Home health care billing is experiencing yet another change, this time in the form of legislation designed to address past payment reductions.
Leaders in charge of home health billing services will benefit from familiarizing themselves with the background of this legislation and the responses of major organizations. We’ve compiled this information to assist you in your strategic planning and revenue cycle optimization.
The Home Health Stabilization Act of 2025
The bipartisan Home Health Stabilization Act of 2025 (H.R. 5142) [1], introduced in the House of Representatives on September 4, 2025, by Kevin Hern (R-OK) and Terri Sewell (D-AL), represents a significant legislative impact for home health care billing and home health care coding.
This proposed law directly confronts substantial payment reductions embedded within the Centers for Medicare & Medicaid Services’ (CMS) Calendar Year 2026 Home Health Prospective Payment System (HPPS) proposed rule. The legislation compels the Secretary of Health and Human Services to enact a special provision for 2026 and 2027. This provision would require a positive payment adjustment to the standard Medicare fee-for-service rate. It would completely negate the proposed permanent -4.059% adjustment and the temporary -5% adjustment slated for 2026. It would also prohibit any analogous behavioral adjustments for the 2027 calendar year. The bill freezes the national, standardized 30-day payment rate at the 2025 level, incorporating a protective upward adjustment and barring further negative modifications for two years.
The Act also contains a stipulation that the additional payments resulting from this action be excluded from CMS’s calculations of actual expenditures, preventing the agency from implementing future cuts to recoup funds.
This action lands as the industry anticipates the final rule’s publication following a comment period that attracted over 950,000 submissions. For organizations providing home health billing services, this act represents potential protection from financial instability.
LeadingAge Is in Favor of the Change
LeadingAge, representing nonprofit aging service providers, speaks positively of the legislation [2]. President and CEO Katie Smith Sloan thanked the representatives. “We appreciate that Representatives Hern and Sewell recognize both providers’ need for relief from these looming reductions and the importance of older adults’ and families’ ability to continue to access care. This legislation relieves payment pressure, short-term, and ensures the time needed to work toward a sustainable solution. We wholeheartedly support it.”
Sloan says that the proposed Medicare cuts endanger all providers and disproportionately impair mission-driven members. “Home health agencies deliver critical services that help older adults in healthcare recovery or ongoing aging in place. The deep cuts in Medicare fee-for-service payment currently proposed threaten beneficiaries’ access to care and all providers’ viability–and may have a disproportionate impact on our nonprofit and mission-driven provider members by eroding their ability to serve as safety net partners, to accept complex referrals, and to maintain essential community services like vaccination programs.”
The National Alliance for Care Urges Swift Action from Congress
The National Alliance for Care at Home vigorously supports the Home Health Stabilization Act, characterizing it as a necessary defense against devastating payment cuts [3]. CEO Dr. Steve Landers criticized the payment reduction proposal and praised the senators.
“The 2026 home health payment proposal is the most egregious yet, using an approach rife with issues to impose a 9% cut, amounting to $1.135 billion in reduced home health payments next year. CMS must reverse course and correct its calculations to reflect clear and objective feedback already provided by the home health community. CMS should focus on addressing localized fraud and abuse that distorts the payment system and undermines legitimate patient care. The agency has the full authority to fix these errors, and Congress strongly urges CMS to act. But given what’s at stake for Medicare beneficiaries and the overall function of the Medicare program, Congress cannot stand still. The Alliance celebrates the exceptional leadership of Representatives Kevin Hern (R-OK) and Terri Sewell (D-AL) who today introduced the Home Health Stabilization Act of 2025, bipartisan legislation that would halt home health cuts in 2026 and 2027 and provide time for CMS and Congress to work with stakeholders to correct methodological errors, combat fraud, and strengthen access to home health at this critical moment for our health system.”
The Alliance continues to compel Congress to rapidly pass this essential legislation to protect the entire ecosystem of home health billing services in the USA.
The American Hospital Association Offers its Support
The American Hospital Association (AHA) has also offered a positive response on the bipartisan Home Health Stabilization Act [4]. The AHA cautioned that without congressional relief, the planned cuts will persistently endanger essential services for millions of Medicare beneficiaries.
They say that the two-year pause proposed in H.R. 5142 delivers indispensable stability for home health agencies. This stability empowers agencies to maintain operations, retain their workforce, and continue providing high-quality care, which is fundamentally supported by accurate home health coding and billing. This endorsement from national hospital leadership underscores the interconnected nature of the healthcare system, where instability in one sector, like home health, creates significant downstream pressures on hospital RCM services and other functions.
Preparing Home Health Billing Services for Change
Volatility in home health care billing makes it essential for providers to stabilize their operations and anticipate reimbursement shifts. As you prepare for potential impacts of the Home Health Stabilization Act, the priorities are clear:
- Strengthen compliance and documentation workflows that support accurate home health coding.
- Evaluate gaps in claims submission, denials prevention, and revenue-cycle monitoring – areas most sensitive to CMS policy changes.
- Ensure your teams or partners can rapidly adapt to updates in home health billing services in the USA, especially as 2026-2027 payment policy evolves.
3Gen Consulting supports providers with end-to-end home health billing services, from eligibility verification to credit balance resolutions. Whether you’re preparing your internal teams or evaluating partners to support your home health care billing efforts, we’re here to help stabilize your revenue cycle during this period of change.
References
[1] United States Congress, “H.R.5142 — 119th Congress (2025-2026),” 4 September 2025. Available: https://www.congress.gov/bill/119th-congress/house-bill/5142/text.
[2] K. Barnett, “House Bill Would Delay Devastating Proposed Cuts To Home Health Payments,” LeadingAge, 5 September 2025. Available: https://leadingage.org/house-bill-would-delay-devastating-proposed-cuts-to-home-health-payments/.
[3] National Alliance for Care at Home, “Bipartisan Home Health Legislation Introduced to Protect Medicare Beneficiaries and Lower Medicare Costs,” 4 September 2025. Available: https://allianceforcareathome.org/bipartisan-home-health-legislation-introduced-to-protect-medicare-beneficiaries-and-lower-medicare-costs/.
[4] American Hospital Association, “AHA supports House bill pausing home health cuts for two years,” 3 November 2025. Available: https://www.aha.org/news/headline/2025-11-03-aha-supports-house-bill-pausing-home-health-cuts-two-years.
