952,000 Comments Deluge CMS, Urge Bigger Picture View Of Home Health Headwinds

Last Wednesday, I reported on the public comment window closing for the home health proposed rule. My headline read “CMS Faces Flood Of Comments Opposing 2026 Home Health Payment Rule.”

That flood turned into a deluge.

At the time my initial story was published, over 10,000 comments had been submitted. The total number of comments sent to CMS before the window closed on Friday, per the Federal Register, was a whopping 952,483.

This figure is vastly higher than my personal expectations – and those of industry insiders. Dr. Derrel Walker, chief medical officer at the Pennant Group (Nasdaq: PTNG), previously told me he expected tens of thousands of comments. Walker’s expectations ended up getting supersized.

Industry workers, agency executives and owners, family caregivers and Medicare beneficiaries were among those who came out en masse to protest the proposed rule. This is one of the few instances in which I’ve covered such strong congruence between the interests of workers and companies – everyone involved in the home health field understands what is at stake.

The suggestions included in some of the notable comments on the rule paint a picture of an alternative reality to the one implicit in CMS’ proposed rule, and show a potential path forward that goes beyond just softening the impending rate cut.

They also highlight that the implications of this rule go far beyond home health providers. The diabetes care and durable medical equipment industries were also extremely outspoken, demonstrating the interconnectedness of home health with other health care industries.

In this week’s exclusive, members-only HHCN+ Update, I’ll share insights from the comments and offer analysis and key takeaways, including:

– The alternative paths industry insiders are pushing CMS toward

– What the home health rule means for other industries

Recommendations from the industry

While the home health industry hopes that CMS’ final rule will be softer than its proposed rule, comments on the Federal Register go beyond harm reduction. Organizations recommended that CMS re-examine its calculation methods, take Medicare Advantage trends into account and rethink its approach to budget neutrality.

Home health saves money, is the refrain from industry insiders. Comments therefore suggest that the mathematical basis on which CMS made its proposed rule was flawed and must be corrected.

The National Alliance for Care at Home (the Alliance), for instance, stated that CMS’ calculations were “deeply flawed” for a slew of reasons. The organization cited issues, including the fact that data from 2022 and beyond does not represent behavior changes due to PDGM and instead “unrelated policy changes and market disruptions.”

Dallas-based Homecare Homebase, one of the largest technology and administrative services companies serving home-based care, offered a data analysis rooted in its large client base, representing 47% of the industry. This analysis shows that home health agencies have not reacted to PDGM in the way that CMS assumes, the company wrote.

“If providers were altering their coding behavior in the way CMS suggests, we would expect to see higher-paying Clinical Groups trending upward over time relative to lower-paying Clinical Groups,” the Homecare Homebase comment stated. “However, when we examined the trends, we found no significant shifts in Clinical Group composition. In fact, the two highest-paying Clinical Groups, Wound and MMTA Endocrine, each showed a slight decline between 2016 and 2024.”

The Alliance also stated that the data included suspicious claims likely to be fraudulent while excluding crucial data.

Comments specifically focus on fraudulent practices in California. LeadingAge said in its letter that it believes that fraudulent home health agencies in Los Angeles County had an outsized impact on payments compared to national trends.

“LeadingAge implores CMS to conduct analysis into the home health agency growth in Los Angeles County, California, assessing and publicly reporting the real and ongoing potential impacts on the aggregate adjustments since the implementation of PDGM and HHVBP,” the letter read. “Given this administration’s focus on crushing fraud, waste, and abuse, we sincerely hope these concerns will not go unanswered for another rule-making cycle, endangering more honest providers and their community’s access to services.”

The Alliance also reported that CMS’ forecasts for the market basket increase for the upcoming payment year have underestimated price growth, serving as a “second significant cut to payments on top of the already devastating permanent adjustments that CMS has applied.”

The Alliance’s letter to CMS also states that the organization found “several legal and technical issues” in previous proposed rules that CMS has not yet addressed.

