ASHA Advocacy Mitigates the Impact of Medicare Cuts to Home Health Agencies
December 19, 2025
The Centers for Medicare & Medicaid Services (CMS) issued the final rule for home health payment updates effective January 1, 2026. CMS dramatically reduced the proposed cut to the industry—by about 5%—thanks to advocacy by ASHA and other stakeholders. Instead of the proposed 6.4% reduction to home health payments for 2026, CMS elected instead to reduce payments by just over 1%, leading to a reduction in spending for these services of approximately $220 million when compared to 2025 payments.
Ongoing Evaluation of Coding and Payment Changes
CMS is legally required to ensure budget neutrality—meaning payments to the sector cannot increase if there are behavioral changes made in response to implementation of the Patient Driven Groupings Model (PDGM). Since PDGM was implemented, payments to home health have increased significantly while clinical service provision and costs have decreased, leading to payments in excess of cost by more than 30% for the last several years. Federal law requires CMS to recoup these funds. CMS has slowly done so since 2021 and will potentially do so through 2026.
However, in official comment letters CMS received, stakeholders suggested that other factors beyond PDGM implementation drove behavior change within the industry and, therefore, CMS could not impose the full reductions to the home health sector. CMS then acknowledged it could only reduce payments for calendar years 2020–2022 but would consider proposing additional adjustments after a further analysis of claims and Outcome and Assessment Information Set (OASIS) data for services provided from 2023 through 2026.
While ASHA recognizes that budget neutrality protects taxpayer and Medicare beneficiary dollars, we have continued to raise concern that the blunt, across-the-board payment reductions CMS has proposed in the last several years do not achieve our mutual goals of ensuring access to care and payment adequacy. Instead, these reductions lead the home health sector to further reduce service delivery to reduce cost at the expense of people’s health. ASHA continues to monitor the impact of payment reductions on our members’ employment and their patients’ access to care.
Changes to the Home Health Quality Reporting Program (HH QRP)
Despite ASHA's objections, CMS finalized the removal of four items associated with social determinants of health (SDOH); one item for Living Situation (R0310); two items for Food (R0320A and R0320B); and one item for Utilities (R0330) beginning with the CY 2026 HH QRP.
It also removed the COVID-19 Vaccine: Percent of Patients Who Are Up to Date measure and the corresponding Outcome and Assessment Information Set (OASIS) data element.
This rule also finalized changes to the reconsideration policy to allow providers to submit a request for reconsideration of an initial determination of noncompliance if they can demonstrate compliance.
Expanded Home Health Value-Based Purchasing (HHVBP) Model
CMS updated and shortened the Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) survey. These changes affect the survey questions used to calculate three measures that are currently used in the expanded HHVBP Model. Due to the finalized changes to the HHCAHPS survey, CMS is removing these three HHCAHPS survey-based measures:
- Care of Patients;
- Communications Between Providers and Patients; and
- Specific Care Issues.
CMS also finalized the addition of four measures to the applicable measure set. This includes three OASIS-based measures:
- Improvement in Bathing;
- Improvement in Upper Body Dressing; and
- Improvement in Lower Body Dressing.
It also includes one claims-based measure: Medicare Spending per Beneficiary for the Post-Acute Care (PAC) Setting.
What’s Next
The policies finalized in this rule are applicable to services provided on or after January 1, 2026. ASHA remains committed to tracking policy changes through the annual rulemaking process to ensure these policies do not impede our members’ ability to provide and be paid for the services they provide to Medicare beneficiaries.
Resources
Find more information about the Medicare Home Health Prospective Payment System on the ASHA website.
