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The Pennant Group welcomed a 2.4% aggregate payment increase in the 2027 Medicare home health final rule, while CEO Brent Guerisoli said it may not adequately support access to care. He also warned that some fraud-prevention measures are too broad and could burden legitimate providers; Pennant says it is preparing to comply.
The Pennant Group welcomed a 2.4% aggregate payment increase in the 2027 Medicare home health final rule, but CEO Brent Guerisoli said the adjustment does not go far enough to protect access to care. He also said some of the rule’s fraud-prevention provisions are too broad and could add burdens for legitimate home health providers, even as Pennant plans to adapt.
Guerisoli described the payment increase as a positive step, while arguing that reimbursements should better reflect inflation and the costs of delivering high-quality services. He said Pennant would continue working with industry partners to seek policy changes addressing what he called persistent underfunding. He also pointed to bills introduced in the House and Senate that, according to him, call for action on home health funding.
The rule includes measures intended to address fraud and program noncompliance. Among them, Medicare enrollment revocations can be made retroactive to the date noncompliance began, and the rule expands the grounds for revoking or denying enrollment. Guerisoli said Pennant supports efforts by the Centers for Medicare & Medicaid Services to root out fraud, but considers several measures unnecessarily broad. He said the company is prepared to adjust to the requirements.
Pennant’s operating scale is also relevant to the debate. The company reported $302.3 million in total third-quarter revenue, up 32% year over year, while its home health and hospice segment generated $239.8 million, a 38.2% increase. It recorded 28,479 home health admissions during the quarter, up 39.4% year over year; hospice average daily census reached 5,443, up 34.6%. The company also reported elevated employee-benefit expenses, which affected its service lines because it uses self-funded plans.
Payment Policy Meets Provider Compliance
The final rule sets payment and enrollment requirements for Medicare home health providers, making both its reimbursement level and compliance provisions relevant to companies serving beneficiaries. Pennant’s response highlights a tension in the policy: providers may welcome higher payments while questioning whether the increase covers operating pressures, and may support fraud controls while warning that broad rules could affect compliant organizations.
For patients and families, the practical concern is whether providers can continue offering accessible services under the combined effect of reimbursement levels and administrative requirements. Pennant’s remarks express the company’s assessment, not evidence that the rule has already reduced access or caused providers to leave the market. The available information does not quantify the rule’s expected financial or operational effects on Pennant or the wider sector.
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Pennant’s Growth and Integration Work
Pennant’s third-quarter results show substantial year-over-year growth across its home health and hospice business, alongside cost pressures from employee benefits. Company leadership said it had incorporated expectations for those expenses into its fourth-quarter projections and remained on track to meet its full-year guidance. Those are company statements; the figures do not by themselves establish how the new federal payment rule will affect future results.
Pennant also said it completed the two largest and final waves of transitions during Q3 as it integrated 54 locations acquired through UnitedHealth Group’s acquisition of Amedisys. The electronic medical record transition was completed Oct. 31, although some related work remained. Leadership anticipated completing the broader transition in Q4. These operational changes form part of the company’s current workload as it prepares for the new rule.
Rule Effects Still Need Measuring
The available reporting does not specify the estimated financial impact of the 2.4% increase on Pennant, how the rate compares with the company’s cost growth, or which individual fraud provisions it considers overly broad beyond the examples described in the final rule. It also does not establish how CMS will apply the expanded revocation and denial grounds in specific cases.
There is no reported evidence here that Pennant has faced an enrollment action or that the new measures have disrupted patient care. The extent of any added administrative burden, and whether it could affect service availability across the sector, remains unclear. The text of the cited House and Senate bills and their legislative status are not provided.
Pennant Prepares for Rule Changes
Pennant says it is prepared to adapt to the final rule and plans to continue working with industry partners on payment policy. The company’s next operational milestone is completing the remaining work tied to its integration of the 54 acquired locations; leadership anticipated that transition would be finished in Q4.
Future company updates and implementation of the rule may clarify how the payment adjustment and enrollment provisions affect Pennant’s costs and operations. The supplied report does not give a specific date for further CMS guidance or a timeline for action on the bills Guerisoli referenced.
Key Questions
What payment increase is in the 2027 home health final rule?
The rule includes a 2.4% aggregate rate increase for home health payments. Pennant welcomed the increase, while its CEO said it was insufficient to address inflation and protect access to care.
What fraud-related changes did Pennant criticize?
The rule makes Medicare enrollment revocations retroactive to the date noncompliance began and expands grounds for revoking or denying enrollment. Guerisoli said some measures are too broad and could burden legitimate providers; Pennant says it will adapt.
How did Pennant perform in the third quarter?
Pennant reported $302.3 million in total Q3 revenue, up 32% year over year. Its home health and hospice segment recorded $239.8 million in revenue, while home health admissions totaled 28,479.
Has Pennant said the rule will reduce patient access?
No specific reduction in access has been reported. Guerisoli warned that the payment increase was not enough to protect access, but the available information does not show that the rule has already disrupted services.
What is next for Pennant?
Pennant says it will adapt to the rule and continue advocating with industry partners. Leadership also anticipated finishing the remaining integration transition work in Q4.
Source: homehealthcarenews.com
