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Pennant Group CEO Brent Guerisoli called the 2027 Medicare home health rule’s 2.4% aggregate payment increase a positive step, but said it does not adequately address funding pressures. He also supports CMS efforts to combat fraud while warning that broad enrollment rules may add burdens for legitimate providers.
Pennant Group CEO Brent Guerisoli welcomed the 2.4% aggregate payment increase in the 2027 Medicare home health final rule, but said it is not enough to address provider funding pressures or protect access to care. He also backed the Centers for Medicare & Medicaid Services’ anti-fraud efforts while warning that some new enrollment rules could impose unnecessary burdens on legitimate home health providers.
Guerisoli described the increase as a step in the right direction, while arguing that reimbursements should reflect high inflation and adequately compensate providers delivering high-quality care. He said Pennant would continue working with industry partners on home health policy and welcomed the introduction of bills in the House and Senate calling for action on what he characterized as persistent underfunding.
The final rule includes changes aimed at reducing fraud. Among them, Medicare enrollment revocations will be made retroactive to the date noncompliance began, and CMS has expanded the grounds for revoking or denying enrollment. Guerisoli said Pennant supports efforts to root out fraud, but characterized several measures as unnecessarily broad. He added that the company is prepared to adapt.
Pennant reported $302.3 million in third-quarter revenue, up 32% from a year earlier. Revenue from its home health and hospice segment was $239.8 million, a 38.2% year-over-year increase. The company recorded 28,479 home health admissions, up 39.4%; its hospice average daily census was 5,443, up 34.6%. The company also reported elevated employee benefit expenses, which affected its service lines because it self-funds its plans.
Payment Rates and Provider Compliance
The rule affects both the reimbursement providers receive and the requirements they must meet to participate in Medicare. For home health agencies, payment levels can shape the resources available to deliver services, while enrollment enforcement may affect a provider’s ability to bill the program.
Pennant’s response highlights a tension within the rule: providers may welcome higher payments while disputing how fraud controls are designed. The company’s comments are those of one provider, not evidence that the new measures will necessarily reduce access or create specific financial losses. But its concerns point to implementation questions that other agencies may also monitor, particularly the reach of retroactive revocations and expanded denial grounds.
Pennant’s reported growth offers company-specific context, but its strong third-quarter revenue does not establish whether the rate increase is adequate across the sector. The company also cited benefit-cost pressures and transition work, factors that can affect its operations independently of the federal payment rule.
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Pennant’s Growth and Integration Work
Pennant operates home health and hospice services and reported substantial year-over-year growth in both its segment revenue and service volumes in the third quarter. At the same time, leadership reported higher employee benefit expenses that affected all service lines because the company uses self-funded plans. Guerisoli said Pennant had incorporated expectations for those costs into its fourth-quarter projections and remained on track to meet its full-year guidance.
The company also completed the two largest and final waves of transitions in the third quarter as it integrated 54 locations acquired through UnitedHealth Group’s acquisition of Amedisys. Pennant said its electronic medical record transition was completed Oct. 31, although some integration work remained. Leadership anticipated completing the broader transition in the fourth quarter.
These developments are relevant to the company’s operating position, but they are separate from CMS’s policy changes. The supplied report does not quantify what the 2.4% rate adjustment will mean for Pennant’s revenue or how much the new enrollment requirements could cost the company.
Implementation Effects Still Unclear
The available information does not specify the financial impact of the 2.4% increase on Pennant or other agencies, or how that adjustment compares with providers’ individual cost increases. It also does not quantify how many providers could be affected by retroactive revocations or expanded grounds for enrollment denial.
Guerisoli’s warning that the measures may burden legitimate providers is a company position; the source material does not establish how CMS will apply the rules in individual cases or whether access to care will change. Details about implementation, enforcement and any effects on patients remain unclear. The report also does not identify the specific bills in Congress or their prospects for passage.
Rule Rollout and Pennant’s Next Quarter
CMS will implement the 2027 final rule, while providers will need to respond to its payment and enrollment provisions. The source material does not give a detailed implementation schedule for each fraud measure, so the timing and practical application of those requirements remain to be clarified.
Pennant said it is prepared to adapt and plans to continue working with industry partners on reimbursement policy. The company’s next reported results will provide an update on fourth-quarter performance, employee benefit costs, and its integration of the 54 acquired locations. Leadership anticipated completing the remaining transition work in the fourth quarter.
Key Questions
What payment increase does the 2027 home health rule include?
The final rule includes a 2.4% aggregate rate increase for home health payments. The source does not provide a Pennant-specific estimate of the increase’s financial effect.
Why does Pennant say the increase is not enough?
CEO Brent Guerisoli said reimbursement should account for high inflation and appropriately compensate high-quality providers. He described the increase as a positive step but insufficient to address ongoing underfunding concerns.
Which fraud-related rules did Pennant criticize?
Guerisoli objected to measures he said were too broad, including making Medicare enrollment revocations retroactive to when noncompliance began and expanding the grounds for enrollment revocation or denial.
What were Pennant’s third-quarter results?
Pennant reported $302.3 million in total revenue, up 32% year over year. Its home health and hospice segment generated $239.8 million, up 38.2% from the same quarter a year earlier.
What remains unknown about the rule’s effects?
The source does not quantify the rule’s effect on Pennant’s finances, the number of providers that may face enrollment action, or any resulting change in patient access. How CMS will apply the provisions in specific cases is also not detailed.
Source: homehealthcarenews.com
