A Bipartisan Bill Would Reset Home Health Rates for 2027: What the Payment Integrity Act Changes

The Medicare Home Health Payment Integrity and Protection Act could reshape 2027 home health rates and how CMS handles unreliable claims. We explain the bill’s proposed payment reset, PDGM changes, quality reporting consequences, and enforcement provisions. For owners, the immediate priority is to model more than one outcome and keep claims and quality data dependable. Hospice owners will also find a brief note on what this home health specific legislation does not change.

10/15/20268 min read

This article explains how the Medicare Home Health Payment Integrity and Protection Act of 2026 could change 2027 home health rates, PDGM adjustments, quality reporting, and fraud enforcement. It also lays out what owners can model now, what remains uncertain, and why clean documentation matters to both compliance and buyer underwriting.

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Who this is for

Home health owner operators with $2 million to $10 million in revenue
Hospice owners who want to understand whether this legislation affects their services
Owners planning 2027 budgets, succession, or a potential sale

Key takeaways

The bill has been introduced in both chambers, but it is not law. Do not budget on passage.
CMS’s proposed 2027 payment update and the bill’s proposed reset are different paths, not settled rate outcomes.
The bill would suspend specified PDGM behavioral adjustments for 2027 and later years, and protect payment benchmarks from suspect claims.
The proposal also adds screening, survey, quality reporting, accreditation, and enforcement provisions.
Reliable claims and quality data help protect the business operationally and make buyer diligence clearer.

The payment math the bill targets

The proposal responds to concerns that fraudulent or unreliable claims could affect the data CMS uses to calculate Medicare home health payments. In her October 13 announcement, Representative Claudia Tenney pointed to suspicious billing patterns and a concentration of agencies in Los Angeles County. Her release said that county accounted for nearly 10% of nationwide Medicare home health spending in 2024 while representing about 2% of traditional Medicare beneficiaries. It also cited a 39% decline in Medicare home health utilization in NY-24 between 2018 and 2024.

Those figures describe concerns raised by the bill’s sponsor. They do not, by themselves, establish that all claims in a location are fraudulent or explain the causes of utilization changes.

A separate issue is how CMS has calculated adjustments related to the Patient Driven Groupings Model (PDGM). When PDGM and the 30 day payment unit began in 2020, CMS made assumptions about provider behavior, including clinical group coding, comorbidity coding, and Low Utilization Payment Adjustment thresholds. CMS later compared those assumptions with actual spending and applied permanent adjustments.

CMS lists these permanent adjustments:

Quick-Scan Summary

Who this is for

Home health owner operators with $2 million to $10 million in revenue
Hospice owners who want to understand whether this legislation affects their services
Owners planning 2027 budgets, succession, or a potential sale

Key takeaways

The bill has been introduced in both chambers, but it is not law. Do not budget on passage.
CMS’s proposed 2027 payment update and the bill’s proposed reset are different paths, not settled rate outcomes.
The bill would suspend specified PDGM behavioral adjustments for 2027 and later years, and protect payment benchmarks from suspect claims.
The proposal also adds screening, survey, quality reporting, accreditation, and enforcement provisions.
Reliable claims and quality data help protect the business operationally and make buyer diligence clearer.

The payment math the bill targets

Those figures describe concerns raised by the bill’s sponsor. They do not, by themselves, establish that all claims in a location are fraudulent or explain the causes of utilization changes.

CMS lists these permanent adjustments:

What the bill would change

The House bill text has three main payment provisions.

1. Reset the 2027 payment amount using reliable data

CMS would have to establish a revised 2027 standard prospective payment amount within 90 days after enactment. The calculation would start with the 2020 amount and adjust it forward, using a methodology that excludes claims associated with fraudulent, wasteful, abusive, aberrant, or otherwise unreliable billing patterns. It would also account for COVID-19 public health emergency effects and other material circumstances not captured in PDGM’s original behavioral assumptions.

The bill does not state a specific dollar rate in the House text provided. It directs CMS to calculate one.

2. Suspend specified PDGM behavioral adjustments

For 2027 and later years, the bill would prohibit the specified permanent and temporary adjustments used to offset differences between assumed and actual PDGM behavior. This is a proposed statutory change, not a guarantee that every future payment adjustment would disappear.

3. Protect quality and value based benchmarks

For 2027 and later years, CMS would have to exclude or adjust for suspect claims when calculating quality, value based, or benchmarked payment adjustments. The bill defines a suspect claim as one with unreliable data or data from a provider that may have engaged in fraud, waste, or abuse.

The intent is to keep unreliable claims from distorting benchmarks for legitimate agencies. It does not guarantee a particular agency’s score or payment.

