Navigating a Shifting Political Landscape

The year began with considerable apprehension surrounding the incoming administration and its potential impact on vital healthcare programs. Providers closely monitored potential changes to Medicare, Medicaid, and Medicare Advantage, bracing for policy shifts that could reshape the financial foundations of the industry. Concerns centered on the potential for reduced funding and increased regulatory scrutiny, forcing organizations to proactively assess their risk exposure and develop contingency plans.

One immediate challenge arose from stringent immigration policies, which exacerbated an already critical staffing shortage. Reports surfaced of frontline workers leaving the field, creating further strain on an already stretched workforce. This situation underscored the industry’s reliance on a diverse labor pool and the need for sustainable workforce development strategies. Providers reported losing front-line workers and fear among legal resident caregivers.

The Specter of Reimbursement Cuts

Financial pressures dominated much of the year. The proposed 6.4% cut to Medicare home health payments for 2026 sent shockwaves through the industry, threatening the sustainability of many agencies. While the final rule offered some relief with a 1.3% cut, amounting to $220 million, the ongoing cycle of cuts raised serious concerns about long-term viability. As Mollie Gurian, vice president of policy and government affairs at LeadingAge, told HHCN, “Without Congressional intervention, these ongoing clawbacks will hang over the industry for years, limiting agencies’ ability to expand, invest in technology, and serve those who need care.”

Simultaneously, looming Medicaid cuts included in the One Big Beautiful Bill Act (OBBA) created further uncertainty. Although the cuts didn’t directly target home- and community-based services, providers feared trickle-down effects as states faced budgetary constraints. Dr. Steven Landers, CEO of The National Alliance for Care at Home (the Alliance), said in June, “We know when states get this type of pressure, they will be in a position of having to either cut back on rates, cut back on benefits, cut back on innovation, or waiver programming across the board.”

Did You Know?:

Consolidation and Restructuring

2025 witnessed significant consolidation within the home-based care sector. The acquisition of Amedisys by UnitedHealth Group (NYSE: UNH) marked a pivotal moment, signaling a trend toward vertical integration. The deal, despite initial antitrust concerns, ultimately moved forward, creating a healthcare behemoth with a substantial home health presence. The required divestitures, snapped up by the Pennant Group Inc. (Nasdaq: PNTG) and BrightSpring Health Services (Nasdaq: BTSG), further reshaped the competitive landscape.

However, consolidation wasn’t the only story. Bayada Home Health Care’s decision to lay off 10% of its headquarters staff, citing reimbursement challenges, served as a stark reminder of the financial pressures facing even well-established organizations. Bayada’s layoffs prompted concerns about similar actions across the industry. The company also underwent significant leadership transitions, with CEO David Baiada stepping down and Bryony Winn appointed as the first non-family CEO.

The New York CDPAP Crisis

Perhaps the most protracted and challenging issue of the year was the overhaul of New York’s Consumer Directed Personal Assistance Program (CDPAP). The transition to a single fiscal intermediary, Public Partnerships (PPL), was plagued by extensions, lawsuits, restraining orders, and protests. Addus HomeCare Corporation’s (Nasdaq: ADUS) decision to exit the New York market, citing minimum wage pressures and program challenges, highlighted the severity of the situation. Addus CEO Dirk Allison stated, “We do not have the opportunity to offer all three levels of home care services there, and the well-documented program challenges and start-and-stop changes in the state’s approach have consumed a disproportionate amount of management resources for limited financial contribution.”

The legal battles culminated in a judge approving a class action lawsuit settlement, but the transition continued to disrupt care delivery and create instability for providers and consumers alike. Some providers that remained in the state reported losing significant fractions of their businesses, layoffs and closures.

What strategies can home-based care organizations implement to mitigate the risks associated with fluctuating reimbursement rates and regulatory changes? How can the industry advocate for policies that support sustainable growth and access to care?

Pro Tip:

Frequently Asked Questions About the 2025 Home-Based Care Landscape

• What were the primary drivers of uncertainty in home-based care in 2025? The transition to a new presidential administration, potential changes to Medicare and Medicaid funding, and industry consolidation were key factors.
• How did the proposed Medicare cuts impact home health agencies? The proposed 6.4% cut slowed dealmaking and raised concerns about the financial sustainability of many agencies.
• What was the central issue surrounding the New York CDPAP overhaul? The transition to a single fiscal intermediary (PPL) was fraught with challenges, leading to provider exits and disruptions in care.
• What role did acquisitions play in the home-based care sector in 2025? Acquisitions, such as UnitedHealth Group’s purchase of Amedisys, signaled a trend toward vertical integration and consolidation.
• How did staffing shortages affect the home-based care industry in 2025? Stringent immigration policies exacerbated existing staffing shortages, putting further strain on providers.