VA Fee Schedule Cuts Threaten Veteran Home Care Access in 2026
The U.S. Department of Veterans affairs (VA) has released its 2026 fee schedule, triggering significant concerns within the home care industry. The new schedule introduces ample rate cuts for home health aide and homemaker services in Texas and New Mexico, with potential ripple effects across the nation. These reductions pose a direct threat to veterans’ access to vital care and the financial stability of agencies serving them.
Key Changes in the 2026 VA Fee Schedule:
* Texas: While five areas within Texas will see modest fee increases, much of rural Texas faces a dramatic 43% reduction in reimbursement rates.
* New Mexico: The state-wide rate cut in New Mexico is 19%.
* Inflationary Adjustment Omission: For the first time in several years, the fee schedule does not include an across-the-board 3% inflationary increase.
* Geographic disparities: The VA maintains a single rate for entire states like Texas and New mexico, failing to account for the varying costs of care delivery across diverse regions.
Why These Cuts Matter: Impact on Veterans & providers
These rate reductions aren’t simply numbers on a spreadsheet; they represent real-world consequences for veterans and the agencies dedicated to their care. Eric Reinarman, Vice President of Government Relations at the Home Care association of America (HCAOA), explains the core issue: “When reimbursement doesn’t keep pace with inflation, providers are forced to absorb rising costs – particularly labor, payroll taxes, insurance, training, and compliance – creating a widening gap between the cost of care and what programs reimburse.”
This financial strain will inevitably lead to:
* Limited Admissions: Agencies may be forced to restrict the number of veterans they can accept as new patients.
* Reduced Service Areas: Providers may need to scale back the geographic areas they serve, particularly in rural communities.
* Prioritization of Contracts: Agencies will likely prioritize contracts offering full cost of care reimbursement, potentially leaving VA-funded cases underserved.
* Difficulty Fulfilling Authorized Care Hours: Veterans may struggle to receive the full amount of care their physicians have prescribed.
The Rural Care Challenge: Mileage & Travel Time
The impact is particularly acute in rural areas.The VA currently does not reimburse for mileage or travel time, significantly diminishing margins for agencies serving veterans in expansive, geographically challenging regions. Compounding this issue, the average length of visit in Texas is currently at a record low of 3.4 hours, further squeezing provider resources.
A Potential blueprint for Nationwide Cuts?
Industry experts fear the Texas and New Mexico cuts could serve as a precedent for similar reductions in other states. The VA’s methodology raises concerns about a broader shift in rate-setting practices.
“Any time rates are cut without reflecting the actual cost of care, it begs the question of whether similar changes could be applied elsewhere,” Reinarman warns. “Rate setting must track real-world cost drivers and local market variation. Home care is labor-driven and delivered in the home, meaning geography and travel are critical factors. A one-size-fits-all approach simply doesn’t work.”
HCAOA’s Call to Action: Localized Rates & Reconsideration
The HCAOA is actively advocating for a course correction, urging both VA leadership and lawmakers to reconsider these rate reductions. Key demands include:
* Localized Rate Setting: The VA should establish rates based on specific localities rather than imposing a single rate across large, diverse states.
* Reinstatement of Inflationary Adjustment: The 3% inflationary increase should be reinstated in future fee schedules.
* Mileage & Travel Reimbursement: Consideration should be given to reimbursing providers for mileage and travel time, especially in rural areas.
How Agencies Can Help:
The HCAOA is encouraging VA-contracted agencies to proactively share concrete operational data demonstrating the potential harm of these cuts. This includes:
* Caregiver Wages: Detailed data on current wage rates.
* Travel Time: Documentation of average travel times to patient homes.
* unfilled Shifts: Data on the number of shifts agencies are unable to fill due to staffing shortages.
* Service Reductions: Specific examples of service reductions agencies would be forced to make if the cuts are implemented.
“The stronger the evidence we present to the VA, the more likely they are to act,” Reinarman emphasizes. “Sustained engagement and clear data demonstrating the impact on access are crucial
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