ASP-RCM Home health agency billing services.

Medicare pays on a national standardized 30-day period rate, adjusted for case mix and for area wage differences. The case-mix adjustment comes from five categories: admission timing, admission source, clinical grouping, functional impairment level and comorbidity adjustment. Those five produce 432 home health resource groups, because there are 12 clinical groups, two timing values, two admission source values, three functional impairment levels and three comorbidity categories. Each group carries its own case-mix weight, and CMS recalibrates those weights annually. The single most useful thing an agency can know about this structure is that three of the five categories are written by its own clinicians and coders, and only two come from the claims system.

Since CY 2022 an agency submits one Notice of Admission that establishes the period of care and covers every contiguous 30-day period until the patient is discharged. It is timely only if it is submitted within 5 calendar days of the start of care, so a start of care on January 1 requires the NOA on or before January 6. If it is late, the wage and case-mix adjusted 30-day period payment is reduced by one thirtieth for each day from the start of care date until the date the NOA is submitted. The penalty is counted back to the start of care, not forward from day 6. The reduction cannot exceed the total payment of the claim, those days are provider liability, and the agency may not bill the beneficiary for them. On a LUPA period, no payment is made at all for days before the NOA is submitted.

A low utilization payment adjustment applies when a 30-day period does not reach the visit threshold for its payment group. The threshold is not one number across the benefit. CMS sets it at the 10th percentile of visits for that specific payment group, or two visits, whichever is higher, so it varies across the 432 groups and is re-evaluated annually against the most recent utilization data. If the threshold is met, the period is paid the full case-mix adjusted 30-day amount. If it is not, Medicare pays national per-visit rates based on the disciplines that provided the care instead. That makes the threshold a scheduling control rather than a billing one, because once the period closes there is nothing left to correct.

The CY 2026 final rule revised 42 CFR 424.22(a)(1)(v)(A) so that the encounter may be performed by a physician, a nurse practitioner, a clinical nurse specialist or a physician assistant as defined at 42 CFR 484.2, or a certified nurse-midwife as defined in section 1861(gg) of the Act where state law authorizes it. CMS also removed the paragraph that had confined the encounter to the certifying practitioner outside a narrow facility exception. CMS was clear that this adds flexibility only. The documentation must still relate to the primary reason the patient needs home health services, the certifying practitioner must still sign and date it, the practitioner performing it must not have a financial relationship with the agency, and the certification cannot be completed after the patient is discharged.

Because one of the five case-mix categories is scored entirely from the OASIS. The functional impairment level comes from responses to items M1800 through M1860 and M1033, which earn points that sum into a score, and the score places the period into a low, medium or high level. CMS designed those levels so that roughly a third of the periods in each clinical group fall into each one. A clinician who under-documents ambulation, transferring or bathing therefore moves a genuinely high-impairment patient into a lower-paying group, and the agency delivers the care the patient actually needs against the payment for a patient who needed less. Nothing downstream in billing can recover that, which is why OASIS review before lock is a revenue control and not a quality formality.

CMS estimates a net decrease of $220 million, or 1.3 percent, in aggregate CY 2026 home health payments. That figure is a 2.4 percent payment update, less 0.9 percent from the permanent behavior adjustment, less 2.7 percent from the temporary adjustment, and less 0.1 percent from the updated fixed dollar loss ratio. The impact is not uniform. CMS estimates a 2.0 percent impact for agencies with fewer than 100 periods of care and 1.1 percent for agencies with more than 1,000, because the temporary adjustment applies to the case-mix adjusted 30-day payment and not to LUPA periods. An agency with a high LUPA share does not experience the average.