKER_00: 17:43

Yeah, thanks, Jennifer. And again, um any changes to the value-based purchasing model, including these measures, um, also will um impact an organization's reimbursement or in the impact of value-based purchasing. Um, so as as well as any um any other you know, data changes that also are included. So value-based purchasing, um, both the caps changes, certainly as well as quality reporting changes, um, potentially, you know, they impact uh reporting and quality, but also payment once they are um you know um integrated into the value-based purchasing model.

SPEAKER_01: 18:26

Yeah, and you know, I think it's fair to say, Kim, that um we've seen um as even though we're not talking about the DME part today, um, there is the overall uh theme and tone in that rule about combating fraud and abuse. And we still have fraud and abuse happening in home health as well as DME, but um CMS is um really serious. They have uh a war, what they call their fraud and abuse war room up at CMS in Baltimore, um, that is um looking at all provider types for decreasing fraud and abuse. So um it's something that CMS is serious about, and we're gonna keep seeing um this type of language infused in these provider rules because um that is one of their initiatives up at CMS for um this fiscal year.

SPEAKER_00: 19:25

Yes, absolutely. And and even in this um final rule, there are, you know, um there are some changes or updates to Medicare provider enrollment. So and and that just again speaks to that focus of anti-fraud, not just in DME or hospice, you know, or other settings. It's definitely across the across all settings that CMS is, you know, taking notice and implementing, I think, you know, changes and likely aligning some of these enrollment requirements across settings whenever they can. And most definitely. We have seen, and I think the industry has seen a really significant focus on initials or organizations that are starting home health or hospice, as well as chow change of ownership, you know, but also if you have to do if you have to conduct revalidation. So it's it's extremely important that agencies stay attuned to you know ensure compliance, but also stay attuned to the you know what's going on in terms of um of uh compliance um efforts from CMS.

SPEAKER_01: 20:38

Absolutely, Kim. And um are there any other takeaways that you'd like our listeners to bundle up and take back to their organizations?

SPEAKER_00: 20:48

Absolutely. I mean, you know, as we say uh probably with each podcast, um, you know, analyze your financial and operational impact related to these payment updates, not just in the rates, but also impact for value-based purchasing, outliers, the LUPA changes, as well as any case mix uh weight changes. And again, utilize expert, external experts in consulting this analysis if you don't have that ability internally. Um, and update your policies and processes specifically regarding any regulatory changes and process changes to and ensure compliance with face-to-face encounter and OASIS uh data collection and submission requirements. And then I would just say as we as we also also remind everyone, stay tuned for updates, certainly from us at CHAPTER, but um really importantly from your state and national associations and um you know and other expert um you know experts in the field for ongoing education and stay vigilant regarding any changes because um you know as you had pointed, we talked before, Jennifer, about you know, this is the home health final rule. Um and there may be a um you know a way to sort of breathe a little easy because we went from a potential 6.4% to 1.3 percent, but MedPAC is um, you know, is also you know um recommending you know higher percentages, percentage decreases or rate cuts, you know, which is again a separate a separate entity from CMS, but they're advisory. And so we don't, you know, we really have to stay vigilant um to regulatory um and payment proposed changes, but also ensuring that our operations are um are as you know as refined um as as possible, streamlined to be able to ensure that you're able to uh meet those challenges.

SPEAKER_01: 22:54

Yeah, absolutely. It's always the hope for the best, plan for the worst every year when we're in rulemaking, essentially. Um, I just wanted to add to your takeaways, you know, we did present and post uh two uh very um detailed summaries with the highlights um of the home health content as well as the DME content on our website. And um, even though it's nice to listen to Kim and I talk about some of those highlights, you have to read. I know it's a bummer, but you have to read, um, whether it be our summaries, whether it be the CMS wrap-up summary, or if you want to choose a nice heavy red wine and dive into 762 pages of a final rule, um, there's no getting around uh at least reading something uh in terms of uh relatedness to the um provisions in this rule. So hopefully uh we have helped you uh by doing the cutout summaries and um hopefully getting you on your way uh to being compliant by January 1, 2026. Anything else before we bid our listeners adieu, Kim?

SPEAKER_00: 24:10

Um no, I I think that there certainly is plenty um for the uh for for providers to be looking at um specifically as it relates to home health, not just from the final rule, but also our industry changes and challenges. Um so you know, certainly you know, we we appreciate everyone taking the time to uh listen to us and um and we're happy to support you um, you know, with um additional information um as specifically as it relates to regulatory requirements, um, you know, as as we uh are also updated. So thank you. Um thanks, Jennifer, for as always, for you know, inviting me to join you, and um, you know, and it's my pleasure. Well, thanks so much, Kim.

SPEAKER_01: 24:58

So from Kim, me, and the entire CHAP staff, keep your quality needles surging forward, stay safe and well, and thanks for all you do.