CMS Proposes 2027 Funding Increase for Medicare Home Health in Pivot From Prior Multi-Year Austerity

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CMS Proposes 2027 Funding Increase for Medicare Home Health in Pivot From Prior Multi-Year Austerity

Equity Research

1 July 2026 | 10:23PM EDT

HEALTHCARE SERVICES

CMS Proposes 2027 Funding Increase for Medicare Home Health in

Pivot From Prior Multi-Year Austerity

On July 1, 2026, CMS released the CY2027 Home Health Prospective Payment Scott Fidel

+1(212)902-7304 | scott.fidel@gs.com

System (HH PPS) proposed rule, which combines a more favorable reimbursement Goldman Sachs & Co. LLC

outlook for Home Health providers with a broader set of Medicare program integrity Sarah Conrad

initiatives focused on fraud, waste, and abuse (link, link, link). The proposal would +1(212)357-2448sarah.conrad@gs.com|

increase aggregate Medicare payments to Home Health Agencies by 2.4%, or Goldman Sachs & Co. LLC

Valentine Vlasovapproximately $420 million, representing a long-awaited pivot from the negative +1(212)934-0210 |

proposed updates issued over the last several years and reflecting CMS’ decision not valentine.vlasov@gs.comGoldman Sachs & Co. LLC

to implement an additional permanent PDGM behavioral adjustment in CY2027.

While CMS continues to pursue recoupment of historical PDGM-related

overpayments through a proposed 3.0% temporary adjustment, the agency

estimates aggregate Medicare payments to HHAs would still increase by

approximately $420 million under the proposal, or 2.4%.

In our view, the proposal is incrementally supportive financially for stocks in our

coverage providing Medicare Home Health services: BTSG, HUM, UNH.

HUM and UNH invested to scale Medicare Home Health during a multi-year period of

negative funding from CMS. We view the proposed funding increase as providing

opportunity for modest margin expansion in their Home Health platforms in 2027,