Morgan Gonzales
2026-01-16 21:48:00
This article is a part of your HHCN+ Membership
In 2025, Medicare-certified home health providers faced dramatic uncertainty. The Centers for Medicare and Medicaid Services (CMS) proposed the largest-ever cut to the Medicare home health payment rate, prompting an outcry from providers, workers and patients, with the ultimate result being a much less painful final rate cut.
While recovering from an anxiety-inducing 2025, home health providers have further complications on the horizon in 2026. The industry can expect additional layoffs after some high-profile rounds in 2025, and must contend with a novel type of mandatory payment model. Key pieces of legislation also stand to make or break aspects of the home health industry, specifically implicating the hospital-at-home market and the payvider trend.
In 2026, providers that focus on future-proofing their service lines and withstand pressures on care quality will have the opportunity to usher in the next era of home health care and become the center of health care’s shift into the home.
Curious what we forecasted for last year? Revisit our 2025 predictions here.
A year of layoffs
In the home health sector, the typical workforce story revolves around providers’ struggling to recruit and retain workers. But last year, layoffs generated notable headlines.
In June, home health care giant Bayada Home Health Care laid off 10% of its headquarters staff, citing a difficult reimbursement environment. In September, hospital-at-home leader DispatchHealth scaled back its operations in 10 markets, laying off employees in the process.
Other providers had to take similar measures as well.
“You can 10x an employee by amplifying them with technology, but the reality is, we did have to lay people off, just like a lot of other home health [companies] had to do,” Healthview CEO Steven Gonzalez previously told HHCN.
In 2026, providers have several opportunities to relieve some of the pressures that led to layoffs in 2025, notably through the use of efficiency-improving technologies. But with yet another Medicare home health rate cut to contend with and continuing workforce struggles, providers will increasingly be forced to minimize their workforce pool to save costs. The big-name providers in the headlines for layoffs in 2025 were just the first cracks in the ice that is now set to break.
Resisting ‘enshittification’
Home health providers are seeking to transform their operations to focus on efficiency, often leaning on new AI tools. Technology is no longer optional – these transformations are necessary for the industry to survive and continually shift the home into the center of the health care ecosystem.
However, providers in 2026 must ensure that patients receive a person-first, high-quality experience while still leveraging AI. If not, they risk entering the trap of “enshittification.” This term refers to a drop in quality within digital platforms – think the proliferation of AI content on Facebook that drowns out posts from a user’s actual friends.
Home health providers in 2026 will need to ensure that they prioritize AI tools without relying on automation so much that worker and patient experiences feel soulless. As operators move from focusing on back-office AI technology to more worker- and patient-focused tech, having strong AI quality control will be of paramount importance. As many provider executives have noted, AI – or technology of any kind – ideally should enable more meaningful human connections between caregivers and patients; glitches in the AI or ill-conceived use cases for it might be an unavoidable growing pain as the technology proliferates and evolves, but savvy providers will limit these negative effects.
That is, as early technology adopters will spend 2026 chasing the most cutting-edge technology, those seeking to maintain or improve worker and patient retention must wade into the waters of tech-first innovation with a nod toward old-school tactics: human touch.
Focusing on becoming a TEAM player
In 2026, many home health operators will have to contend with a new mandatory payment model – and those that are not implicated in the model will be paying close attention.
The Centers for Medicare and Medicaid Services’ (CMS) mandatory bundled Transforming Episode Accountability Model (TEAM) went into effect on Jan. 1, 2026, and is poised to propel the home health industry further into the world of alternative payment models because of its broad scope and clear pressure to send more patients into more affordable care settings.
Additionally, TEAM has a key distinction from other mandatory payment models: it compares providers to one another within a large region.
“Other bundled payment models have been historical provider price models, which means you just had to beat yourself from the past,” Brian Fuller, managing director of ATI Advisory’s value-based care design and delivery practice, previously told HHCN. “This is a regional target price model, which means you’ve got to be better than your region.”
In 2026, providers implicated by the model’s wide scope of 743 participating hospitals will have to contend with these regional competitions. To clearly communicate their value among their peers, providers will focus on analytics and compelling pitches to hospitals to make their value clear – and they must more than ever before leverage the right systems and processes for meaningful and aligned collaboration with hospital partners.