Integrity and enforcement provisions

The proposal would also:

Require enhanced screening for agencies CMS determines are at extreme risk of fraud. For covered agencies, the bill includes administrator fingerprinting and proof of comprehensive liability insurance. These screening provisions would begin one year after enactment.
Increase survey frequency for newly enrolled, ownership change, or reactivated agencies, and for agencies with missing quality data or aberrant admission patterns. The House text leaves the survey interval for some newly enrolled agencies blank, so owners should not assume a specific cadence from this draft.
Increase the home health quality data payment adjustment by 15 percentage points for 2029 and later years, while creating a process for a good faith extension of up to 30 days.
Require stronger survey standards and training for accreditation organizations, plus periodic performance assessment and possible corrective action or termination.
Provide specified funding for fiscal years 2027 through 2031: $300 million for CMS program integrity, $150 million for DOJ and HHS OIG enforcement, and $100 million for state survey agencies.
Require a report to Congress within 180 days after enactment on how suspect claims and cost reports affected payments after 2020.
Require notice and comment rulemaking to implement the bill’s provisions.

Where the process stands

The House companion was introduced by Representative Tenney on October 13. The Senate version, S. 5250, was introduced in August by Senators Susan Collins and Marsha Blackburn and referred to the Senate Finance Committee. The Alliance for Care at Home welcomed the House introduction and urged CMS to rescind its proposed 3% temporary adjustment.

Introduction is only an early legislative step. The bill must advance through Congress and become law before its provisions can take effect. Even if enacted, implementation of the payment and integrity changes would require notice and comment rulemaking.

CMS’s proposed rule and the bill are also different approaches. The CMS proposal estimates a 2.4% aggregate increase for 2027, including the proposed payment update and fixed dollar loss change, while also proposing the temporary adjustment. The bill would instead direct CMS to recalculate the 2027 amount using the required data integrity methodology and suspend specified PDGM behavioral adjustments. Owners should not treat either path as final.

What owners should model for 2027

Scenario one: CMS proposal. As a simplified planning illustration, adding the proposed 2.4% aggregate increase and applying the proposed 3.0% temporary reduction points to a roughly 0.6% net decrease before other factors. This is not a finalized CMS net payment forecast. Actual agency results depend on factors such as case mix, geography, and the final rule.

Scenario two: bill enacted. CMS would calculate a revised 2027 amount from the 2020 base using data that excludes specified suspect or unreliable claims, accounts for relevant COVID-19 effects, and suspends the specified PDGM behavioral adjustments. The direction could be materially more favorable than the current proposal, but the final dollar impact cannot be responsibly estimated from the bill text alone.

That uncertainty matters in sale planning, too. For example, $800,000 of normalized EBITDA at an illustrative 5.0x multiple equals $4.0 million. At an illustrative 5.5x, it equals $4.4 million. These are example calculations, not market quotes. A proposed payment change does not automatically change a company’s multiple. But reliable reimbursement records, clear quality reporting, and documented compliance can help a buyer understand earnings and risk without avoidable uncertainty.

Hospice owners should note that this bill is specific to home health payment and enforcement. It does not propose hospice rate changes. Hospice has separate compliance requirements, including election documentation, so hospice operators should continue to manage their own rules rather than assume this proposal applies to them.

What owners should do now

Model both the current CMS proposal and the possible bill reset. Keep assumptions separate and label them clearly.
Confirm OASIS and Home Health Quality Reporting Program submissions are complete and timely. The proposed 15 percentage point increase to the quality data payment adjustment for 2029 and later years makes reporting a material compliance priority.
Track the bill’s progress in the House and Senate, and consider sharing operational feedback through industry associations.
Monitor CMS’s proposed 3.0% temporary adjustment and the Alliance’s request that CMS rescind it.
Keep claims, clinical records, coding support, quality data, and ownership information accurate and organized. Clean claims can help protect reimbursement data and simplify buyer diligence.

Plain-Language Glossary

PDGM: The Medicare payment model for home health that groups patients based on characteristics such as clinical needs.
Behavioral adjustment: A payment change tied to differences between CMS’s assumptions about provider behavior and what claims data later showed.
Temporary adjustment: A proposed payment reduction or increase used to address retrospective differences in estimated spending.
FDL: Fixed dollar loss, a factor used in calculating outlier payments for unusually costly care.
HHQRP: Home Health Quality Reporting Program, which requires agencies to submit specified quality information.
APU: Annual Payment Update, the yearly update to home health payment rates. Quality reporting affects the update.
Suspect claim: A claim the bill would define as having unreliable data or data from a provider that may have engaged in fraud, waste, or abuse.
HHVBP: Home Health Value Based Purchasing, a model that links some payment adjustments to performance.
Recalculation: A new payment calculation using a specified starting point and methodology.
Normalized EBITDA: An estimate of ongoing earnings adjusted for items that are not expected to continue under a new owner.

So what should you do now?

Build a two scenario 2027 budget and avoid treating proposed legislation as enacted policy.
Assign an owner for quality data deadlines and keep proof of submission.
Review claims and documentation for consistency before they become part of your financial or compliance record.
Prepare a concise summary of payment exposure and open compliance issues for succession or buyer diligence.

Considering a sale or partnership?

Senate Healthcare LLC is the buyer and strategic partner pursuing home health or hospice agency acquisitions. We are not a broker or advisor. If you are considering a sale, succession, or partnership, we welcome a confidential conversation about a potential acquisition and the steps that could reduce risk and support a clearer outcome. Your agency does not need to be perfectly positioned today to start that discussion.

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