The 2027 CMS Proposed Rule For Home Health

We break down the calendar year 2027 proposed home health rule and why it signals a bigger CMS push on quality, transparency, and program integrity beyond reimbursement. We focus on enrollment risk and the palliative care request for information, then lay out what providers should do now to protect operations and influence the final rule. 
• proposed payment positives alongside larger compliance impact 
• home health quality reporting program changes, including OASIS and HHCAHPS timeline implications 
• expanded provider enrollment denial and revocation risk, including clerical errors and longer exclusion periods
• change of ownership pressure points, including management agreements and the 36-month rule 
• broadened “managing employee” definition capturing more clinical leaders and contractors 
• “guilt by proximity” concerns tied to suite locations and geographic zip code concentration 
• CMS palliative care direction through the Medicare home health benefit and why homebound eligibility creates gaps 
• requests for comments, including a technical expert panel or a trial run before implementation 

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Transcript

Why The 2027 Rule Matters

SPEAKER_00 0:29

Greetings, I'm Jennifer Kennedy, the lead for quality and compliance at CHAP, and welcome to this episode of CHAPCAST. So today I'm joined by my friend and colleague and partner in crime, Kim Skian. And what we're going to do today is attack the calendar year 2027 proposed home health rule. And we're going to dive into this anticipated update for calendar year 2027. And while payment is a piece of this rule, we're not going to really spend a lot of time on payment. But this year's rule, a proposed rule rather, goes far beyond reimbursement rates. It does signal a continued focus on things like value and quality measurement and transparency and program integrity. All while home health providers have to deal with challenges like workforce shortages and rising costs for operations and increasing demand for care in the home. So welcome, Kim. You ready to talk some proposed rule?

SPEAKER_01 1:44

Sure, Jennifer. As always, we know that CMS keeps coming with the proposed rules and final rules and memos. So there's never a dull moment, especially in our world and your world, in compliance and quality and uh and and regul and a regulatory oversight.

The Good News And The Caveats

SPEAKER_01 2:05

As you said, we are, you know, we focus on accreditation, but just a couple of there were actually a couple of good uh news items in the proposed rule, assuming that they're finalized. One from a payment perspective was an um an increase in uh estimated 2.4% of a payment, plus um continuing the temporary PDGM adjustment and also no proposed changes to the VVP model. But there are proposals impacting quality report uh home health quality reporting program, um, you know, including but not limited to OASIS and CAP submission timelines. And there are some requests for information for agencies to review and consider providing comments. And I think that uh, you know, that's going to be something I know that you know we'll both be commenting on, you know, in the couple of areas that we feel are really areas to highlight. Um, as you said, they're also proposing significant program integrity and provider enrollment changes and additional fraud prevention measures affecting both home health agencies but other providers. And it is in those proposals that that we want to really uh spend time on, um, at least uh, you know, I do, because uh uh providers really need to be aware of the potential impact, you know, for all providers.

SPEAKER_00 3:30

So well, Kim, let's uh uh you know unpack some of this and um hit those highlight areas outside of payment. I mean, I'm I'm happy that there is a proposed bump um to the payment. Um, we'll see if that sticks to a final rule. Um, but let's go ahead and unpack some of the other items that I I think are really important for our our partners to understand about this rule.

SPEAKER_01 3:58

Yeah, absolutely.