The end of the pure-play provider
In 2025, the home health industry rallied against a singular threat: the largest cut to the Medicare home health payment rate ever proposed.
While prioritizing advocacy work, providers hastened to plan for the worst-case scenario. Some considered scaling back their home health offerings to expand their focus on other service lines.
“If the rule truly does move forward with this 9% cut, there’s a possibility that we will be one of those agencies that just decides to go in a different direction and really pull back altogether on skilled home health care,” Empath Health CEO Jonathan Fleece previously told Home Health Care News. “Skilled home health already runs at an operating loss for many agencies. That’s one of the options on the table, is we would potentially be one of those skilled agencies that would repurpose home health, and focus on our core business of end-of-life care and the frail elderly.”
While the final rule included a much softer rate cut than initially proposed, it still reduced Medicare payments, making a compelling case for providers to focus on or expand into areas of their businesses with less frequent cuts.
Additionally, the fear that providers felt in 2025 will not be easily forgotten and will spur providers to turn to services like hospice care to manage reimbursement risk through diversification.
Hospital-at-home atrophy sets in
Hospital-at-home services are widely seen as a promising way to drive health care costs down while meeting patients in their preferred setting – and that promise has spurred notable innovation and investment. However, the promise of hospital-at-home has yet to be fully realized, as regulatory limbo has relegated this model to wait-and-see status – the Acute Hospital Care at Home waiver program has been kept on life support by a series of short-term extensions, making investments in the space risky.
Legislators have an opportunity to pass the Hospital Inpatient Services Modernization Act, which would extend the waiver program for five years – but time is running out to do so. The program is currently set to expire on Jan. 30, along with other telehealth measures.
But with a long history of short-term extensions, even historically bipartisan support for hospital-at-home services may not be enough to give the waiver program the attention it deserves from lawmakers to get the bill across the finish line by the deadline.
And the industry has already witnessed fallout from waiver uncertainty. Inbound Health, a hospital-at-home enablement platform that had garnered over $50 million in investment dollars, shut down at the end of November, citing regulatory uncertainty.
The fact that such a well-funded operation failed to identify a path forward signals just how urgently this part of the at-home care market needs greater certainty and security. With that unlikely to happen in 2026, the hospital-at-home sector is likely to atrophy; while some well-capitalized players will hold steady, innovation will stall, growth will slow or reverse, and a future in which hospital-at-home is fulfilling its potential will become more distant .
Blocking vertical vision
In 2025, one of the top news pegs was the completion of the long-fought UnitedHealth Group (NYSE: UNH)/Amedysis deal. This acquisition exemplifies a years-long trend of increasing vertical integration in the industry – but this trend is set to change in 2026.
When President Donald Trump took office, there was a widely held belief that the UnitedHealth deal would go through, and that would unlock further major consolidation in the home health space during a period of more relaxed antitrust enforcement. But, despite the UnitedHealth deal crossing the finish line, that is not likely to happen in 2026. So-called payviders find themselves under increasing political pressure and facing more public skepticism and media criticism.
A bill proposed in September, the Patients Over Profits Act, is set to prohibit insurers from purchasing Medicare home health providers. If passed, it would stop companies like UnitedHealth from acquiring health care providers that are reimbursed through Medicare Part B or Part C.
“Breaking up UnitedHealth’s insurance and physician businesses is the first step toward building something better, where every American is able to get the care they deserve at a price they can afford,” one of the bill’s sponsors, Rep. Pat Ryan (D-N.Y.), said.
This is not the first time lawmakers have taken aim at vertical integration. Mega-payviders have come under fire for using their provider arms to inflate care prices and skirt federal regulations, prompting calls for the Department of Health and Human Services (HHS) Office of Inspector General (OIG) to evaluate vertical integration’s impact on costs and payviders’ ability to evade requirements.
Rather than the year of rapid vertical expansion that might have been expected under the Trump presidency, the home health industry can expect 2026 to be a year of retrenchment – particularly if the Democrats gain power in Congress in the midterms. Vertical integration will not stop, but it will slow.
