June 30, 2025 Washington, DC — Statement from Katie Smith Sloan, president and CEO, LeadingAge, the association of nonprofit providers of aging services, on the Calendar Year (CY) 2026 Home Health Prospective Payment System Proposed Rule, announced today:

“The 6.4% cut to the current rate that the Centers for Medicare and Medicaid Services (CMS) proposes for home health providers will, if implemented, be a death knell for many quality agencies. CMS, since CY2023 has slashed payments by nearly 9%; add today’s more than 6% reduction, and for many agencies, especially the 7% of all who are nonprofit, the administration’s announcement is essentially pushing them to exit the business, close or severely limit services.

For older adults and families in need of care, that’s bad; for many, already, access to care is challenging. Between 2019 and 2023, the number of skilled home health agencies that treated more than 10 fee-for-service patients annually decreased or remained the same in 94.1% of U.S. counties, according to Trella Health. Half of U.S. counties have five or fewer home health agencies per 1,000 square miles, with many rural areas having access to only one agency or no agencies serving more than 10 patients. These are concerning statistics considering the growth in the older adult population and the focus on receiving care in the home.

Now consider that on top of this significantly lower Medicare fee-for-service payment rate and inadequate reimbursements from Medicare Advantage, the financial landscape that providers will be navigating when the CY2026 rate goes live will almost certainly include reduced federal reimbursement for Medicaid services. The health care system is interconnected. Most home and community-based services are optional Medicaid benefits. If states are facing fiscal shortages, those services will likely be cut, leading to less support for older adults and families in need of HCBS care. Agencies that offer the Medicaid home health benefit will be squeezed on both ends: cuts from state Medicaid money and reductions in federal Medicare fee-for-service rates.

Research shows that older adults want to age in home and in community. But for them, their families, and our mission-driven nonprofit members who serve them, today’s announcement, amplified by Congress, which is moving toward the largest Medicaid cuts in history, is a bleak indication of future home-based care options.”