In 2026, home health agencies face pressure to deliver excellent patient care while managing tight margins. Especially as:

• CMS projects HHA Medicare payments to fall by 1.3% ($220 million) in CY 2026 over CY 2025, following CMS’ 2026 Home Health Prospective Payment System Final Rule.
• The Expanded Home Health Value-Based Purchasing (HHVBP) Model is transitioning Medicare reimbursements from fee-for-service to value-based payment, starting with Traditional Medicare. Based on the HHA’s performance, CMS will either lower or raise payments by -5% to 5%

Quality of Care is the primary lever for economic performance.

While CMS has only recently linked HHA payments to performance, it has long been interested in tracking performance and patient outcomes, beginning with the OASIS (Outcome and Assessment Information Set) survey in 1999, which serves as the basis for today’s Quality of Patient Care Star Ratings.

These star ratings summarize an agency’s quality of care on a simple 5-point scale, enabling patients and their prescribers to choose the most suitable home health care partner.

To remain competitive in 2026, HHAs must understand their care performance in context of the broader home health market and innovate to achieve better patient outcomes, higher star ratings, and sustainable economic growth.

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Statistics of Star Ratings

To evaluate the effectiveness of their care-delivery processes, home health leaders should contextualize their Star Rating performance within the broader HHA landscape.

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Figure 1: Frequency distribution of HHA quality of patient care star ratings

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Of the 12,251 registered HHAs in the most recent reporting period, only 7928 (66%) had sufficient complete quality episodes and OASIS measure data to earn a star rating. 

Among HHAs with a star rating, the above frequency distribution reveals:

• An average star rating of 3.24 stars, with a standard deviation of 1.02 stars
• A median (50th percentile) star rating of 3.5 stars

The table below shows how these HHA star ratings compare to those of adjacent clinical institutions.

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Table 1: Comparing summary statistics of the distribution of star ratings for different clinical institutions

Sources: Centers for Medicare & Medicaid Services. “Home Health Care Agencies.” January 14, 2026; “Hospital General Information.” February 25, 2026; “Provider Information.” February 25, 2026 [Table generated from internal analysis]

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Improving Star Ratings is difficult for many HHAs, but improvement creates an outsized competitive advantage relative to other clinical settings

Compared with adjacent provider institutions (hospitals and nursing homes), HHAs have the highest mean and median star ratings and the least rating variability, as measured by standard deviation. This means that, for a typical 50th percentile HHA, a 1-star increase will improve its percentile ranking more than the same 1-star increase for a typical hospital or nursing home.

For example, being one star above the median puts you in the:

• HHA (4.5 stars): 88th percentile
• Hospitals (4 stars): 77th percentile
• Nursing Homes (4): 70th percentile

Small improvements in star ratings can go a long way. However, because the median HHA star rating is relatively high (3.5 stars), it appears that agencies have already realized most of the low-hanging fruit, making it harder to further optimize performance and star ratings.

For better and for worse, there’s only so much room for improvement.

HHAs now face two distinct growth paths:

1. Double down on tried, potentially exhausted strategies yielding diminishing returns, or
2. Innovate and explore new ways to improve care performance

Looking Under the Hood: Individual Quality Measures

CMS factors seven individual quality metrics into the HHA star rating calculation. These include one process measure and six patient outcome measures, all scored as proportions of qualified patients, ranging from 0% to 100%.

The table below defines and summarizes how HHAs perform across all seven measures:

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Table 2: Comparing summary statistics of the distribution of individual quality measures used to calculate HHA star ratings

Source: Centers for Medicare & Medicaid Services. “Home Health Care Agencies.” January 14, 2026; “Home Health Quality Measures – Outcomes.” 2025 [Table generated from internal analysis]

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The Timely Initiation of Care metric underscores that HHAs have reached a process-improvement ceiling: With an average on-time rate of 94%, a typical HHA is already operating at peak timeliness. Further improvements may not deliver better outcomes or financial results.

HHAs must find new areas to differentiate and improve patient outcomes. Looking further down this table illuminates what alternative strategies might look like. 

