Medicare will pay home health agencies less, and tie more payments to patient outcomes
What happened
Medicare plans to cut payments to home health agencies by 2.8% in 2026. It will also expand a program that links payments to how well agencies improve patient health, rather than just the services they provide.
Why it matters
Home health agencies have seen their payments rise steadily for years. This proposed rule signals a shift toward tighter budgets and more accountability for patient results. Agencies will now have to prove they are improving patient health to get full payment, which could change how they operate and what services they prioritize.
The signal
Watch for how many home health agencies close or merge in the next two years, especially smaller ones, as they adapt to lower payments and new performance requirements.