Home Health: Proposed 2027 rate highest since 2022

Research evidence excerpt

Home Health: Proposed 2027 rate highest since 2022

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Home Health

Proposed 2027 rate highest since 2022

Price Objective Change

Proposed rate of +2.4%, much better than 2026 cut 02 July 2026

The proposed 2027 Medicare rate update for home health of +2.4% is much better than Equity

the -1.3% net cut in 2026 and positive for providers. CMS did not propose an additional United States

permanent behavioral adjustment and maintained the temporary recoupment at -3%, HC Facilities

unchanged from 2026. Assuming finalized as proposed, 2027 would represent the Joanna Gajuk

highest rate update since 2022. While the net update is below the cost inflation, it’s Research Analyst

much better than the -1% to +1% updates the last four years and positive for BTSG, BofAS+1 646 855 3961

where home health represents approximately 7% of revenue, and ADUS, where home joanna.gajuk@bofa.com

health represents approximately 5% of revenue. We raise our PO for BTSG from $66 to Kevin Fischbeck, CFA

Research Analyst

$77 on a higher multiple (23.0x 2026E EBITDA vs 20.0x prior) to reflect the better BofAS

outlook for home health rates and reiterate our Buy rating as we continue to view its +1 646 855 5948

kevin.fischbeck@bofa.com

Oncology Pharmacy as the fastest growing business in our coverage.

Craig Jones

BofASNo behavior adjustment proposed +1 646 743 2020

CMS did not propose an additional permanent behavior adjustment for 2027 (after -1% craig.jones3@bofa.com

cut in 2026, -1.98% in 2025, -2.9% in 2024, and -3.9% in 2023), noting that changes in Joaquin Arriagada Martinez

provider behavior may not be all directly attributable to PDGM implementation, echoing Research Analyst BofAS

its comments included in the 2026 reg. +1 646 855 1654

joaquin.arriagadamartinez@bofa.com