The final rule CMS published in the Federal Register on November 9, 2026 is titled as a home health payment update, and it does set 2027 home health rates. Medicare home health payments rise by an estimated 2.4% in 2027, about $415 million. CMS also finalized a 3% temporary cut to the 30-day base rate to start recovering what it calculates as $4.9 billion in overpayments from 2020 through 2025, about $500 million of it in 2027.
The section with the longest reach comes later. CMS-1844-F rewrites a large part of Medicare’s provider enrollment rules in 42 CFR part 424. It adds new reasons to deny an application or revoke an enrollment. It makes the remaining prospective revocation grounds retroactive, and it widens the preclusion list that Medicare Advantage and Part D plans use to block payment. CMS finalized almost all of the enrollment proposals without modification.
A provider’s address can now be a reason for revocation
The new revocation ground at 42 CFR § 424.535(a)(24) lets CMS revoke an enrollment it judges to be a high risk of fraud, waste or abuse because the provider sits in a limited geographic area with an excessive number of providers. CMS described the cases behind it. At least 1,400 new home health agencies have enrolled in Los Angeles County since 2019, and 18 agencies operated from one building in Columbus, Ohio.
CMS deliberately left the key terms undefined. “Limited geographic area” and “excessive number” carry their plain meaning, because a published distance or count would tell bad actors where to enroll instead. CMS does not need to find fraud by the provider or anyone nearby. The revocation runs from the date CMS decides to revoke, not from when the crowding began.
A companion denial ground at § 424.530(a)(19) works at the scale of a single office. CMS may deny an applicant whose practice location is in the same suite or office as a provider that has been revoked or denied. CMS acknowledged that group practices share suites and said a revocation of 1 physician does not automatically block the next physician who joins.
An applicant can now be denied because of a revoked provider in the same suite.
Revocations will usually reach back in time
Under the old default, a revocation took effect 30 days after CMS mailed the notice, with a list of exceptions that took effect earlier. CMS has been lengthening that list for several years, adding roughly 10 retroactive grounds in last year’s rule. The 2027 rule rewrites § 424.535(g) so the remaining grounds are retroactive too. A revocation for noncompliance with enrollment requirements now takes effect on the date the noncompliance began. A revocation for false information takes effect on the date the information was submitted.
That matters because the effective date decides how much money Medicare can recover. CMS estimates the expanded retroactive grounds will move about $82 million a year from providers back to the federal government. Commenters argued that retroactive revocations impose severe and disproportionate costs on legitimate providers. CMS kept the policy.
The other changes extend the same approach.
- Misdemeanors. CMS can deny or revoke for a misdemeanor conviction within the past 10 years related to sexual assault or financial misconduct, including convictions of owners, managing employees, officers and directors. The revocation dates to the conviction.
- Reapplication bar. CMS could already bar a denied applicant from reapplying for up to 10 years when the denial was for false information. The bar now applies to a denial for any reason, with CMS promising to reserve long bars for serious conduct.
- Hospice leadership. A hospice can be denied if its medical director or administrator serves multiple other hospices, works too far away to do the job, or, for the medical director, lacks an active license in the state of practice.
- Identity theft. A new denial ground covers anyone trying to enroll under another party’s identity. Commenters raised no objection.
- Ownership changes. Home health agencies, hospices and DMEPOS suppliers that break the rules on changes in majority ownership can now be denied or revoked for that reason alone.
What changes for health plans
The rule reaches Medicare Advantage and Part D directly through the preclusion list, the CMS list of providers and prescribers whose items, services and drugs plans may not pay for. Until now, the felony category covered convictions of the provider or prescriber. The final rule extends it to felony convictions of an owner, managing employee, managing organization, director or officer.
Plans that load the preclusion list into claims edits can expect more names on it, and some will be entities with no conviction of their own. Network teams should be ready for an existing provider to appear on the list because of an owner’s record.
Retroactive revocations create a second problem for plans. A plan’s credentialing file usually records the date a revocation was discovered, not the date it took effect. When the effective date sits months in the past, claims the plan paid in between may need review against its contracts and against the preclusion list. Plans that check the federal sources monthly will catch the revocation but not the backdated window. We have written that no single exclusion list tells a plan who it can pay, and this rule adds a timing problem to the coverage problem.
The new grounds also point at data plans already hold. A credentialing system knows every practice address in the network. It can flag several hospices in one building, or a new applicant in the suite of a revoked agency, well before CMS acts. The hospice standards match patterns we described in hospice oversight.
None of this tells a plan to drop a provider because CMS might act. The rule gives CMS discretion and leaves its thresholds unpublished, so a plan cannot reproduce CMS’s judgment. A plan can make sure that when CMS does act, its own records show the correct effective date and every claim paid after it.