CMS Proposes Stricter Medicare Enrollment Rules to Combat Home Health Fraud

The Centers for Medicare and Medicaid Services (CMS) has released its 2027 proposed payment rule for home health agencies, a move that underscores the agency's commitment to combating fraud and ensuring quality care for seniors. The proposal includes an aggregate payment increase of $420 million, or 2.4%, based on a 2.1% payment update and a 0.3% increase related to the fixed dollar loss ratio. However, beyond financial adjustments, the rule introduces stringent anti-fraud measures that could reshape how providers operate.

The proposed rule seeks to strengthen Medicare program integrity by making all enrollment revocations retroactive and expanding CMS’s authority to deny or revoke enrollment for providers and suppliers linked to compliance violations. This comes as part of a broader effort under the Trump administration to tackle fraud, waste, and abuse in the home health and hospice sectors.

Strengthening Program Integrity

In May, the Trump administration announced a six-month moratorium on new enrollments for hospice and home health agencies, a data-driven decision aimed at targeting a key source of fraud activity. This followed an earlier announcement of a similar moratorium on durable medical equipment, prosthetics, orthotics, and supplies companies. These actions highlight the growing concern over fraudulent practices within these sectors and the need for robust regulatory measures to protect both patients and taxpayers.

The proposed rule also includes updates to payment methodologies, case-mix weights, outlier payments, and quality reporting requirements. CMS is seeking feedback on expanding access to home-based palliative care, a move that could significantly benefit patients with serious illnesses by providing more comprehensive support in their homes.

For context, the top 10 nonprofit health systems have seen a collective increase in operating revenues from fiscal 2024 to 2025 of 7.7%, down slightly from the previous year's 10.6% increase. This trend indicates that while revenue growth is slowing, healthcare providers are still facing significant financial challenges and opportunities.

What Comes Next

The proposed rule represents a critical step in enhancing the integrity of Medicare’s home health program. If implemented, these changes could lead to more stringent oversight and potentially fewer instances of fraud. However, they also raise concerns about the potential impact on legitimate providers and their ability to serve vulnerable populations.

As CMS moves forward with this proposal, it will be crucial to balance the need for fraud prevention with the necessity of ensuring that seniors continue to receive high-quality, accessible care. Public comments on the proposed rule are due by September 15, 2026, providing an opportunity for stakeholders to voice their opinions and shape the final regulations.

The coming months will be pivotal in determining how these changes will affect both the home health industry and the patients who rely on it. Stakeholders, including healthcare providers, patient advocates, and policymakers, will need to engage actively to ensure that the final rule meets its intended goals while minimizing unintended consequences.