This article is part of the HHCN+ membership
The home care industry is eagerly looking forward to the advancements in the Home Hospital (HAH) movement. Growth in the HAH model benefits health systems with existing programs, but home health providers are gaining from the wider adoption of this approach.
The HAH movement has been extremely popular since the launch of the Acute Hospital Care (AHCAH) program in 2020, allowing hospitals to qualify for Medicare exemptions to treat patients at home. The exemption is currently scheduled to expire in September, but the health system and lawmakers have introduced a law extending the exemption until 2030. Patients are reportedly very satisfied with the model, indicating that the model speeds up recovery time.
Many of the providers I have spoken about in my research are interested in the HAH program because it is more cost-effective and provides a better patient experience. However, some providers and payers are reluctant to adopt the model due to concerns about the future of the exemption.
Continuing the exemption programme will ease these concerns and help more providers create the environment they need to engage in HAH models and more severe home care. Providers may increase the greater demand for services, a patient base and source of revenue.
Long extensions and runways for further expansion will strengthen critical referrals and become increasingly involved in value-based reimbursement arrangements for provider tools.
This week's exclusive member-only HHCN+ update will show you some of the reasons why home health providers should welcome the HAH model and provide analysis and important takeaways.
Benefits for Home Healthcare Providers Partnering with the Health System to Provide Acute Care in Patients' Home Home Healthcare Industry How HAH Waiver Programmes Reshape the Home Healthcare Industry How it strengthens the role of home healthcare providers in the healthcare ecosystem
Exemption issues
In early July, Home Health Care News reported that a bipartisan group of lawmakers had introduced the Hospital Inpatient Services Modernization Act. If enacted, the Act allows hospitals to extend the HAH program for an additional five years.
Rep. Lloyd Smucker (R-Pa.), one of the bill's supporters, said: “Innovative care models, such as providing acute care through hospitals at home, provide low-cost, high-quality care to patients.” “Expanding this common sense policy is a clear victory for both patients and taxpayers.”
In addition to expanding the exemption program, the bill requires the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) to conduct studies comparing home care with inpatient care. The findings of the survey will be used to manage future programs.
So far, strong evidence pointing to the effectiveness and benefits of HAH, we expect this finding to strongly support the continuation of the exemption program, or perhaps the establishment of it as a permanent policy.
While some people in the space have adopted an “watch-and-see” approach due to uncertainty about the ongoing short-term extension of exemptions, other HAH players have been developing plans and continuing to move forward.
As of March 17, 2025, 400 hospitals in 143 health systems in 39 states have been exempted, according to the American Hospital Association. This indicates an increase in 22 hospitals and three health systems since November 2024.
This growth trajectory can be recharged if a new invoice is passed. With a clear interest in continuing the five-year runway and subsequent programs, the bill will encourage the scope of providers who have previously been silent about participating in HAH.
Impact on home care providers
Engaging in the HAH model is strongly in line with the provider's best interests. From directly raising client census and revenues to helping providers overcome one of the closest issues facing them – the workforce shortage, the bill can reassure providers, motivate providers to recruit and unlock a variety of concrete benefits.
Shifting acute levels of care from hospitals to patients' homes involves a wide range of at-home services and support. According to the American Hospital Association, hospitals employ the HAH model, which requires home care providers such as nurses, therapists and home health aides. This expansion will lead to a larger client base and higher revenue for the institutions providing these services.
Patients who need a higher level of care need more specialized skills and services from home health providers. This could provide home healthcare institutions with the opportunity to bill for a wider range of services, leading to increased financial stability.
Some studies have also shown that, similar to studies by the Bipartisan Policy Center, HAH programs can also promote recruitment and retention in the home health sector by providing more flexibility to caregivers. As the labor shortage continues, this is welcome news.
In other words, the HAH model could enhance collaboration between hospital-level care providers for home and home health services, as these organizations often “offload” to external vendors, similar to their partnership with Mass General Brigham's Best Buy Health.
