SimiTree’s CY 2026 Home Health Proposed Rule Webinar Recap: Essential Insights for Agency Survival

On July 8, 2025, SimiTree’s top experts delivered critical insights during our complimentary webinar “CY 2026 Home Health Proposed Rule: Your Essential Update.” Led by Brian Harris, VP of Financial Consulting, J’non Griffin, RN, MHA, HCS-D, HCS-C, HCS-H, HCS-O, COS-C, Senior Vice President of Coding & OASIS, and Mike Brents, PT, DPT, MHA, Managing Director, Technology Consulting, this essential session provided home health leaders with the strategic guidance needed to navigate the industry’s most challenging regulatory environment and the CMS payment cuts proposed.

The webinar (which you can find here) addressed the newly released CMS Calendar Year 2026 Home Health Proposed Rule, focusing on the proposed 6.4% Medicare payment reduction totaling a $1.135 billion cut for 2026. Here are the key takeaways from this critical session. Read the full proposed rule fact sheet now. 

Financial Impact Analysis: The Reality Behind the Numbers

The 6.4% Payment Cut Breakdown

Brian Harris opened the session by explaining the components of the devastating proposed cuts:

  • Permanent Adjustments: A -4.059% rate reduction targeting what CMS views as ongoing overpayments to the home health industry.
  • Temporary Behavioral Adjustments: For the first time since PDGM implementation, CMS is implementing an additional -5.0% reduction designed to “claw back” approximately $5.3 billion in perceived overpayments from previous years.

“CMS has proposed these permanent adjustments every year in the proposed rule, and then, ultimately, especially in the last three rulemaking years, cut it in half come time for the final rule,” Harris explained during the webinar. However, he cautioned attendees against assuming similar reductions will occur this year.

Geographic Variations: Not All Agencies Face Equal Impact

Harris emphasized that the 6.4% figure represents a broad average that masks significant regional variations. “The 6.4% is painting with a really broad brush,” he explained. “You need to dive in and look at your wage indices, look at your case mix, because that could drastically change” the actual financial impact.

The webinar included striking examples of geographic disparities:

  • Santa Fe, New Mexico: Facing a devastating 9.6% decrease in base rates
  • Reading, Pennsylvania: Experiencing roughly break-even rates despite an 8.85% positive wage index adjustment

Operational Changes and PDGM Updates

  • Case Mix and Comorbidity Adjustments
  • J’non Griffin guided attendees through the complex operational changes affecting the PDGM case mix system. Key updates include:
  • Comorbidity Changes: CMS proposes removing five comorbidity categories while adding three new ones, potentially impacting reimbursement for specific patient populations.
  • Functional Scoring Adjustments: Notable changes to functional impairment scoring, including significant point reductions for certain ambulation scores that could affect a substantial portion of home health episodes.
  • Face-to-Face Encounter Policy Updates
  • Griffin detailed important changes to face-to-face encounter policies that will affect how agencies document and justify care plans, emphasizing the need for agencies to review their current documentation processes.

OASIS Updates and Quality Reporting Changes

The webinar covered multiple changes to:

  • Home Health Quality Reporting Program (HHQRP) measures
  • Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAPS) scoring methodology
  • OASIS data collection requirements

Value-Based Purchasing (VBP) Strategies

Mike Brents provided crucial insights on navigating Value-Based Purchasing updates, emphasizing that despite the financial pressures, agencies cannot afford to ignore VBP performance. His presentation outlined multiple measure changes impacting future payment adjustments and provided strategic recommendations for maintaining competitive VBP scores.

Strategic Recommendations for Immediate Action

1. Conduct a Comprehensive Financial Impact Assessment

Harris stressed the importance of understanding your agency’s specific financial impact: “You need to understand the true financial impact to your organization and budget accordingly.” This requires:

  • Branch-by-branch analysis of wage index changes
  • Case mix implication reviews
  • Regional variation assessments

2. Perform Organizational Assessment Now

“Really recommend, now more than ever, perform an organizational assessment, identify both revenue and expense opportunities,” Harris advised during the webinar. “You want to start that now.”

3. Optimize Coding and OASIS Processes

With margins under unprecedented pressure, accurate coding becomes even more critical. The presenters recommended agencies evaluate whether they have adequate resources in-house or need to consider outsourcing these critical functions.

4. Explore Technology Partnerships

Harris highlighted the importance of “exploring technology partners” to help agencies operate more efficiently and manage the challenging financial landscape ahead.

5. Prepare for Value-Based Purchasing Impact

Brents emphasized that agencies must continue investing in quality measures and VBP preparation to protect future payment streams while managing immediate financial pressures.

The Critical Role of Industry Advocacy

A key message from the webinar was Harris’s emphasis on advocacy. Historical patterns of CMS reducing proposed cuts in final rules “only happens through advocacy,” he explained. The industry has until August 30th to submit comments on the proposed rule.

“We need all the perspectives looking at this, we need everyone analyzing the data,” Harris urged webinar attendees. “This advocacy between now and August 30th is going to be crucial to getting CMS to dial back and fully understand the impact that this 6.4% spending decrease is going to have on agencies.”

Home Health Care News (HHCN) reported on June 30, 2025, that industry leaders, including the National Alliance for Care at Home, are concerned this cut could limit access to care, with Dr. Steve Landers stating, “CMS has failed not just our providers, but the millions of Americans who depend on home health services.”  

Technology and Efficiency Solutions

Mike Brents discussed how technology partnerships can help agencies navigate the challenging financial landscape by:

  • Streamlining operational processes
  • Improving documentation accuracy
  • Enhancing quality reporting capabilities
  • Reducing administrative burden
  • Optimizing resource allocation

Key Takeaways for Home Health Leaders

The webinar emphasized several critical points for agency survival:

  1. Geographic Impact Varies: Don’t rely on the 6.4% average – conduct agency-specific analysis
  2. Immediate Action Required: Begin organizational assessments and strategic planning now
  3. Advocacy Matters: Industry participation in the comment period is crucial
  4. Quality Can’t Be Ignored: VBP performance remains critical for future success
  5. Technology Investment: Efficiency improvements are essential for survival

The Bottom Line: Expert Guidance Is Essential

Harris concluded in the webinar, “Even companies that work aggressively to prepare for these changes may not remain unscathed if such deep cuts are implemented.” However, agencies that take immediate action will be best positioned to survive and thrive.

The webinar reinforced SimiTree’s position as the industry’s leading voice in navigating complex regulatory changes. Our comprehensive approach provides the strategic guidance agencies need during this unprecedented crisis.

Next Steps: Don’t Wait for the Final Rule

The webinar’s core message was clear: don’t wait until the final rule is published to begin strategic planning. SimiTree’s experts are ready to help you understand your agency’s specific financial impact and develop a comprehensive survival strategy.

Contact SimiTree today to schedule your organizational assessment:

Our team is standing by to help you navigate the most challenging regulatory environment in home health history. Don’t face these CMS payment cuts alone – let SimiTree’s proven expertise guide your agency through the storm ahead.

For more details on the proposed rule, visit the Federal Register.  

For additional information about the Home Health Prospective Payment System, visit: https://www.cms.gov/medicare/medicare-fee-for-service-payment/homehealthpps and https://www.cms.gov/Center/Provider-Type/Home-Health-Agency-HHA-Center. 

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