CY2027 home health final: 22 low and 103 high comorbidity subgroups, plus a 3% temporary cut

On November 9, 2026, the Federal Register published the CY2027 Home Health Prospective Payment System (HH PPS) final rule, CMS-1844-F, at 91 FR 72022. CMS had released the fact sheet on November 4, 2026. The HH PPS and HH Quality Reporting Program provisions take effect January 1, 2027. For home health coders, the part that touches your desk is the recalibrated Patient-Driven Groupings Model (PDGM): the comorbidity subgroups, LUPA thresholds, and case-mix weights all change.

How the PDGM comorbidity adjustment uses secondary diagnoses

Each 30-day home health period can earn a comorbidity adjustment based on the secondary diagnoses reported on the claim. CMS describes three outcomes in the final rule. A period gets the low adjustment when one reported secondary diagnosis falls in a subgroup on the home health comorbidity list. It gets the high adjustment when two reported secondary diagnoses form one of the listed interaction pairs that use more resources together than apart. Otherwise, it gets no comorbidity adjustment.

That's why secondary-diagnosis completeness matters on home health claims. A condition that's documented but never coded can't move the period into a comorbidity tier.

CY2027 comorbidity subgroups: 22 low and 103 high

CMS proposed 21 low subgroups and 100 high interaction subgroups in the CY2027 proposed rule. Using more complete CY2025 claims and linked OASIS data, the final rule lands on 22 low and 103 high subgroups for CY2027. CMS posted both lists as a download on the CMS-1844-F regulations page.

The low list includes heart failure; dysrhythmias such as atrial fibrillation and atrial flutter; type 1, type 2, and other specified diabetes; diabetes with neuropathy; paraplegia, hemiplegia, and quadriplegia; stroke sequelae; and stage 2 through 4 and unstageable pressure ulcers. Several high interactions pair a mood or anxiety disorder group with a pressure ulcer or non-pressure chronic ulcer group.

LUPA thresholds, case-mix weights, and functional levels

CMS recalibrated the PDGM case-mix weights, functional impairment levels, and LUPA thresholds with CY2025 claims. The LUPA update lowers the threshold by one visit for ten case-mix groups and raises it by one visit for one group. The final thresholds, HIPPS codes, and case-mix weights are in the case-mix weights and LUPA thresholds file on the CMS-1844-F page.

In the rule, CMS also notes that the ICD-10-CM mappings behind the home health grouper's clinical groups and comorbidity adjustments are previewed in the proposed rule and finalized in the final rule. CMS says each grouper release is available for beta testing about 6 to 8 weeks before it takes effect.

Rates: a 2.1% update and a 3.0% temporary cut

CMS finalized a 2.1% home health payment update. Agencies that don't submit the required quality data get 0.1% instead (2.1% minus 2 percentage points). CMS also finalized a temporary 3.0% reduction to the CY2027 national standardized 30-day payment rate. That continues recovery of what CMS calculated as overpayments for CYs 2020 through 2025 tied to PDGM behavior assumptions. CMS didn't propose another permanent adjustment for CY2027.

Those behavior assumptions include comorbidity coding and clinical group coding, which CMS set in the CY2019 rule. In plain terms, CMS keeps measuring how coding patterns changed after the PDGM started. Accurate, supported secondary diagnoses are the coder's part of that picture. CMS estimates that aggregate payments rise 2.4%, or about $415 million, once the lower fixed-dollar loss ratio is included.

DMEPOS replacements, infusion pumps, and enrollment

The rule also reaches past home health. A new face-to-face encounter isn't required for a DMEPOS replacement item, which CMS defines as an item under the same HCPCS code as the original. A new order is still required, and an audited claim still needs the original encounter documentation. If the item changes because the patient's condition changed, the usual face-to-face rule still applies.

CMS also expands the DME benefit to certain external infusion pumps and home infusion drugs for items furnished on or after April 1, 2027. On enrollment, CMS is making all revocation grounds retroactive and adding new grounds to deny or revoke enrollment. Check the HCPCS details in the CMS files, since HCC Buddy's tools cover ICD-10-CM diagnosis codes only.

What this means for diagnosis coding outside home health

The PDGM comorbidity list is a home health payment grouping. It isn't the CMS-HCC risk adjustment model, and this rule doesn't change Medicare Advantage HCC mappings. Still, conditions like heart failure and diabetes with neuropathy sit on the CY2027 low comorbidity list and are also conditions risk adjustment coders track, so clear, specific documentation helps on both sides. Use the Code Book and encoder to confirm the ICD-10-CM code, and the ICD-10 to HCC lookup when the same chart also feeds an MA submission.

For related CY2027 coverage, see the January 2027 home health consolidated billing HCPCS update (CR 14639) and the CY2027 ESRD PPS final rule.

What to do before January 1, 2027

Download the CY2027 low and high comorbidity lists and the case-mix weights and LUPA thresholds file from the CMS-1844-F page. Compare them with your CY2026 references and update any internal tip sheets that flag secondary diagnoses for the comorbidity adjustment. Ask your billing vendor when it will load the CY2027 home health grouper. And brief your DME team on the same-HCPCS replacement rule and the April 1, 2027 infusion pump date.