More than one in four Medicare-certified home health agencies are losing revenue to HHVBP payment penalties right now. According to CMS data, 27.6% of agencies face a negative payment adjustment — money subtracted from their Medicare reimbursement based on quality performance scores. Most agency owners don't realize they're in penalty range until the adjustment hits their payments. By then, the performance period that determined the penalty is already over.
This guide explains how the Home Health Value-Based Purchasing model works, how your Total Performance Score is calculated under the 2026 scoring changes, what the penalty and bonus range looks like, and what small agencies can do to move their score.
What HHVBP Actually Is
The Home Health Value-Based Purchasing model is a CMS program that adjusts Medicare payments to home health agencies based on quality performance. Agencies that score well earn a bonus on top of their standard reimbursement. Agencies that score poorly take a cut.
The model expanded nationwide in January 2023. Every Medicare-certified home health agency in the country is in it — participation isn't optional. CMS evaluates each agency's performance during a baseline period, scores it against a set of quality measures, and applies a payment adjustment to reimbursement in the following calendar year.
For 2026, the maximum adjustment is plus or minus 5%. That means a high-performing agency can earn up to 5% more on every Medicare claim, while a low-performing agency can lose up to 5%. On a $2 million annual Medicare book, that's a $100,000 swing.
How Your Total Performance Score Is Calculated
Your HHVBP payment adjustment is determined by a single number: your Total Performance Score, or TPS. The TPS is a composite score calculated from your agency's performance across three categories of quality measures. Each category carries a specific weight in the formula.
OASIS-Based Measures (40% of TPS)
These measures track patient outcomes using data from OASIS assessments — the standardized patient evaluation tool required for all Medicare home health patients. The 2026 model includes four OASIS-based measures: the Discharge Function Score, which has been in the model since expansion, plus three new measures added this year — Improvement in Bathing (M1830), Improvement in Upper Body Dressing (M1810), and Improvement in Lower Body Dressing (M1820).
These measures reflect whether patients are actually getting better during their home health episode. They account for 40% of your TPS, making them the single largest driver of your score.
What this means in practice: if your clinicians are documenting OASIS assessments accurately and patients are showing functional improvement at discharge, these measures work in your favor. If OASIS assessments are rushed, inconsistent, or submitted late, the data won't reflect the outcomes your clinicians are actually achieving.
Claims-Based Measures (40% for Larger Agencies, 50% for Smaller Agencies)
Claims-based measures use Medicare billing data to evaluate agency performance. The most critical measures in this category include Acute Care Hospitalization (ACH) — how often your patients end up in the hospital during a home health episode — and Emergency Department Use without Hospitalization.
New for 2026, CMS added the Medicare Spending Per Beneficiary – Post Acute Care (MSPB-PAC) measure. This tracks total Medicare spending on a patient during and after a home health episode. Agencies whose patients generate lower downstream spending score better.
For smaller-volume agencies, claims-based measures carry even more weight — 50% of the TPS instead of 40%. This is because smaller agencies may not have enough HHCAHPS survey responses to generate reliable patient experience scores, so CMS shifts the weight to measures that don't depend on survey volume.
The takeaway for small agencies: your hospitalization rates and downstream spending patterns matter more than almost anything else in your score. Reducing avoidable hospitalizations is the single highest-leverage move most agencies can make.
HHCAHPS-Based Measures (20% for Larger Agencies, 0% for Smaller Agencies)
The HHCAHPS survey measures patient experience — how patients rate the care they received from your agency. This category just underwent a major overhaul.
As of April 2026, CMS revised the HHCAHPS survey from 34 questions to 25. Three patient experience measures that previously fed the HHVBP scoring model were removed entirely. The remaining HHCAHPS measures now account for 20% of the TPS for larger-volume agencies.
For smaller-volume agencies that don't meet the survey response threshold, HHCAHPS carries 0% weight — the formula redistributes entirely to OASIS and claims measures.
What the Penalty Range Actually Looks Like
The HHVBP adjustment isn't binary — it's not just "penalty" or "bonus." It's a sliding scale based on where your TPS falls relative to other agencies nationwide.
Agencies with the highest TPS scores receive the maximum 5% bonus. Agencies with the lowest scores take the maximum 5% penalty. Most agencies fall somewhere in between, receiving a smaller adjustment in either direction.
The median TPS is the dividing line. If your TPS falls below the national median, you're in penalty territory. If it falls above, you're earning a bonus. The further you are from the median in either direction, the larger your adjustment.
According to CMS data, 27.6% of agencies are currently on the penalty side. That means nearly three in ten agencies are having revenue subtracted from their Medicare reimbursement because of quality performance scores they may not even be tracking.
Where Small Agencies Lose Points Without Realizing It
The agencies that end up in penalty range aren't always delivering worse care. They're often losing points on measures they could control with better systems.
Late OASIS submissions. If OASIS assessments aren't completed and transmitted within CMS timeframes, the data either doesn't count or reflects poorly on outcome measures. This is one of the most controllable factors in the scoring model and one of the fastest to fix.
Incomplete documentation that masks good outcomes. A patient improved significantly during their episode, but the discharge OASIS doesn't capture it because the assessment was rushed or the clinician didn't update the functional scores. The clinical outcome was real — the data just didn't reflect it.
Avoidable hospitalizations. Every acute care hospitalization during a home health episode counts against your ACH measure. Some hospitalizations are unavoidable. But agencies without a structured process for monitoring patient status between visits, escalating concerns early, and coordinating with physicians often see higher rates than necessary.
Not tracking the measures at all. Many small agencies don't monitor their HHVBP performance between payment adjustment notifications. By the time they learn they're in penalty range, the performance period is over and the next one is already underway. The adjustment is a lagging indicator — it tells you where you were, not where you are.
What You Can Do This Quarter
Moving your TPS isn't a multi-year project. Several of the measures respond to operational changes within a single performance period.
Start by pulling your current TPS from CMS. Search "HHVBP Model" on CMS.gov to find your agency's most recent performance data. Know where you stand before trying to move the number.
Review your OASIS submission timeliness. Late assessments are one of the most common and most fixable issues. If your agency doesn't have a standard workflow for completing and transmitting OASIS assessments within the required window, build one this month.
Audit your discharge documentation. Pull a sample of recent discharge OASIS assessments and compare the documented functional scores to the clinical notes. If the notes describe improvement but the OASIS scores don't reflect it, you have a documentation accuracy problem — not a patient outcome problem.
Track your hospitalization rates monthly. Don't wait for CMS to tell you your ACH rate in next year's adjustment. Pull the data yourself, identify patterns, and build a process for early escalation when patients show signs of decline.
How Ordo Helps
Ordo Compliance tracks the quality measures that feed your Total Performance Score alongside your operational compliance requirements. The platform monitors due dates for OASIS submissions, flags overdue documentation, and tracks corrective actions tied to quality improvement initiatives. When CMS changes the measure set — like the 2026 HHCAHPS revision — the compliance packs update so your team knows what's current without reading the Federal Register.
Start your free trial at ordocompliance.com.
This content is for informational purposes only and does not constitute legal, medical, or regulatory advice. Consult your agency's compliance officer or legal counsel for guidance specific to your situation.
