HHVBP in 2026: Why Functional Outcomes Now Drive 40% of Your Payment Score

The Home Health Value-Based Purchasing (HHVBP) model is in its second payment year, and the measure set just changed significantly. Three patient satisfaction measures were removed. Four outcome measures were added. The result: functional outcomes and cost efficiency now account for 80% of your agency's Total Performance Score — up from roughly 50% in the first payment year.

If your agency treats HHVBP as background noise, 2026 is the year that changes. The maximum payment adjustment is 5% upward or downward, applied to every Medicare claim. For a mid-size agency billing $3 million annually, that is a $150,000 swing based entirely on how you perform relative to your peers.

This article covers the full CY 2026 measure set, what changed from CY 2025, and what you need to do operationally to protect your score.

Source: CY 2026 Home Health Prospective Payment System Final Rule (CMS-1828-F), published in the Federal Register November 28, 2025 (Document 2025-21767). Supplemental reference: Expanded HHVBP Model Guide, December 2025 edition.

What Is HHVBP?

The Expanded HHVBP Model is a CMS program that adjusts Medicare payments to home health agencies based on quality performance. It launched nationally in CY 2023 and applies to virtually all Medicare-certified HHAs — approximately 7,061 agencies compete.

The core mechanic: CMS measures your agency's quality performance during a performance year, calculates a Total Performance Score (TPS), and applies a payment adjustment two years later. Better performance earns higher payments. Worse performance means lower payments. The adjustments are budget-neutral — money shifts from lower performers to higher performers.

The Two-Year Lag

This is the single most important thing to understand about HHVBP timing. Your performance today affects your payments two years from now:

What this means right now: The payment adjustments your agency is seeing in 2026 are based on your CY 2024 performance. And the care your clinicians are delivering today — in CY 2026 — will determine your payments in CY 2028.

You cannot fix your 2026 payments. But you can start improving your 2028 payments today.

The CY 2026 Measure Set (11 Measures)

CMS finalized a significant restructuring of the HHVBP measure set in the CY 2026 Final Rule. The model went from 10 measures in CY 2025 to 11 measures in CY 2026.

OASIS-Based Measures (6 measures -- 40% of TPS)

These are calculated from OASIS assessment data your clinicians submit. Functional improvement is the common thread.

The three bolded measures are new for CY 2026. All three are ADL improvement measures tied to specific M-items that clinicians have been collecting for years — the data was already flowing, CMS is now using it in the payment score.

Claims-Based Measures (3 measures -- 40% of TPS)

These are calculated from Medicare claims data. Your agency does not submit anything extra — CMS pulls the data automatically.

MSPB-PAC is new for CY 2026. This is a cost efficiency measure — it compares the total Medicare spending associated with your patients to what CMS expects based on patient characteristics. Lower spending (relative to expected) scores better.

HHCAHPS Survey-Based Measures (2 measures -- 20% of TPS)

Patient satisfaction, measured through the HHCAHPS survey. This category shrank significantly.

Three HHCAHPS measures were removed for CY 2026:

• Care of Patients
• Communications Between Providers and Patients
• Specific Care Issues

These measures were dropped because CMS revised the HHCAHPS survey itself (the revised survey begins with the April 2026 sample month). The survey items that fed these three measures were either removed or substantially changed, so the old measures could not be calculated going forward.

What Changed From CY 2025 to CY 2026

Here is the full picture of how the measure set evolved:

The weight shift is dramatic:

Patient satisfaction went from the largest category to the smallest. Functional outcomes and cost efficiency now dominate.

Larger-Volume vs. Smaller-Volume Cohorts

CMS splits agencies into two cohorts based on patient volume, and the weights differ:

If your agency served fewer than 60 unique Medicare beneficiaries in the prior calendar year, HHCAHPS is excluded entirely from your TPS. Your score is 100% outcomes and cost. For smaller agencies, functional improvement and hospitalization prevention are literally the only things that matter.

How the Payment Adjustment Works

Your Total Performance Score is converted to a payment adjustment percentage using a Linear Exchange Function (LEF). CMS has not published the exact LEF parameters for CY 2026 yet — those are released with the Annual Performance Reports.

What we know:

• The maximum upward adjustment is +5% of Medicare payments
• The maximum downward adjustment is -5%
• The system is budget-neutral — total upward adjustments equal total downward adjustments
• Adjustments apply to every Medicare claim your agency submits during the payment year

The median-performing agency receives a near-zero adjustment. Agencies in the top quartile earn positive adjustments. Agencies in the bottom quartile lose revenue.

What This Means for Your Agency — 6 Operational Priorities

1. Standardize Functional Scoring Across Your Clinical Team

With six OASIS-based measures (40% of TPS), inconsistent scoring across clinicians is your biggest risk. If one OT scores M1830 (Bathing) conservatively at SOC and another scores generously at discharge, the improvement looks artificial — or worse, the opposite happens and real improvement goes unrecorded.

