[00:00:02] Speaker A: You're listening to Home Health Revealed, where the business of home health comes to life. Hosted by Hannah Vail, each episode brings real conversations with the leaders, innovators and experts shaping the future of the industry. From reimbursement and technology to leadership and growth, this is Home Health Revealed.
[00:00:20] Speaker B: Hey. Hey, everybody.
It is here. The 2027 home health final rule dropped today, November 4th, and it runs 447 pages.
So you don't have time to read 447 pages. Here is the short version that I'm going to give you. This is Home Health Revealed. I started the day. I don't know about you, it's a Wednesday.
I started the day just out crazy. And then we were looking through our CD stuff for the California announcement and then clicked over and holy moly, saw that. Lookie, we have the final rule that just.
So let's, let's jump right in and get started here.
All right, so here is the short version. Your rates go up a little. The big cut everyone was bracing for never actually showed up. And a few deadlines got tighter. So stay with me. By the end, I think you'll know exactly what to do before January 1st.
Every year, CMS puts out the Home Health Payment rule, and it sets what Medicare pays you and the rules you play by for the next year. This year, the proposal came out in July.
Agencies send in their comments.
We've had a lot going on this year, but now we have a final version. So let's walk through it, hopefully in plain English. I've got my eggnog right here. It's just an eggnog latte. Don't you worry. I'm obsessed with them right now. If you live in the Midwest and can get your hands on some Brahms eggnog, put a couple shots of espresso, steam that Brahms eggnog or whatever eggnog you've got around and throw it in a coffee cup. Put some whipped cream and cinnamon on the top and it's fantastic. That's what I'm enjoying right this moment on my desk.
So the headline. Let's go with the headline. Headline is this. CMS estimates home health payments to go up 2.44% in 2027. And that's about $415 million more across the country. But that number comes from two pieces.
First, a 2.1% payment update for inflation, about a 0.3% bump from a change to outlier payments, which I'll talk more about in a minute.
How does that compare to July?
So July it's basically the same. The proposed also said 2.4% and about 420 million. So the final rule is in line with what we expected.
And that's good news. No surprises in real dollars. The national base rate for a 30 day period goes from $2,038 this year to $2,092.69 in 2027. So that's roughly $55 more per period. Before your and case mix weight one important rule that 2.4% is a national average. Your agency's number is going to depend on where you are, your patient mix. How many of your periods end up as LUPAs or outliers, CMS says. So in the rule itself, what are the big changes?
1. No new permanent cuts the 3% temporary cut stays For a few years now, CMS has been taking money back because it believes PDGM overpaid agencies when it started in 2020.
There are two kinds of cuts here. A permanent cut lowers your base rate for good.
A temporary cut is a one year clawback. For 2027, CMS did not add a new permanent cut, so that's a relief. But CMS did keep a 3% temporary cut in place, the same size as this year. CMS says it still wants to recover about $4.9 billion it believes was overpaid through 2025.
This 3% cut is expected to recover about 500 million of that. So what does that really mean for your agency?
Because the 3% cut was already in your 2026 rate, it doesn't make 2027 any worse than 2026. But it's not going away soon. So plan your budget like these. Clawbacks will keep coming for years is my opinion.
Second, outliers get easier to reach. An outlier payment is extra money for very expensive periods of care, like a patient who needs far more visits than usual. CMS lowered the bar to qualify.
The number that sets that bar, called the fixed dollar loss ratio, drops from 0.39 to 0.29.
So what does this mean for your agency? It means more of your high cost periods may now qualify for extra payment. Make sure your visits are documented and billed correctly so that you can actually capture that Third lupa. LUPA thresholds shift a little. A LUPA is a low utilization payment. If a 30 day period has too few visits, you get paid per visit instead of the full period rate.
CMS updates those visit thresholds every year. For 2027, 10 payment groups dropped by one visit and one group went up by one visit. So if for your agency. Update your thresholds in your EMR and or check with your EMR and see if those are getting updated and your scheduling tools. Make sure those are updated by January 1st.
Don't let an old number in your system. Create a loopa that you don't need in your life.
Coding and Comorbidities the list got bigger when your coders list secondary diagnoses.