Enrollment Denials Get Much Broader

SPEAKER_01 4:00

So I think you and I are, we know we're both passionate about a couple of these proposals. And um for me is provider enrollment, and I know for you palliative care. Um and um and so um I'll you know go over the key points or concerns about provider enrollment that provide that um agencies need to be aware of. These are sweeping enrollment and compliance changes that affect all Medicare providers and suppliers, and that includes home health and hospice and DME again, unless it's explicitly excluded. Um but the key proposals that providers need to hear, there are expanded grounds for enrollment denials for up to 10 years for pretty much any reason, including like a clerical error. So in up until at this point, you know, a provider enrollment or A55A um application will be potentially denied if there is a suspicious, you know, suspicious documentation, ownership issues, concerns about fraud or abuse in the system or a track record. Um this proposed rule is basically widening the scope to deny on anything. So if a if there's a potentially if there's a clerical error, a dash is missing, or a suite number is wrong, you can be denied and then subsequently disenroll or denied for 10 years. Um the other another is just um, you know, we know that the Chows change of ownership, there are limits or restrictions on change of ownership within 36 months. We know this, it's been in place for a long time. But um failure to comply with the 36-month rule in terms of not notifying CMS, or, and this is the key part that I think is important, there are providers that are failing to um uh that are circumventing the requirement under the guise of a management agreement. So for organizations that enter into or they're in advance of a chow, um, you know, traditionally they utilize um a management agreement from the buyer, from the seller to the buyer to be able to have that transition. So um in this particular case, should this become finalized, um council, you know, organizations are really gonna have to look at this, you know, from their council with counsel.

SPEAKER_00 6:32

Was that like a workaround that organizations did uh in order to keep the process moving forward?

SPEAKER_01 6:39

So the language in the proposed rule talks about circumventing the requirement under the guise, you know, this is CMS speak, um, um alluding to the fact that this that's what the reason is for. I um I would like to think that not all providers are trying to circumvent, um, but that they may not realize that a management agreement, you know, would not be applicable in this in this case. But the point is that it's again has more broad effects for organizations to really think, you know, think through how this may impact them, um, especially with the moratorium, you know, and um what would trigger a chow. The other is the definition, the expanded definition of managing employee that includes all medical directors, not just nursing home and hospice, clinical directors, department heads, supervising physicians, alternate administrators, and all other clinical personnel. And that it doesn't matter if it's a W-2 or a contracted employee. So looking really at the broad scope and the implication is really important. And there's also some physicists.

SPEAKER_00 7:48

Yeah. I'm gonna ask you this question. Were we at all surprised to see this um program integrity uh language, proposed language, baked into this rule, given that we are in a home health moratorium?

SPEAKER_01 8:04

So I can say um, you know, uh we were not, and when I say we at CHAP, but I'm also on the um National Alliance for Care at Home, home health um uh, you know, uh uh program integrity work group. And I would say that we all anticipated some level of program integrity because we know what look at what's been coming out, you know, really since the beginning of this year, um, you know, and even you know, um since the beginning of the administration, but really in 2026. What I think is um uh what was not expected, I think, was the breadth of these uh proposals. There are some cons there are some concerns at the national level about the legality of some of the broad strokes, if you will, uh the broad brush that this is being painted. Um that's not for us, you know, um to look at, but certainly um organizations that have really need to take a look at these proposals, listen and talk with their state associations and national associations to be able to participate in providing feedback. Um the only other, there's there's others. There's um, you know, expanding signage requirements, et cetera. Um, but the two that I do want to point out for that also impact providers because home health agencies will say, I'm not doing anything wrong, you know, so I don't have to worry about

Revoked By Suite Or Zip Code

SPEAKER_01 9:35

it. It's the bad guy down the street, you know, who's having a problem. Well, they they did put two new proposals in this um proposed rule. One is guilt by proximity, the same suite, where they can deny an enrollment or of even a compliant provider because the provider's practice location is in the same suite or office as a different provider whose enrollment was revoked or denied. And the same for your zip code. So it's not just the building, not just the suite, it's um, you know, revoke for your zip code, excess providers in the area. Um so CMS may revoke an enrolled compliant provider because it's located in a geographic area that CMS determines has an excessive number of providers and suppliers. Now there's no definitions in uh in these um, you know, in the proposed rule, and CMS notes that they will, in the final rule, provide um pla uh the um definitions in plain language. That's you know, that's not sufficient. We don't know what that means, right? And what those potential limits are. But this is where agencies have to understand it's not just about I'm gonna say like what you consider to be the bad guy or the other guy. It's impacting or potentially impacting everyone. That's the scary part.

SPEAKER_00 11:00

That's extremely concerning. That that that particular item there. It's very concerning because you could be one of those you know, high-road compliant organizations, and you're gonna get punished if this goes through.

