AHA Comments on CMS’ CY 2026 Home Health PPS Proposed Rule

August 28, 2025

The Honorable Mehmet Oz, M.D.
Administrator
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850

Submitted Electronically

Re: Medicare and Medicaid Programs; Calendar Year 2026 Home Health Prospective Payment System (HH PPS) Rate Update; Requirements for the HH Quality Reporting Program and the HH Value-Based Purchasing Expanded Model; Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program Updates; DMEPOS Accreditation Requirements; Provider Enrollment; and Other Medicare and Medicaid Policies
90 Fed. Reg. 29,108 (July 2, 2025).

Dear Administrator Oz:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations, including approximately 1,000 hospital-based home health (HH) agencies, our clinician partners — more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to comment on the Center for Medicare & Medicaid Service’s (CMS’) calendar year (CY) 2026 HH prospective payment system (PPS) proposed rule.

The AHA is very concerned about CMS’ proposed budget neutrality reductions to the HH base payment rate, which, at a combined -8.4%, are staggering. This magnitude of cuts would compound ongoing access challenges for beneficiaries needing HH care and potentially also disrupt operations for acute care and other hospitals. As explained further below, HH agencies are key partners to hospitals in Medicare beneficiaries’ recoveries, and they help ensure patients can receive the right care in the most appropriate setting. Hospitals rely on HH agencies for safe and timely discharge of patients and to avoid extended hospital stays. We urge the agency to suspend its proposed cuts and take steps to ensure HH agencies receive adequate and timely payment updates that enable them to continue to care for Medicare beneficiaries.

HH AGENCY PAYMENT UPDATES

HH agencies are an essential part of the Medicare care continuum. However, CMS’
market basket forecasting has underpaid HH providers to the tune of nearly $1 billion
annually in recent years, and the productivity adjustment has reduced that figure even
more. In addition, the budget neutrality adjustments previously applied and now further
proposed by CMS would curtail the ability of HH agencies to meet the demands of
patients. Further, Medicare Advantage (MA) prior authorization practices are delaying
hospital discharges, causing capacity issues for acute care hospitals.

For these reasons, the AHA urges CMS to take steps to ensure access for patients and avoid further strain on hospitals and the entire care continuum. Specifically, the AHA recommends that CMS:

• Reassess and refine the HH market-basket construction and forecasting
  approach, including independent review of IGI’s methodology and greater
  transparency of key inputs.
• Re-examine the magnitude of the productivity adjustment and its impact on
  Medicare payments.
• Suspend Patient-Driven Grouping Model (PDGM) budget neutrality
  reductions until CMS can reevaluate its methodology and more
  appropriately account for expected changes in payment that are not due to
  provider behavior.
  • Address the harmful practices of MA plans that restrict acute care hospital
  capacity and delay access to timely post-acute care.

HH Agencies’ Role in the Continuum of Care. HH agencies enable hospitalized beneficiaries to return home and still receive medically necessary skilled nursing, therapy and other services. This reduces pressure on hospitals and institutional post-acute settings, avoids readmissions, keeps costs down and, most importantly, keeps beneficiaries healthy on the road to recovery. Indeed, nearly 1 in 5 acute care hospital beneficiaries are discharged to HH.

There is robust evidence that timely HH care improves outcomes and reduces downstream costs. An analysis of 2024 Medicare claims by CareJourney by Arcadia shows that among patients referred to HH, those who did not receive HH services had a significantly higher readmission risk than referred patients who did receive care (see figure below). In addition, as shown below, patients referred to and receiving HH care had a 41% lower mortality rate within 90 days of discharge than those who were
referred but did not receive care.

View the detailed letter below.