July 1, 2026 Washington, DC—Statement from Katie Smith Sloan, president and CEO, LeadingAge, the association of nonprofit and mission-driven providers of aging services, including home health, on the Calendar Year (CY) 2027 Home Health Prospective Payment System Proposed Rule, announced today:

“The 2.4% payment increase and decision to forgo a permanent behavioral adjustment for CY2027—sparing home health agencies from yet one more reduction that would have compounded the financial pressure of recent years—are positive proposals from the Centers for Medicare and Medicaid Services (CMS).

Abstaining from the permanent behavioral adjustment is a direct result of arguments we and our nonprofit and mission-driven members, along with other stakeholders, put forth during the CY2026 rulemaking cycle.

Still, though welcome, these moves do not resolve home health agencies’ underlying financial strain.

The 2.4% update does not fully keep pace with current labor and operating cost pressures, which are keenly felt after years of payment cuts. Compounding this impact is CMS’s proposal to both continue with temporary recoupments and to maintain the permanent behavioral adjustments based on CY2020-22 data—which should be re-examined and CMS should eliminate all permanent and temporary adjustments as a result.

Without further changes, roughly $4.9 billion in temporary adjustment dollars remain to be collected in the coming years, which sets up a grim cumulative financial trajectory for the sector.  And for smaller, rural, and nonprofit providers operating on narrow margins, the prospect of repeated annual temporary reductions raises real concerns about their long-term viability and, in turn, older adults’ future ability to access care in the home.

The rule also makes several proposals related to program integrity focused on provider enrollment, personnel, and more—areas we asked CMS to focus on. We look forward to reviewing these proposals in more detail with an eye toward ensuring targeted efforts that do not overly burden legitimate providers, including our members.

Finally, we are pleased to see a recognition of home health’s role in palliative care delivery and are eager to share with CMS ideas on how to ensure broad access to these critical services.”