CMS finalized the CY2027 Home Health payment rule on November 4, and the headline is the part everyone wants to hear: CMS estimates aggregate Medicare payments to home health agencies will rise 2.4 percent over 2026, in line with what it proposed in July. The temporary 3 percent PDGM adjustment sticks around too, so the raise comes with the same recoupment agencies have been working around all year.

The base rate is set, and nobody on your team gets a vote on it. What you do control is whether each period lands in the case mix group your patient belongs in. That's where margin lives, and this rule makes it matter more.

What CMS finalized on payment

Per the CMS fact sheet, the 2.4 percent estimate, about $415 million, is built from a 2.1 percent payment update ($365 million) plus roughly 0.3 percent from an updated fixed dollar loss amount ($50 million). CMS also finalized a temporary adjustment of negative 3.0 percent to the national standardized rate, which continues recouping what it calls overpayments for 2020 through 2025. There's no new permanent adjustment this year.

What didn't change

In the provisions CMS summarized, the rule doesn't establish new OASIS assessment requirements or new coding rules. The most immediate operational impact is the recalibration of PDGM payment parameters, so that's where readiness work should start.

Recalibrated weights put accuracy in the spotlight

CMS also finalized recalibrated case mix weights for all 432 PDGM payment groups, along with updated LUPA thresholds, functional impairment levels, and comorbidity adjustment subgroups, all using CY2025 data. Every one of those moving pieces gets applied to what's in your documentation: the primary diagnosis, the secondary diagnoses, M1033, and the M1800-series items.

If any of those are off, a period lands in a different group, with a different weight and a different LUPA threshold, which is the risk we break down in How Coding Accuracy Actually Protects Against LUPA Risk. A missed secondary diagnosis can't earn an adjustment it was never coded for, a pattern we cover in PDGM Comorbidity Adjustments: What Agencies Consistently Miss. Referral packets can run hundreds of pages, so those diagnoses are easy to overlook. Olli's clinical AI reads the whole packet, finds the relevant secondary diagnoses, and helps get them in a compliant, revenue-maximizing order, then a certified expert coder makes the final call.

Retroactive revocations raise the stakes on documentation

The enrollment provisions deserve just as much attention as the rates. CMS finalized a policy making all Medicare enrollment revocation grounds retroactive to the date the provider's noncompliance began, instead of 30 days after notice. The agency says that will help it recover money paid to noncompliant providers, and CMS estimates it will save taxpayers about $82 million a year. For a well-run agency, the practical takeaway is that a documentation or compliance gap can carry a longer financial tail than it used to, which ties directly into the audit pressure we've been tracking.

CMS also finalized that home health agencies and hospices with certain changes in majority ownership must reenroll in Medicare as a new provider and undergo a survey or accreditation, which matters if a sale is on your horizon.

Reporting changes worth a quick look

CMS finalized new assessment data submission deadlines starting with the CY2027 Home Health Quality Reporting Program year, and moved OASIS and HHCAHPS reporting for the payment update to a full calendar year. Those are timeline changes, with no new assessment requirements and no HHVBP-specific changes. Clean, timely OASIS submission still protects your payment update.

Make PDGM readiness a priority now

Don't wait for January claims to show you the impact. Review your coding and OASIS workflows against the finalized PDGM parameters now. Start by modeling the net impact on your own mix of payment groups instead of relying on the 2.4 percent average. Then check where your documentation is thinnest: secondary diagnosis capture, M1033, and the M1800-series items are the places where small misses move a period into a different group. Finally, make sure whoever reviews your charts catches these before claims go out, since fixing an error after billing costs more.

Protect reimbursement and improve margin

Margin has two levers, and Olli works on both. The first is protecting reimbursement. When every secondary diagnosis, M1033 response and M1800-series item is captured accurately, periods land in the groups your patients belong in. That's what our hybrid model is built for: clinical AI and automation do the exhaustive first pass, certified expert coders make the call, and expert QA checks the result. That accuracy also gives you documentation you can defend as CMS's compliance focus grows.

97.5 overall accuracy score

Across 2,522 retrospective QA reviews. See the full numbers in our Q3 2026 accuracy report. We publish them every quarter, and if your current vendor won't show you theirs, that tells you something.

Here's what that accuracy looks like in practice. Over the past year, across our customers, Olli found and fixed:

• 7 OASIS errors per chart, on average

• 2 of those 7 were M1800 items

They were items that were incorrect or undercoded, the kind that can lead to a claim denial or leave revenue on the table. After those corrections, customers saw:

+7% improvement in functional scores

+8% improvement in CMI

The second lever is cost. Olli comes in at roughly half the cost of a legacy vendor, with turnaround measured in hours instead of days. One customer put it this way:

"I've been consistently pleased working with Olli Health. They are responsive, my coding and QR costs are down over 50%, and my case mix is up. What else could I want?"

Brandon, President, Interim Healthcare of Albuquerque

We'd love to show you what our combination of AI and certified expert coders can do with a 30-day, low-risk pilot you can opt out of at any time.

Try Olli