SPEAKER_01 11:15

Yeah, absolutely. Um, so Jennifer, you uh that's that's a sort of a high-level synopsis of um, you know, my passion project, right now, my passion point. Um I'm about uh why don't we turn to yours? Um, although it really is both of ours, but you are, you know, this is your focus and and rightfully so.

Palliative Care Through Home Health

SPEAKER_00 11:39

Yeah, so there was an RFI um request for information in the rule, and it wasn't this was weird the way that the language was couched, because while they while CMS was asking for feedback, it was asking for feedback on how to implement um home health, I'm sorry, uh palliative care through the home health benefit. And I'm talking about community-based palliative care. So they weren't really asking, hey, do you think it's a good idea if we run palliative care through home health? They were saying, um, the way that we laid it out in this proposed rule, do you have any other feedback for us given that layout? So to me, um, Kim, that signals that CMS is has make you know, made that decision that they're gonna try to run community-based palliative care through the home health benefit. And um they talked a lot about um how the home health benefit um has the components to support community-based palliative care. For instance, it has skilled clinicians, nursing therapists, um, social worker, et cetera. Uh, and um also they stated that it is their belief that palliative care is provided across the entire Medicare continuum. So they didn't um they're not entertaining rather uh that palliative care is connected to the hospice care benefit or even to end of life. They're really looking at um palliative care as um something that can happen um to a seriously individual, a seriously ill individual um across that Medicare continuum. And there's different pockets in the continuum that would help support that journey. And then when they do get to that six month or less prognosis, then they would um obviously elect their Medicare hospice benefit if they choose to. So they're looking for feedback on expanding access to community-based house uh palliative care um and and considering longer-term policy options as well. So just to reiterate, it they are not um based on the reading I've done and the um home uh the the hospice rule, the proposed um calendar year physician fee schedule where they're asking about um uh uh feedback for community-based palliative care um outside of the hospice benefit. They're not planning to make a palliative care benefit standard with a payment stream. So um I'd love to hear your thoughts

The Homebound Gap And Skill Mix

SPEAKER_00 14:43

on that. I I I have concerns here because I don't I don't know um if a palliative care patient is gonna fit into the box of a Medicare hospice, uh I'm sorry, Medicare home health benefit patient.

SPEAKER_01 15:00

Right.

SPEAKER_00 15:00

Um, for example, the the palliative patient would have to meet all the criteria of home eligibility, i.e. home bout, right? Yeah. So there wasn't any discussion of like carve out or anything like that. So I'd love to hear what your thoughts are about this.

SPEAKER_01 15:18

Well, that was that was my concern also when I first read it. I do remember, and maybe it was the physician fee schedule, you'd know better than me, but uh one of the um proposed rules, they were um they had more specificity around what the components of a palliative care you know program would look like. Um and again, that's not all, you know, apples to apples, but it had more definition. But in this case, carving it or uh including um the palliative care benefit into home health, we know that and palliate and folks that have palliative care programs across the country, community-based, um, not usually their their palliative care program is um is aside from their, it's a separate service line from their traditional Medicare home health benefit because or service line because of the eligibility requirements. And what happens is patients who are you know chronically ill, long-term ill, seriously ill, are on service under the Medicare benefit, home health, and then when they no longer meet eligibility criteria, if they're not homebound, they stabilize, they're not, you know, skilled, you know, uh, medically necessary or part-time intermittent skilled, then then the home health agency has no obligation, has um no option under the Medicare benefit but to discharge the patient from home health. And and many times that's where um a palliative care program will pick up, you know, not necessarily having a payer source, you know, unless they're, you know, um, you know, billing Part B with nurse practitioners or whatever, but um, you know, and we don't get into that component, but they do that to sort of keep patients in the um in on the radar, if you will, until such time they either come back to home health or they end up to your point, um, you know, becoming eligible or and choosing hospice.

SPEAKER_00 17:24

So, you know, and also still seeing that as a gap. You know, it's a gap. Who care?

