CMS opens new doors at home: Palliative care, home infusion, and DMEPOS changes in HH PPS proposed rule

The calendar year (CY) 2027 Home Health Prospective Payment System (HH PPS) proposed rule offers an important glimpse into the Centers for Medicare & Medicaid Services’ (CMS’s) evolving vision for home-based care. Beyond the annual payment rate updates, CMS uses the proposed rule to advance several policy initiatives affecting home health agencies; durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) suppliers; home infusion providers; manufacturers; and healthcare investors. Most notably, CMS signals strong support for the continued expansion of community-based palliative care through the existing Medicare home health benefit and proposes to implement a statutory expansion of Medicare coverage for certain home infusion therapies. CMS also proposes new DMEPOS accreditation, reporting, and supply-chain transparency requirements that reflect its continued emphases on program integrity and operational oversight. The proposed rule was published in the Federal Register on July 6, 2026, and comments are due by 5:00 pm EDT on August 31, 2026. If you have questions about the proposed rule or would like assistance preparing and submitting comments to CMS, please contact a member of the McDermott Will & Schulte team.

This client alert highlights the proposed rule’s key DMEPOS, home infusion, and palliative care proposals. The proposed rule also includes significant provider and supplier enrollment provisions that would expand CMS’s authority to deny and revoke Medicare enrollments. For a detailed discussion of those enrollment and program-integrity proposals, please see our companion client alert.

DMEPOS Updates

CMS proposes several policy and operational changes affecting DMEPOS suppliers, home infusion providers, manufacturers, and other participants in the home-based care market. The proposals are notable because they pair efforts to expand beneficiary access to certain home-based services (most significantly through the proposed implementation of the statutory expansion of Medicare coverage for certain home infusion therapies) with measures designed to enhance accreditation oversight, supplier reporting obligations, and supply-chain transparency. Collectively, these proposals reflect CMS’s broader objective of supporting care delivery in the home while increasing visibility into the entities, products, and operational processes that support that care. For providers, suppliers, and investors, the proposals may create both new reimbursement opportunities and additional compliance, reporting, and governance considerations across the DMEPOS and home infusion industries.

Expanded DMEPOS accreditation authorities (42 CFR § 424.58)

CMS proposes several revisions to the DMEPOS accreditation requirements that are intended to strengthen oversight of CMS-approved accrediting organizations (AOs) and improve the consistency of accreditation-related reporting. While the proposals would principally affect AOs rather than DMEPOS suppliers directly, they reflect CMS’s continued emphasis on program integrity and may contribute to increased scrutiny of supplier compliance activities and accreditation processes. The proposed changes include:

• Accreditation status reporting timeline (42 CFR §§ 424.58(c)(1)(xxiii)(D) and 424.58(e)(5)(i)). CMS proposes to revise the reporting deadline applicable to AOs that terminate, revoke, withdraw, or amend a DMEPOS supplier’s accreditation status. CMS would remove the current requirement that AOs report such actions within three business days and instead require reporting within five calendar days. CMS explains that this change would align the provision with the existing reporting timeframe in § 424.58(e)(5)(i) and eliminate confusion resulting from the use of different deadlines for substantially similar reporting obligations.
• Fraud, waste, and abuse reporting requirement (proposed 42 CFR § 424.58(c)(1)(xxiii)(N)). CMS proposes to establish a formal reporting timeframe for suspected fraud, waste, and abuse identified by AOs. Under the proposal, an AO would be required to notify CMS (and, where appropriate, law enforcement) within three calendar days after determining that fraud, waste, or abuse may have occurred, consistent with the AO’s CMS-approved definitions of those terms. CMS notes that although AOs are already required to maintain processes for identifying and reporting these activities under § 424.58(c)(1)(xxii), the regulations do not currently specify when such reporting must occur.
• Conflict-of-interest disclosure requirements (proposed 42 CFR § 424.58(c)(1)(vii)(D)(4)). CMS also proposes to expand the conflict-of-interest disclosure requirements applicable to AOs. While current regulations require AOs to maintain policies and procedures addressing conflicts of interest involving surveyors and accreditation decision-makers, CMS notes that the regulations do not expressly require AOs to disclose existing conflicts to CMS. The proposal would require AOs to identify any current conflicts of interest described in § 424.58(c)(1)(vii)(D)(3) and explain how and when those conflicts will be resolved.

