MedPAC Recommends 7% Cut To 2027 Home Health Payment Rate

WASHINGTON—The Medicare Payment Advisory Commission (MedPAC) released a draft report recommending that Congress reduce the Medicare base payment rate for home health care services for calendar year 2027 by 7%.
This report comes shortly after the Centers for Medicare & Medicaid Services (CMS) announced a final rule in which home health agencies would receive a 1.3% cut to their 2026 Medicare payment rates. 

The 14-page report, titled “Assessing Payment Adequacy and Updating Payments: Home Health Services,” is an overview of home health care use and homecare spending under Fee-for-Service (FFS) Medicare. MedPAC based its draft recommendation on four indicators of home health payment adequacy measures including beneficiaries’ access to care, quality of care, access to capital and Medicare payments and costs. 

Information in the report included:

• Home health aides (HHAs) declined by 1% in 2024
• 97% live in a zip code with two or more HHAs
• FFS Medicare per capita volume increased
• The projected FFS Medicare margin for 2026 is 19% compared to the 2024 margin of 21.2%
• FFS Medicare beneficiaries’ risk-adjusted discharge to community rate was stable

MedPAC said the 7% cut would have “no adverse effect on access to care” as well as “continued provider willingness and ability to treat fee-for-service beneficiaries.”