SPEAKER_01 17:30

Yeah, and the other thing, and I'll say this, because I've been in home health and hospice both for almost 40 years, and um, you know, uh home health nurses are wonderful. I can say that. Um, hospice nurses are also wonderful and have a uh special, more often than not, a very special training and expertise in palliative care, you know, and care and palliation and management of symptoms. I'm not saying that home health nurses cannot or home health clinicians cannot, but um, but it really is, again, just like I agree, you know, CMS is not looking at a carve out, but yet it's uh it's still a specialty. It is a specialty unto itself, you know, to be able to take care of these patients.

SPEAKER_00 18:17

It really

Commenting Strategies And Practical Next Steps

SPEAKER_00 18:18

is. So this is this is where I get on the soapbox just for one moment. CMS is asking for feedback. And um, everyone out there who's listening who is having reservations or even, you know, even if you support it, but you have um some challenges that you would like them to address. This is your opportunity to um respond to CMS to map out um what you think, map out any challenges, um, provide that feedback because you you only get so many um opportunities in a year um to tell CMS what you think, right? And this is a prime opportunity to do that. So I'm really um um asking everyone who's listening to this podcast, if you have um a foot in the palliative care space uh in what you're doing right now, um please, please, please read the detail in that proposed rule about um uh uh dovetailing um community-based palliative care into the home health benefit, and please, please, please provide your comments and feedback. It's really important.

SPEAKER_01 19:30

Absolutely, I agree. And and I would say, you know, to consider, you know, what should additional you know, thoughts for providers to consider right now. Really, um, we always say read the rule, um, you know, look at your own operations and programs to see how the proposed rule provisions will impact these areas. But in this case, this year, it's more than just looking at, you know, most people look at the the um the dollars, right? The payment impacts. Absolutely. And then if there's a major, you know, um change in, you know, uh regulation or um, you know, standards, but um, or you know, uh quality, anything that would impact them operationally. This year, there are just more, you know, these are honestly, these are serious proposals when you're looking at both the program integrity components and certainly as well as you know, palliative care. And they both have the ability to significantly impact the landscape of and the future of home health.

SPEAKER_00 20:37

They really do. And you know, just a couple thoughts attached to that palliative care RFI. Um, you know, things like uh suggesting uh the formation of a technical expert panel or a TEP might be a good suggestion, or even suggesting um could we do a trial run to even see how this would work rather than jumping in two feet with an implementation date. So just a couple ideas off the top of my head uh for uh consideration uh for, and I'm saying for the folks who will reply because we want you to reply, uh, particularly to this RFI. And there are a few other ones in there. Um uh take the time to read through the rule and um uh make your responses and and write a letter. And uh it right at the beginning of the rule, it tells you how to go ahead and file your comments. So, Kim, we have our our listeners out here. So, what they what should they be doing right now?

SPEAKER_01 21:43

Well, again, I think exactly what we said, making sure that they really are taking the time to read this um proposed rule and beyond just the words, if you will, the real implication, um, you know, the potential implication for their for the industry, but really for the uh each provider, you know, individually as well, um beyond the payment impact. I also think that it's important to read in any information that you have. So for example, you, Jennifer, have done a beautiful job with a proposed rule summary, as you do with all of our um all of the CMS notifications, so thank you. Um, you know, and whatever we can read from the industry. And um and again, just listening in. I know we are um there's a we did the the webinar on August 5th, right? We did. Um that was, you know, if people haven't listened in to that, that's uh, you know, again, a little a more in-depth overview uh than what we're talking about today. But I think that reading and and submitting comments, whether it's as you said, whether it's to directly to CMS or through a state or national association, your voice matters. And if comments are not received on a particular topic, CMS will move forward with um generally, will move forward with consideration, um, you know, we even without those comments. So um, although we do expect people to um to respond, um everybody needs to do their part.

SPEAKER_00 23:18

Absolutely, and uh I couldn't agree with you more. Um listen to our uh uh our on-demand webinar. Uh we um do include a more detailed information in that, and then our summary also has that information. So thanks for suggesting, Kim, um, that folks go there and and take a look at that as well.

Final Takeaways And Thanks

SPEAKER_00 23:39

So um, in terms of um wrapping it up, uh we always want to thank you uh out there for taking time out of your day uh to plug into our podcast from Kim, me, and the entire CHAP staff. Stay informed and compliant, stay safe and well, and thanks for all you do.