The proposed cut to payment rates for Medicare Fee for Service (FFS) payment rates for home health services included in the Centers for Medicare and Medicaid Services (CMS) Calendar Year (CY) 2026 Home Health Payment System Rate Update is deep: 9%. The impact, when combined with the 8.8% payment reductions the agency has imposed since CY2023, will be significant to all providers of home health care–but nonprofit providers are particularly at risk. We’ve developed a multi-pronged advocacy strategy to fight against the cuts. Find two assets (Nonprofit Talking Points for LeadingAge members and the Protect Home Health explainer, created in partnership with the National Alliance for Care at Home) for use in these efforts here.

Following the Centers for Medicare and Medicaid Services’ (CMS) June 30 release of the proposed CY2026 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Requirements Proposed Rule, we provide a summary and analysis of the rule’s major components here.

The Centers for Medicare and Medicaid Services (CMS) on June 30 released the CY2026 Home Health Proposed Rule that will make an aggregate -6.4% cut to the base payment. CMS is proposing a -4.059 percent permanent adjustment to the CY2026 home health base payment rate. Additionally, the temporary adjustment which has been accruing over the last several years now stands at $5.3 billion. If this were to be taken back in a single year it would be a 35% reduction to the base payment, which CMS considers too much of a burden. Therefore, the agency is proposing to apply the first temporary adjustment in CY2026 with an additional -5.0 percent on top of the proposed -4.059 permanent adjustment. The minuscule market basket update for CY2026 is proposed at only 3.2 percent. More here.

“The 6.4% cut to the current rate that the Centers for Medicare and Medicaid Services (CMS) proposes for home health providers will, if implemented, be a death knell for many quality agencies,” said LeadingAge president and CEO Katie Smith Sloan in a statement following the rule’s June 30 release.

Senators Susan Collins (R-ME) and Marsha Blackburn (R-TN) in June 2025 sent a letter to Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz raising concerns about the future of the home health benefit and asking CMS to use its statutory authority to pause any planned cuts in the CY2026 Home Health Proposed Rule.