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Costs & IRMAA

CMS Releases October 2026 Home Health Grouper Software Update, Effective October 1

The quarterly Patient-Driven Groupings Model software update is the tool home health agencies use to classify patient care episodes and calculate Medicare reimbursement amounts.

By the Goodsurance editorial teamAugust 27, 2026

The Centers for Medicare and Medicaid Services released the October 2026 quarterly update to the Home Health Patient-Driven Groupings Model grouper software, as noted in the August 27, 2026 MLN Connects newsletter. The updated software takes effect October 1, 2026, with Medicare Administrative Contractor systems required to complete the transition by October 5, 2026.

Home health agencies that participate in Medicare use the Patient-Driven Groupings Model, adopted in 2020, to classify each patient's care episode into a payment category. Classification is based on clinical characteristics, functional status, and care needs rather than the volume of services delivered. The grouper software translates clinical data recorded by agency staff into the appropriate payment group, which then determines the Medicare payment for a 30-day care episode.

CMS released the October 2026 home health grouper software update, effective October 1, setting how Medicare pays for in-home care episodes.

CMS releases three grouper software updates per year, in January, April, and October, to align the tool with annual ICD-10-CM diagnosis code changes effective October 1 and with other refinements. Beta testing for the October 2026 version ran from August 5 through August 19, 2026.

Home health agencies should update their clinical and billing systems before the October 1 effective date to ensure patient care episodes starting on or after that date are correctly classified and billed to Medicare. Inaccurate grouping can result in incorrect payment, which may later require adjustment.

In plain words

When Medicare pays a home health company to send nurses or therapists to your home, it uses software to figure out how much to pay. The software sorts each patient into a group based on their health needs. Medicare updates this software three times a year. The October 2026 update just came out and takes effect October 1. Home care companies need to install the new version so Medicare pays them the right amount for each patient.

Understand the basics first

Source: CMS MLN Connects
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