What to do:

• Conduct inter-rater reliability training on M1810, M1820, M1830, M2020, M1400, GG0130, and GG0170
• Review OASIS scoring distributions by clinician quarterly — outliers in either direction need coaching
• Use the OASIS-E2 item definitions exactly as written, not institutional shorthand

2. Focus Discharge Planning on Community Discharge

DTC-PAC (Discharge to Community) is now worth a meaningful share of your score. Every patient who transfers to a SNF, LTACH, or is readmitted instead of discharging to the community hurts this measure.

What to do:

• Identify patients at high risk of institutional transfer early in the episode
• Coordinate with physicians and case managers proactively — not reactively when a problem emerges
• Document the discharge plan from the first visit, not the last

3. Reduce Preventable Hospitalizations

PPH remains one of the highest-impact measures. CMS has refined the PPH measure over multiple years — they know which hospitalizations are potentially preventable and which are not.

What to do:

• Implement clinician-to-clinician handoff protocols for patients with worsening status
• Train clinicians to escalate clinical concerns before they become ER visits
• Track your top hospitalization diagnoses and build targeted prevention protocols

4. Monitor Total Medicare Spending (MSPB-PAC)

This is the new measure, and it is the hardest to control because it captures spending beyond your agency. But you can influence it.

What to do:

• Coordinate with PCPs to avoid duplicative testing or unnecessary specialist referrals
• Ensure your care plan addresses the conditions most likely to generate additional Medicare spending (falls, medication errors, wound complications)
• Track ER utilization among your active patients — every ER visit that does not result in admission still counts as spending

5. Do Not Ignore HHCAHPS — It Still Counts

Patient satisfaction dropped from 50% to 20% of TPS, but 20% is still significant. And the two remaining measures — overall rating and willingness to recommend — are the most holistic indicators of patient experience.

What to do:

• Continue providing excellent patient communication and care coordination
• Respond to patient complaints promptly — overall ratings are heavily influenced by how problems are handled
• Remember that the revised HHCAHPS survey begins sampling in April 2026 — expect new questions and potentially different response patterns

6. Use Your Interim Performance Reports

CMS issues quarterly Interim Performance Reports (IPRs) during the performance year. These show you how your agency is tracking on each measure relative to your peers.

What to do:

• Review IPRs within one week of release
• Identify measures where you are underperforming and prioritize operational changes
• Track quarter-over-quarter trends — improving trajectories matter even if your absolute score is not top-quartile

The Connection to PDGM and OASIS-E2

HHVBP does not exist in isolation. The same OASIS items that drive your VBP score also drive your PDGM payment grouping:

• GG0130/GG0170 determine your functional impairment level under PDGM (which determines your case-mix weight and base payment)
• M1810/M1820/M1830 are now simultaneously VBP measures AND items that inform your clinical profile

With the CY 2026 PDGM recalibration using CY 2024 claims data, case-mix weights more precisely tie payment to functional status. Accurate GG and M-item scoring now affects both your per-period PDGM payment AND your agency-wide VBP adjustment.

For a detailed guide on scoring the GG items accurately, see OASIS-E2 GG Items Explained: How to Score Self-Care and Mobility.

Timeline: What Happens When

Frequently Asked Questions

Does HHVBP apply to all home health agencies?

Yes. The expanded model applies to all Medicare-certified HHAs in the 50 states, DC, and territories. Approximately 7,061 agencies compete. There is no opt-out.

What if my agency is too small for HHCAHPS?

If your agency served fewer than 60 unique Medicare beneficiaries in the prior year, you are in the smaller-volume cohort. HHCAHPS measures are excluded — your TPS is based entirely on OASIS (50%) and claims (50%) measures.

Can I see my current performance?

Yes. CMS issues quarterly Interim Performance Reports through the HHVBP Model portal. Annual Performance Reports are released approximately August of the year following the performance year.

Does HHVBP affect Medicare Advantage payments?

No. HHVBP adjustments apply only to Medicare Fee-for-Service claims. Medicare Advantage plans negotiate rates separately.

What is the difference between HHVBP and Star Ratings?

Star Ratings are public quality scores displayed on Care Compare. HHVBP is a direct payment adjustment. They use some of the same measures but are calculated differently. You can have high Star Ratings and still receive a negative VBP adjustment if your peers perform even better.

How does all-payer OASIS affect my VBP score?

As of July 1, 2025, OASIS is mandatory for all skilled patients regardless of payer. However, HHVBP currently uses only Medicare FFS patient data for quality measure calculations. Non-Medicare OASIS data does feed into quality measures for Star Ratings but not the VBP payment adjustment.

Sources

• CY 2026 HH PPS Final Rule Fact Sheet (CMS-1828-F)
• Federal Register: CY 2026 HH PPS Final Rule (Document 2025-21767)
• Expanded HHVBP Model — CMS Innovation Center
• Expanded HHVBP Model Guide (December 2025)