“In addition to addressing our concerns regarding its calculations used for determining the permanent adjustments and temporary adjustments dollar amounts, CMS needs to adjust its calculations of the temporary adjustment dollar amounts to reflect the reduction in Medicare fee-for-service enrollment of over 11% between 2019 and 2024,” the letter read. “Finally, lower payments on the fee-for-service side produce savings in Medicare Advantage through reduced benchmarks, creating a scenario where CMS collects more than the aggregate dollars it has determined for temporary adjustments.”

The American Hospital Association (AHA) recommended that PDGM budget neutrality reductions be suspended until CMS reevaluates its methodology and “more appropriately account[s] for expected changes in payment that are not due to provider behavior.”

In addition to criticizing CMS’ mathematical basis, comments raise questions about the role of Medicare Advantage. While out of scope of the proposed rule, which focuses only on traditional Medicare, comments suggest that CMS cannot ignore the other threats to home health reimbursement.

“Despite delivering equivalent levels of care and achieving similar outcomes, providers are not being compensated adequately for Medicare Advantage services,” Homecare Homebase’s letter read. “Providers have historically relied on higher Traditional Medicare margins to offset Medicare Advantage shortfalls. However, with Medicare Advantage surpassing Traditional Medicare in volume and ongoing Medicare rate cuts, this cross-subsidization model is no longer sustainable. Home health providers are continuing to deliver high-quality care, but the economics are becoming increasingly unfavorable: more work, less pay, same results.”

Homecare Homebase also cited data from its client base showing other “disconnects between CMS’s perception and provider realities” – for instance, regarding declining referrals linked to staffing shortages, as well as revenue stagnation in the midst of inflation. Home health revenue per day has increased 13% since 2018, while inflation has increased 27%, according to Homecare Homebase’s analysis.

The alternate reality implicit here is that if CMS keeps in mind the entire ecosystem of pressures facing the home health industry, the organization would reframe its approach to the fee-for-service rate and mitigate the pressures of Medicare Advantage and other headwinds.

I should also mention that some changes in the proposed rule were generally supported by industry comments, though sometimes with requests for clarification or caveats. These items include: the removal of the COVID-19 vaccination measure, the removal of the social determinants of health (SDOH) items from the OASIS assessment and the proposed regulation change to the home health face-to-face encounter.

What else is at stake

The proposed rule would rock the home health industry – but the submitted comments reveal the breadth of the rule’s impact.

The rule would be an “asteroid” for the durable medical equipment (DME) industry.

The rule would expand the types of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) included in a competitive bidding program that has been paused by CMS since 2021, according to HHCN’s sister publication, HME Business. Supplies like urological supplies, ostomy supplies and tracheostomy supplies would now be included in the bidding program. That would limit the number of suppliers of these items and impose downward pressure on reimbursement rates, according to comments on the proposed rule.

Glucose monitors (CGMs) and insulin infusion pumps are also proposed for competitive bidding, leading to a host of comments regarding the necessity of these supplies for diabetes care.

The home health reimbursement cut itself would have dramatic ripple effects on other industries.

As one commenter wrote: “It only makes sense to keep home health as viable as possible to help keep costs down as compared to facility costs. Cuts to home health would ultimately produce MORE facility care, as services would have to be sought from those options if home health is not available.”

The AHA wrote that the proposed cuts to the home health base payment rate are “staggering” and that, as home health agencies’ capacities are diminished, hospitals end up with few options when discharging patients.

“This magnitude of cuts would compound ongoing access challenges for beneficiaries needing [home health] (HH) care and potentially also disrupt operations for acute care and other hospitals,” the AHA’s letter read. “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.”

The extended implications of the rule are far from good news. Patients recorded their fears about losing needed medical supplies, and advocates from other industries clarified why the rule would impact their operations too. Clicking through the comments demonstrated to me how far-reaching this rule would be if it passes in a similar iteration to which it was proposed.

But it also shows that the industry is giving itself the best possible chance of shaking out a change from CMS – or perhaps driving through legislative remedies like the bill introduced today, which seeks to halt the cuts to home health payments. Pennant’s CMO suggested to me that CMS designed the proposed rule to test the response, and that with a dramatic enough response, they could see the light and change their investments.

With a comment list over 900,000 long, it’s hard to imagine that CMS will not take note.