As CMS proposes reductions that wipe out home health payments, providers must face cost pressures and innovate to maintain solvents and protect access to care.
According to a recent webinar hosted by Wellsky, to withstand the potential reductions and updates included in the payment rules proposed in 2026, home health providers must arm innovative technology-centric strategies, including predictive analytics and generator AI, and advocate for benefits.
“We need to innovate the way CMS gets out of the box we put in,” said Cindy Campbell, senior director of advisory services at Wellsky, in a webinar presentation Wednesday.
Based in Overland Park, Kansas, Welsky is an acute technology company that uses software and analytics to help providers achieve better results at lower costs. The company is working with approximately 20,000 home health providers.
Last month, the Centers for Medicare and Medicaid Services (CMS) in the US released payments for its 2026 annual home health proposal. The rules include a 6.4% overall cut to home health care, a drop of an estimated $1.135 billion compared to 2025.
The proposal also includes a 2.4% update, a 3.7% decrease due to behavioral adjustments, and a 4.6% decrease reflecting the net impact of the proposed temporary adjustments and a 3.2% market basket update.
Campbell noted, like many other industry insiders, that access to care would be significantly reduced if rules passed without changes.
“For some people, access to care is a significant risk if the cut goes as proposed, so we have to stand up,” she said. “We have to be industry advocates.”
The rule adds per-beneficiary Medicare expenditure of acute care (PAC) setting measurements to the expanded Home Health Value-Based Purchasing (HHVBP) model, which Campbell said would effectively compete with providers at cost.
“(Medicare expenditures per beneficiary in a PAC setting) will be added to the claims-based measures of 10% in the larger agency cohort, with a 12% impact added to agencies in the smaller cohort,” Campbell said. “It's quite a bit, especially if you're looking to prevent hospitalizations but are trying to compete for that at a lower cost.”
Still, Campbell said providers have already raised questions about how to reduce total operating costs, but they are already competing for costs.
Reducing costs and increasing advocacy
In reducing costs and maintaining viable costs, employing innovative technology tools such as predictive analytics and generation AI is important as providers navigate the impact of CMS cuts, Campbell said.
“How can we read the risks of the patients we serve?” she asked. “Let's use these predictive analytics. Think about ways to increase productivity and reduce total costs per visit. You can't help but think of the gift of generative AI and surrounding listening.
Some providers are already using AI tools to streamline results and assessment information set (OASIS) management.
Campbell also urges employees to accept remote patient surveillance (RPM) as a way to increase home care.
It is also important for providers to look at current performance values, share them with key stakeholders in the agency, and look for opportunities to improve quality.
“When can we stop things in the old ways and start it in a new way that saves time and effort,” Campbell said. “How is that impact measured? How do you know that this is working for us? What is the data feedback loop we need to provide? This is a strategic way to start thinking about what to do next, when it comes to immediate action.
Ultimately, Campbell suggests that leaders need to analyze the financial impact of the proposed rules on their businesses. Leaders also need to have a strong understanding of the impact of wage indexes and the impact of quality reporting programs.
In addition, companies of all sizes should listen to and use the public comment period, which is open until August 29th.
“You can think of where you have expertise, comment on this and fill your head with your voice,” Campbell said. “Please. They need to hear from you. … They'll hear from all the big tech companies, big companies, but they'll make sure your voice is there. Given these cuts, every voice we can get is really important.”