Certain combinations earn a comorbidity adjustment, which is a little more payment for a little more complex patients.
CMS updated those groups in July. It proposed 2021 low comorbidity groups and 100 high comorbidity groups. With newer data, the final rule lands 22 low groups and 103 high combinations.
CMS also updated the case mix weights and the functional scoring levels so this means the coding rules that drive your payment change on January 1st. So your coders need the 2027 tables accurate. Complete secondary diagnoses matter more than ever.
Your OASIS deadlines I want you to circle this, get your highlighter out, whatever it takes.
But this is the one that I want you to note today. You have about four and a half months after each quarter ends to submit and correct your OASIS Data.
Starting with 2027 data that drops to the 15th day of the second month after the quarter ends. So that's about 45 days.
So for January through March of 27, your Oasis data must be in and corrected by May 17, 2027.
CMS also moved the OASIS reporting period for your annual payment update to a full calendar year.
Data from July through December of 2026 is a transition period.
Remember why this matters. If you don't meet the quality reporting rules, your payment Update is cut by 2 percentage points for 2027. That turns a 2.1% raise into a 0.1% raise. That's not exact numbers crossboard. But what this means really is that you can't let OASIS corrections pile up anymore. Build in a weekly OASIS review and submission routine. Now Preparing for that 2027 quickly approaching day, Medicare enrollment is getting stricter.
CMS added new reasons to deny or revoke a Medicare enrollment. It also expanded when a revocation can be made retroactive back to an earlier date and after a denial for any reason, not just false information, CMS can now bar a provider from reapplying for a period of time.
So keep your enrollment information, current ownership, managing staff, address addresses, all of it. Small paperwork problems can now have a much bigger consequence.
A quick word on what is not in here. There are no new changes to the Home Health Value based purchasing model. This year CMS only talked about lining it up with quality reporting down the road and this rule does not change. Review Choice Demonstration we covered California's RCD launch in our last episode, so go back and listen to that one literally last meeting earlier today. If I get this published this evening.
So what changed from the proposal? Honestly, not much and in this business that's a win. The overall increase stayed at the 2.4%, the 2.1% update held. The 3% temporary cut was finalized even though many commenters asked CMS to drop it.
The outlier change was finalized as proposed and the OASIS deadline change was finalized also as proposed. So the main difference is in the coding tables with newer claims data. The final rule added a few more comorbidity groups than July's version had so then, what is your to do list before January 1st? I love a to do list. I love to mark things off of a list. I am a list person.
So your to do list. Here is what I would start and I would start it this week. 1.
Update your EMR and billing software with the 2027 rates, case mix weights, LUPA thresholds and comorbidity tables. If you are working with an emr, which you probably are, I'm hoping Ask them when it's going to be updated and then when they're going to be testing it to get your coders trained on the 2027 comorbidity groups or make sure your coding company is aware that there are comorbidity group changes coming.
Then I would audit a sample of charts in January to make sure that it's working right at the beginning of January as soon as that switchover takes place.
3. Set up a weekly OASIS submission and correction process.
Your first new deadline is May 17th and you want to be ahead of it. You do not want to be chasing that.
Fourth, rebuild your 2027 budget now with your own numbers. Use your wage index, your patient mix, your LUPA rate. Don't just plug in a national 2.4%. You want to get as specific and granular as possible.
5. Review your Medicare enrollment record. Make sure everything on file matches what's in reality today.
Ownership addresses the things that I mentioned.
And finally, you know, get yourself some eggnog and celebrate the holiday season.
So that's the 2027 home health final rule. A small raise. No new permanent cut. More room for outliers, new coding tables and tighter OASIS deadlines. If any of this feels like a lot, it feels like too much.
You are not alone and you don't have to do it alone. We help with coding at Health Rep Partners. Home health operations is what we do every day. We help agencies with coding with OASIS review, billing and revenue cycle review, choice demonstration, pre claim reviews and getting everything ready. So if you just want a second set of eyes on how 2027 hits your agency, you can reach out to
[email protected] we'd love to help.
Thanks for listening to Home Health Revealed. Take care of yourselves, take care of your patients.
