This article is part of the HHCN+ membership
The government shutdown has delayed what would normally be the release of the 2026 Medicare Home Health Final Rule, leaving health care providers in limbo. As we wait for the revelation, many are already planning strategies for the worst.
Home health care providers have warned that if the final rule reflects the proposed version, which includes an effective 9% reduction in reimbursement rates, it would push the industry into an “absolute state of emergency.”
Some providers expect to be significantly impacted by the proposed rule more than others. For Empath Health CEO Jonathan Freese, the answer is unthinkable.
“If the rule really does go ahead with this 9% cut, we could decide to go in a different direction and be one of the agencies that pulls out of home health care altogether,” Freese told Home Health Care News. “For us, we're already in the red. … That's one of the options we're considering. Potentially we'll be one of the agencies that gets shut down.”
Empath Health, based in Clearwater, Florida, is a not-for-profit health network that provides services such as hospice, home health, palliative care, Program of Comprehensive Care for the Elderly (PACE), and adult day care. The company is also the parent company of 17 affiliated companies and two charitable foundations. This provider serves more than 81,000 people annually.
While preparing for the worst-case scenario, Freese expressed cautious optimism about the final rule.
“I really can't think of anything more we could have done as an industry to advocate, educate, and hopefully inspire policymakers and legislative leaders about how important home care is to this country,” he said. “So if this rule were to actually go into effect…it would be an absolute emergency. But I'm cautiously optimistic.”
In fact, the proposed home health rule received more than 952,000 public comments from home health practitioners and other related industries.
absorb cuts
Some providers say they will weather the potential storm of deep interest rate cuts largely unchanged.
Pennant Group (NASDAQ: PTNG) has done everything it can to advocate for what it believes is the right path for patients, Chief Medical Officer Dr. Derrell Walker told HHCN. With the advent of the proposed rule, Pennant expanded its existing advocacy efforts to include grassroots strategies.
Pennant has petitioned against the rate cuts included in the proposed rule, but Pennant leaders have repeatedly said they do not expect any major negative impact if CMS implements the 9% cut. Despite this, the company is still taking steps to prepare for a significant Medicare rate cut.
“Internally, we've been preparing by working with all the agencies to address potential issues and what the cuts will ultimately look like and all of that,” Walker said. “Yes, right now we're shuffling. And on top of that, we're continuing to grow. That's what's exciting as well. Like anything else, we're confident that we'll get through this. We'll adjust and adapt. Our model is built that way, but still, the overall feeling is that it's not the right direction.”
Pennant is a holding company for home health and hospice agencies and senior living communities in 17 states. Its footprint has recently expanded through several transactions, including the acquisition of a home health and hospice agency sold as part of UnitedHealth Group's (NYSE: UNH) acquisition of Amedisys.
In Walker's view, the recently released Final Physician Compensation Schedule includes an emphasis on preventive medicine, suggesting that CMS may be moving in a positive direction.
Despite this, Walker said Pennant is “trapped” and ready for an uncomfortable rate cut.
HealthView Home Healthcare Services is already restructuring its business to absorb the cuts included in the proposed rule, HealthView CEO Steven Gonzalez told HHCN. Gonzalez said that even if the final rule did not include significant rate cuts, he would still be satisfied with the efficiency adjustments the company made.
Based in Cerritos, Calif., HealthView provides services including private on-call nursing, skilled nursing, respite care, personal care and companionship.
Still, Gonzalez said it's becoming increasingly difficult for home health care providers to rethink their strategies.
“It's hard to adjust your strategy because you're always in surprise mode for certain things,” Gonzalez said. “The past two years have probably been the most difficult because the changes have been fluid.”
Shift in advocacy
Industry advocates are also preparing to approach scenarios that would significantly reduce reimbursement rates for home health care.
Dr. Stephen Landers, CEO of the National Home Care Alliance (Alliance), said the organization was already in a “war room situation.” Landers told HHCN's sister publication Hospice News that if the final rule is similar to the proposed rule, the organization is asking Congress for support.
“We worked diligently with the two leaders of the House Ways and Means Committee, Kevin Hahn and Terry Sewell, and they introduced a bipartisan bill, the Family Health Security Act of 2025,” Landers said. “This legislation is essentially a contingency plan. So if CMS can't get this right, it's an opportunity to pause the cuts for two years and work on these methodologies.”
If CMS recognizes that the proposed rule is “wrong” and revise its methodological approach, a contingency plan will no longer be required.
“But we're not going to sit back and think they're going to do it right,” he said.
