As the clock ticks closer to a final decision regarding the Centers for Medicare and Medicaid Services’ final rule on Medicare home health reimbursement rates for 2026, providers are facing the realities of what is at risk.
Providers would struggle to pay workers or to invest in innovation. Among the most critical of the proposed rule’s potential consequences, however, would be providers’ inability to care for the most complicated of patients, according to David Baiada, CEO of BAYADA Home Health Care.
“Ultimately, it comes to something very simple, that operators are forced to make tough decisions to remain viable,” Baiada said on a recent Home Health Care News webinar. “Those tough decisions start with, in many cases, either short-term choices to serve the populations that are easier, aka cheaper, to take care of, in order to remain viable, to still fulfill mission and purpose, but to do it in a viable way.”
Baiada is set to end his tenure at Bayada after the completion of an executive search, according to an August announcement. Bayada provides home health, home care, hospice and behavioral health care services in 23 states and several other countries.
Insufficient reimbursement would also be a critical strike to already pressing staffing concerns, according to Baiada. Failing to provide adequate wages and benefits would translate to inadequate capacity and reduced access to care.
The 2026 proposed rule comes after years of regulations that have steadily chipped away at the reimbursement rate.
“We’re on the precipice with these cuts,” Baiada said. “We’ve been experiencing this, as we all know, over the past decade, pretty consistently with [previous] years cuts causing true irreparable damage and harm to access of care and capacity, in particular in communities where capacity is already severely constrained, rural communities, inner city communities and others where there just aren’t enough people available to provide the service and the resources to do it.”
The proposed home health rule, if it passes in its current state, has long-term impacts because it reduces providers’ ability to invest in innovation, which could mitigate future threats to providers by increasing efficiencies. AI specifically could make a significant difference for providers, according to Luke Rutledge, president of Homecare Homebase.
“AI automation and transcribing, specifically on the technology approaches, are driving the shift to helping clinicians deliver care more efficiently in the home,” Rutledge said. “There is going to be this ongoing challenge of, ‘How do I balance getting all these advances in technology to also gain some of the efficiencies and the financial pressures that organizations are achieving?’ … Clinicians may need to add one or two extra visits, or the back office teams may need to scale through some of the tasks and the volumes, and then lean on advocacy efforts to reduce some of the regulatory burden that’s out there for our industry.”
Dallas-based Homecare Homebase is one of the largest technology and administrative services companies serving home-based care.
Taking action beyond comments to CMS
The window for public comments on the proposed rule closed with a resounding slew of protests – but the opportunity to speak out has not yet closed.
Home-based care stakeholders are still advocating against the proposed rule, which would be a fork in the road for the industry, according to Dr. Steve Landers, CEO of the National Alliance for Care at Home.
“We’ve seen so much erosion in access, and this is just not an acceptable policy direction for Americans,” Landers said. “I just can’t imagine that this is going to be allowed to go in this direction. This basically means that more people are relying on facility-based care if they need to recover or have serious consequences of illness, and that’s going to be costly.”
The Alliance is continuing to meet with Medicare officials – who Landers said “appear to be listening,” and is pushing members of Congress to call CMS and write letters. The organization, overall, aims to create a “platform for unification” through its efforts.
While providers and patients face serious consequences if home health reimbursement rates continue to erode, a course correction is possible.
Landers said he was encouraged by the proposed bill that would pause cuts to the Medicare home health reimbursement rates for two years.
“This is so fixable, so imminently fixable,” Landers said. “They need to revisit the methodologies for this payment reform initiative, fix where they’ve made some errors, stabilize this incredibly important strategic resource and move forward, move on to other problems. People in care at home will go do the great work they’re doing and create value for the system.”
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