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Clinical innovation drives meaningful improvements across functional measures

The average scores for Improvement in Ambulation (83%), Bed Transferring (83%), and Bathing (85%) are remarkably similar in both mean and variability. 

These three functional measures likely respond to the same clinical interventions, including physical and occupational therapy, in-home environmental modifications, and durable medical equipment and supplies that promote physical independence.

An HHA that innovates in one of these functional ADL (activities of daily living) areas will likely see a correlated boost across all three, providing a more efficient path to a 5-star rating.

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Potentially Preventable Hospitalization (PPH) is a critical outcome, yet the most difficult to control

Potentially Preventable Hospitalizations are an essential component of patient health, HHA outcomes data, and now, payor reimbursement for HHAs.

Yet it is one of the most difficult measures to control during an HHA episode.

PPH exhibits the highest variability of any Star Rating measure (coefficient of variation of 29%), indicating that HHAs with strong performance in other measures are still at risk for poor PPH outcomes.

These hospitalization rates, although key in determining HHA Star Ratings and payment, are also heavily influenced by other healthcare clinicians involved during and after the episode of care.

Choosing the right 3rd-party partners can keep patients out of the hospital and enable strong performance in this critical measure.

Bridging the Gap: From Data to 5-Star Performance

In 2026, quality of care and Star Ratings have evolved into powerful drivers of an agency's economic performance. HHA leaders who want to excel clinically and financially must adopt tools and select partners that contribute to both goals.

Verse Medical enables clinical and financial excellence for HHAs by removing the DME and supply inefficiencies that waste clinician time and inhibit high-quality care delivery.

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Solution: Invest in clinical interventions impacting multiple functional measures

Industry averages for Improvement in Ambulation (83%), Bed Transferring (83%), and Bathing (85%) suggest these three functional measures likely respond to the same clinical interventions. HHAs can maximize their improvement efficiency by focusing on treatments that drive these correlated results. 

But even with the highest-quality clinical support, patients can't maximize their treatment plans without the necessary DME and supplies. Especially when most DMEPOS suppliers take 1-3 weeks to deliver, delayed orders can easily derail recovery.

Verse Medical enhances care quality through its 99% order accuracy rate and 95% on-time delivery rate (mail orders delivered in 1-3 days), ensuring patients receive the supplies they need to regain physical independence and improve ADL outcomes.

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Solution: Prevent potentially preventable hospitalizations and readmissions by partnering with qualified external providers

DME suppliers are intimately involved in the home health recovery process. Yet the industry standard, one- to three-week delivery timelines, for equipment and supplies can lead to preventable hospitalizations for high-risk patients. Despite the sensitivity of these deliveries, HHAs are often left in the dark once an order is placed, unaware of its status and unable to contact qualified support.

Verse Medical provides preferred partners with a dedicated Account Manager, transforming Verse into a genuine extension of the HHA care team. This single point of contact understands the agency's specific operations and ensures SLAs are met, enabling better care coordination and timely delivery to prevent readmissions.

Through Verse's electronic ordering system, clinicians can track DME orders like Amazon packages and view metrics on overall order volume, payer mix, cost savings, and performance. This transparency ensures that HHA clinicians and patients know exactly which brand of equipment is arriving and when, eliminating surprise delays and unauthorized substitutions.

By ensuring the right equipment and supplies get to the home exactly when they’re needed, Verse helps prevent the complications that lead to within-stay hospitalization.

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Source: Verse Medical: Internal Clinician Order and Survey Data

The Future of Home Health Excellence includes a Best-in-Class DMEPOS Partner

As the home health industry navigates the value-based landscape of 2026, the margin for error is razor-thin. Most traditional process improvement strategies have reached their limit.

Improving care quality is no longer a localized effort. Because patient outcomes are influenced by the entire care continuum, choosing a reliable DMEPOS partner is a strategic clinical decision.

By partnering with Verse Medical, HHAs deliver a DMEPOS experience that enables excellent patient outcomes and financial performance. HHAs improve patient function and prevent PPHs, transforming complex care challenges into a competitive advantage.