Although these proposals would not directly alter DMEPOS supplier enrollment standards or accreditation requirements, they would increase CMS’s visibility into AO operations and may lead to more rigorous oversight of supplier accreditation activities. For DMEPOS suppliers, providers, and investors operating in the sector, the proposals continue a broader trend of CMS enhancing transparency, reporting, and governance expectations throughout the Medicare supplier oversight framework.

Clarification of DMEPOS encounter requirements for identical replacement items (42 CFR § 410.38; 42 CFR § 414.210(f))

CMS proposes to clarify that the face-to-face encounter requirements in 42 CFR § 410.38 do not apply when a beneficiary receives a replacement DMEPOS item that falls under the same HCPCS code as the item being replaced. Under current policy, certain DMEPOS items appearing on the Required Face-to-Face Encounter and Written Orders Prior to Delivery List require a documented face-to-face encounter within the six months preceding the written order. CMS explains that, where an identical replacement item is furnished because of loss, theft, irreparable damage, or expiration of the equipment’s reasonable useful lifetime under 42 CFR § 414.210(f), requiring a new clinical examination to collect the same beneficiary-specific information regarding an already-established medical need is unnecessarily burdensome and duplicative.

Accordingly, CMS proposes to clarify that a replacement item furnished under the same HCPCS code as the original item would require a new order reaffirming medical necessity, but would not require a new face-to-face encounter. Importantly, the proposal would not apply where the beneficiary is receiving a different item because of a change in medical condition or other circumstances resulting in a different HCPCS code, in which case the existing face-to-face requirements would continue to apply. CMS also emphasizes that the proposal would not alter any other applicable coverage, documentation, national coverage determination, or local coverage determination requirements. For DMEPOS suppliers and referring practitioners, the change could reduce administrative burden associated with routine replacement items while preserving the requirement that ongoing medical necessity be established through a new order.

Expansion of DME benefit for infusion pumps and drugs (42 CFR § 414.202)

CMS proposes to implement § 6222(a) of the Consolidated Appropriations Act, 2026, by expanding the Medicare Part B durable medical equipment (DME) benefit to cover certain external infusion pumps, associated home infusion drugs, and related supplies that previously would not qualify as DME because they failed the “appropriate for use in the home” requirement in 42 CFR § 414.202. Historically, CMS has interpreted this requirement to mean that the equipment must be capable of being safely and effectively used by the beneficiary or caregiver without the assistance of a healthcare professional. As a result, certain infusion therapies requiring professional involvement have not qualified for DME coverage even when furnished in the beneficiary’s home. Effective April 1, 2027, Congress directed that specified infusion pumps and associated therapies be treated as satisfying this requirement when certain statutory conditions are met, and CMS’s proposal would implement that expansion. Under the proposal, certain external infusion pumps, home infusion drugs, and related supplies would be deemed to satisfy the “appropriate for use in the home” requirement when the following conditions are met:

• Administration by or under the supervision of a qualified healthcare professional. The US Food and Drug Administration (FDA)-approved prescribing information for the drug must require administration by or under the supervision of a healthcare professional. CMS proposes to limit this category to physicians, nurse practitioners, physician assistants, clinical nurse specialists, and registered nurses licensed in the state where the infusion occurs. CMS further proposes that the healthcare professional must be physically present in the home to administer or directly supervise the infusion, and specifically omits licensed practical nurses and licensed vocational nurses from the definition. CMS cites patient safety concerns and the potential for serious infusion-related adverse events as justification for these limitations.
• Qualified home infusion therapy supplier involvement. The infusion must be administered or supervised by a qualified home infusion therapy supplier, as defined in 42 CFR § 486.505, in a safe and effective manner within the beneficiary’s home.
• Frequency of administration requirements. Consistent with § 1861(n)(3) of the Social Security Act, the FDA-approved prescribing information must indicate that the drug is administered at least 12 times annually. CMS proposes to interpret this standard as requiring administration at least once per month and notes that it is not currently identifying additional drugs that would qualify under the statute’s separate infusion-rate criterion.

CMS states that the proposal is intended to expand beneficiary access to certain clinically appropriate home infusion therapies while preserving safeguards for drugs that may involve significant safety risks. The proposal may create new reimbursement opportunities for home infusion providers, suppliers, and manufacturers of infusion-related products, particularly for therapies that historically fell outside the DME benefit solely because professional supervision was required in the home setting. At the same time, the proposal’s supervision, staffing, and supplier-participation requirements may create operational and compliance considerations for providers seeking to furnish these expanded services.

