The 2026 Home Health Final Rule: Fraud, Compliance, and What Agencies Must Fix Now

As home health agencies prepare for 2026, CMS is turning up the heat on fraud, compliance, and enforcement—and the consequences are more serious than ever.

In this episode of Gravity Healthcare Hacks, host Melissa Brown, COO of Gravity Healthcare Consulting, is joined by Devin Kassi, VP of Home Health Operations, for a critical follow-up discussion on the Home Health Final Rule. This time, they dive deep into Medicare’s expanded authority around fraud investigations, retroactive payment recoupment, and why even unintentional missteps can put agencies at risk.

Melissa and Devin unpack:

• How CMS is redefining and enforcing fraud
• Why documentation errors can trigger massive repayment demands
• The growing importance of homebound status documentation
• How weak processes, outdated technology, and lack of education create dangerous blind spots
• What agencies must do now to protect themselves and remain viable

This conversation is a must-listen for home health leaders—especially smaller and single-location agencies—who want to understand what’s coming and how to adapt before it’s too late.

Because in today’s regulatory environment, doing nothing is the biggest risk of all.

Transcript

Melissa Brown:
Hello, everyone. Welcome to the podcast. I’m excited to have Devin Kassi, Vice President of Home Health Operations, joining me again for a follow-up conversation on the Home Health Final Rule as we head into 2026.
Devin, thank you so much for being here today.

Devin Kassi:
As always, Melissa, I’m happy to be here and really looking forward to this conversation.

Melissa Brown:
Last month, we talked about the reimbursement cuts coming with the Final Rule and how agencies can prepare. We also discussed HHCAHPS.
Today, we want to dive into a different—and very serious—topic: the increased focus on fraud.
Devin, can you walk us through what’s in the rule and what agencies need to be paying attention to?

Devin Kassi:
Absolutely. There are some significant changes related to fraud and enrollment as we move into 2026. Medicare is really honing in on waste and fraud, and they want to ensure agencies are following the Conditions of Participation—not just every three years during a survey, but every single day.

One of the biggest changes is that if Medicare identifies fraud, they can retroactively go back to the point where that issue began and recoup all associated payments. That is huge for agencies.

This means agencies must take a hard look at their processes and ensure they are truly following the COPs and regulations. Something as basic as having appropriate physician orders sounds simple, but you’d be surprised how many agencies do not have valid orders to even initiate care.

Then you have to ask: once you have those orders, are you initiating care timely? Are you starting services within 48 hours when required? If Medicare audits and identifies a pattern—even if it’s just one or two examples—they can go back and extrapolate from there. That can result in massive repayment demands.

Another critical area is homebound status. It’s not enough to document homebound status at the start of care or on the face-to-face encounter. Clinicians must document homebound status on every single clinical note. Each visit must support that the patient continues to meet the criteria for home health services.
This has always been a focus area, but with Medicare’s expanded authority, the risk to agencies is now much greater.

Melissa Brown:
I really don’t think the danger here can be overstated—especially for smaller, single-location agencies. This could end your agency permanently if you’re not careful.

I would strongly caution agency owners to seek outside help to truly assess compliance and identify risks early. Fraud sounds like a scary word, but many cases aren’t intentional. They’re often the result of inherited practices—“this is how we’ve always done it”—or a lack of education.

Unfortunately, Medicare doesn’t care about intent. If they identify something as fraud, even if it was an oversight, they can demand repayment and shut an agency down.

What do you think we’re going to see happen, Devin?

Devin Kassi:
I think agencies that don’t have the right processes, education, and technology in place are going to be the most impacted.

Education is critical—not just for leadership, but for clinicians as well. Everyone needs to understand the COPs, their role in compliance, and how their documentation impacts the agency as a whole.

Agencies also need strong internal compliance and auditing systems. That means reviewing intake processes from the very beginning. Do you have the correct orders? Is face-to-face documentation in place? While agencies technically have 30 days after SOC to obtain a face-to-face, best practice is to have it upfront whenever possible to ensure coverage.

Technology plays a huge role here as well. Are you using OASIS scrubbing? Are workflows monitored and completed on time? In most EMRs, there are task lists with specific deadlines. If those tasks are overdue, you’re likely out of compliance.

CMS sets these timeframes intentionally. And once they identify one problem, it can quickly snowball into significant repayment demands.

And while we’re talking about CMS because this is a CMS Final Rule, it’s important to remember that commercial payers follow similar patterns. Compliance needs to be consistent across all patients.

If your agency doesn’t have a compliance team or regular compliance meetings, that’s something you need to implement now. Many of these issues are fixable—but only if they’re identified early.

Melissa Brown:
I want to expand on your homebound example because it’s a really important one.

Some agency owners might hear this and think, “Okay, I’ll just tell my clinicians to always check the homebound box.” That is not the answer—and that can very quickly become fraud.

We see this all the time. Patients are documented as homebound when they clearly do not meet the criteria. Clinicians must be educated not only on when someone is homebound, but also when they are not.

Agencies need policies and procedures for transitioning patients off home health when they no longer qualify—whether that’s outpatient therapy or another level of care. Just because someone started on home health doesn’t mean they should remain there indefinitely.

Yes, transitioning a patient may reduce short-term reimbursement, but that is far better than facing millions—or tens of millions—of dollars in repayments due to statistical extrapolation.

Devin Kassi:
Absolutely. Those are excellent points.

Melissa Brown:
We only have a few minutes left. Anything else you want to share as agencies prepare for 2026?

Devin Kassi:
My biggest advice is to use your resources. There are experts who can look at your agency holistically and help you identify risks and solutions. This Final Rule doesn’t impact just one department—it affects the entire agency.

And this won’t stop in 2026. It won’t stop in 2027 or 2028. Agencies have to adapt.

Home health is the future of healthcare. We’re going through a challenging period right now with reimbursement changes, but demand will continue to grow as the senior population expands. People want to stay in their homes.

With advancing technology and strong operational foundations, agencies that adapt will thrive. But those that don’t will not survive.

Melissa Brown:
I couldn’t agree more. The only real mistake agencies can make right now is doing nothing.

We’re operating under a different administration with a very different focus. In my opinion, CMS is intentionally trying to weed out low performers and agencies that can’t rise to the occasion.

Don’t let that be your agency. Make the decision today to take action—not just to survive, but to thrive.

Devin, thank you so much for joining us today. And to our listeners, remember: it’s not just what you know, but how you apply it that makes all the difference.
 We’ll see you next time.