A more powerful, coordinated approach to care
These kinds of partnerships between home health institutions and hospital systems enhance home health by allowing these institutions to play a greater role in acute care and to promote better collaboration with other providers.
HAH programs typically include interdisciplinary teams such as nurses, physicians, therapists and social workers. With the advent of more HAH programs, home health agencies can expand their services beyond traditional home health, which could potentially incorporate acute care, telehealth and remote patient surveillance, as the National Institutes of Health has pointed out.
By expanding the range of services, home healthcare institutions can increase revenue and improve financial stability and sustainability. Hospitals, on the other hand, can use these partnerships to mitigate the challenges caused by shortages.
Furthermore, these programs can be more economical than staying within a hospital by reducing the overhead costs associated with hospital operations, as noted in Health Recovery Solutions. This benefit benefits both the healthcare system and the patient.
Finally, the HAH model promotes innovation in health care delivery by promoting the adoption of new technologies and care methods. Home care agencies can play a pivotal role in this innovation and will continue to explore new approaches to deliver care within a home environment.
Improving patient outcomes
The simple victories offered by the HAH model include patient satisfaction and better outcomes as patients are receiving care in a more comfortable and convenient environment. According to Oregon Health & Science University in Portland, these programs are often less stressful, faster recovery times and less infections in hospitals.
While at home, patients have more control over their daily routines, such as sleep, diet, and activities, which can affect their well-being. Families can be more involved in the care process and provide emotional support and help. I know comfort was something I missed during my extended hospital stay. I would have loved being home on the couch and watching TV without constant interruption from hospital staff and other patients.
The Novant Health New Hanover Regional Medical Center launched its HAH program in March 2024 and reported 100% patient satisfaction. The team sees this success as focusing on sleep, nutrition and mobility. Patients are allowed to sleep uninterrupted with a prepared meal from the hospital kitchen and are encouraged to move freely around at home.
Patients have easy-to-use tablets that support smooth communication with care teams, including access to nurses 24/7. The program also uses remote patient monitoring to check vital signs and provide essential medical devices.
A federal report to Congress by the Centers for Medicare and Medicaid Services (CMS) on the HAH Initiative supports this by demonstrating that acute home care causes lower mortality, resulting in lower post-discharge spending compared to traditional inpatient care, and receives positive feedback from patients and caregivers.
So far, evidence pointing out the fact that HAH improves results allows providers involved in the HAH model and investing in thorough outcome tracking to negotiate better reimbursement rates using evidence of stored healthcare dollars.
More evidence of improved outcomes can help providers negotiate value-based or other alternative payment models.
A call to action
Various health systems, advocacy groups, and national associations are constantly urging legislative leaders to secure the future of their HAH programs by extending the AHCAH exemption for five years.
“The AHCAH program is a continuation of continuous, bipartisan policies over the past five years and does not lead to new costs,” Health Home's Move Home wrote in a letter to Congress. “This innovative model has already proven that it improves outcomes, reduces costs and meets patients where they are. The AHCAH program has a rare combination of patient-career satisfaction and high quality, with shorter stays.
The letter said another extension of the exemption would effectively build the bridge from the demonstration to a more permanent model, providing more certainty for hospitals that are now “waiting for clarity of regulations.”
The American Medical Association (AMA) also praised House Energy and Commerce Committee leaders for including an expansion of the flexibility of the AHCAH exemption through 2029 as an amendment to the 2024 Telehealth Modernization Act.
The waiver program is set to change the relationship between home health care providers and healthcare systems, vision levels and reimbursement negotiations, but most importantly, it will provide comfortable and quality care where patients want most.
By expanding this flexibility for five years, “we will allow for equal development of home-based services everywhere, making it available to hospital inpatients for patients who need it, allowing patients who want to receive treatment at home to build the capabilities they need for hospitals without increasing the costs of the health system,” James L. Madara said AMA's executive vice president and CEO.