DMEPOS competitive bidding program

CMS proposes to revise the DMEPOS competitive bidding program (CBP) information collection requirements by requiring DMEPOS CBP contract suppliers to report the country of origin for the lead items furnished during the contract period. Currently, contract suppliers submit Form C to report product information, including the manufacturer name, model name, and model number for the lead item they intend to furnish. CMS proposes to add a new country-of-origin field to Form C and would publish the reported information in the Medicare supplier directory alongside the product information already available to beneficiaries and other stakeholders. CMS explains that the proposal is intended to increase transparency by allowing beneficiaries and interested parties to identify the country from which a DMEPOS item originated. Under the proposal, suppliers would determine the country of origin primarily through product markings required under US Customs and Border Protection regulations, including the country-of-origin marking requirements in 19 CFR Part 134. Where a product is exempt from marking requirements, suppliers may need to obtain supporting documentation from manufacturers or distributors, such as manufacturer certifications, commercial invoices, bills of materials, manufacturing process descriptions, customs entry documentation, or Harmonized Tariff Schedule classifications. As with existing Form C reporting requirements, suppliers would be required to attest that the information submitted is accurate and current.

Although the proposal does not alter DMEPOS coverage, reimbursement, or competitive bidding requirements, it would impose a new reporting and verification obligation on CBP contract suppliers and may require additional coordination with manufacturers and distributors to validate product-origin information. For suppliers, manufacturers, and investors operating in the DMEPOS sector, the proposal reflects CMS’s growing interest in supply-chain transparency and may increase scrutiny of sourcing practices and product-related disclosures provided to the Medicare program.

Palliative care services under the Medicare home health benefit 

While CMS does not propose any new reimbursement methodology or coverage category for palliative care, the agency uses the proposed rule to make perhaps its strongest statement to date that community-based palliative care may already be furnished and reimbursed under the existing Medicare home health benefit when a beneficiary otherwise qualifies for home health services and the palliative-care related interventions satisfy Medicare’s existing coverage requirements for skilled care. CMS makes clear that palliative care is not a distinct Medicare home health benefit; rather, palliative care may be delivered through covered home health services when the patient is homebound, has a qualifying need for skilled services under 42 CFR §§ 409.32 and 409.42, and receives services ordered as part of the home health plan of care. Eligibility for home health services depends on a beneficiary’s need for skilled services under 42 CFR §§ 409.32 and 409.42, not on whether the individual is terminally ill, has elected hospice, or is foregoing curative treatment. In making this clarification, CMS appears intent on dispelling common misconceptions that palliative care is limited to end-of-life care and instead highlights the role of home health agencies in providing skilled services throughout the continuum of serious illness.

Relying on the palliative care definition in 42 CFR § 418.3, CMS explains that palliative care is patient- and family-centered care designed to improve quality of life through the prevention and treatment of suffering, and can encompass physical, emotional, social, spiritual, and decision-making support. CMS expressly states that a beneficiary may receive palliative care services under the home health benefit if the beneficiary meets the home health coverage requirements and the services are reasonable and necessary skilled services. The agency explains that the need for skilled nursing care is determined based on the beneficiary’s individual condition and goals of care, regardless of whether the illness is acute, chronic, or terminal and regardless of the beneficiary’s potential for recovery. CMS further notes that many core palliative care interventions already fit within existing covered home health services, including skilled nursing services that require clinical judgment and expertise, such as:

• Advanced symptom assessment and management, medication management, patient and caregiver education, and ongoing observation of complex conditions.
• Medical social services addressing advance care planning and caregiver support.
• Therapy services designed to maximize function, comfort, dignity, and independence.

CMS also observes that palliative-care-related services generally align with the Patient-Driven Groupings Model’s Medication Management, Teaching, and Assessment clinical grouping and may be particularly appropriate for homebound patients with multiple chronic conditions, functional impairments, and complex care needs.

CMS states that it intends to add more palliative care examples to Chapter 7 of the Medicare Benefit Policy Manual following publication of the CY 2027 HH PPS final rule. Although these changes would be subregulatory guidance rather than regulations, they signal CMS’s broader policy objective of encouraging greater utilization of community-based palliative care through the home health benefit. For home health agencies and investors, the discussion suggests that CMS views palliative care as a potentially significant growth area within existing reimbursement structures and may be laying the groundwork for expanded provider participation through future guidance, education, and policy development.

While the proposed rule contains several targeted policy changes, its overarching message is clear: CMS continues to view the home as an increasingly important site of care. Organizations participating in the home health, DMEPOS, home infusion, and palliative care sectors should review the proposals closely, both for the opportunities they may create and the compliance expectations they may impose. Stakeholders should seriously consider submitting comments to CMS by August 31, 2026