WASHINGTON, D.C. — A new analysis from the Commonwealth Fund finds that declining use of Medicare-covered home health services reflects not only enrollment shifts to Medicare Advantage but also the cumulative effects of federal payment policy — raising questions about whether vulnerable older adults can access care outside of costly institutional settings.
The issue brief, “Improving Access to Medicare Home Health Care: Policy Considerations,” was published in July 2026 by health policy researchers Barbara Lyons and Jane Andrews and was based on interviews with more than 20 experts in Medicare policy and home health services.
Payment Policy Named as a Primary Driver
According to the brief, payment policy changes — combined with quality incentive programs — have contributed to falling utilization among traditional Medicare enrollees, beyond what can be explained by the broader shift to Medicare Advantage plans. Additional factors identified by the researchers include Medicare Advantage underpayment and utilization controls, narrow provider networks, home health agency referral practices, workforce shortages, and limited agency availability in some regions.
The researchers warned that these combined pressures may be restricting access for the beneficiaries who stand to benefit most from home-based care, and could be pushing patients toward higher-cost institutional settings such as skilled nursing facilities.
“Continued declining trends in use and payment of Medicare home health care raise concerns about potential increased reliance on higher-cost institutional care and future Medicare spending growth,” the brief stated.
A Pattern of Cuts
The findings arrive after four consecutive years of permanent reductions to Medicare home health payments. The Centers for Medicare and Medicaid Services (CMS) finalized a 1.3% aggregate payment decrease for calendar year 2026 — equivalent to roughly $220 million compared to 2025 levels — after originally proposing a steeper 6.4% cut.
Since 2015, Medicare home health payment updates have increased just 5.6%, according to industry data — a fraction of the 36.4% growth seen in skilled nursing facility payments and the 34.1% growth in inpatient rehabilitation facility payments over the same period.
The divergence has contributed to what the National Association for Home Care & Hospice and other advocacy groups describe as a growing gap between reimbursement rates and the actual cost of delivering care.
Access Gaps Documented Nationally
The access consequences have been measurable. In 2024, an estimated 40% of patients referred to home health services following a hospitalization did not receive care, according to data reported by McKnight’s Home Care. In some areas of the country, that rate reached two-thirds or more of referred patients.
Data from Homecare Homebase, which represents approximately half the home health market, recorded more than 11.9 million referrals industry-wide in 2024, with more than 4.2 million patients never entering care.
The Commonwealth Fund researchers also found emerging evidence that Medicare Advantage enrollees may receive fewer home health visits and experience lower functional improvement compared to their traditional Medicare counterparts.
MedPAC and the Industry Diverge on Margins
The research comes as the Medicare Payment Advisory Commission (MedPAC), a nonpartisan congressional advisory body, maintains that home health agency finances remain healthy. In its March 2026 Report to Congress, MedPAC reported a Medicare fee-for-service margin of 21.2% for home health agencies in 2024, projected to decline modestly to approximately 19% in 2026. Based on those figures, the commission voted in January 2026 to recommend a 7% cut to base payment rates for calendar year 2027.
Home health providers and patient advocates have pushed back sharply on that recommendation. The Alliance for Home Health Quality and Innovation called MedPAC’s position “dangerous and misguided,” citing access metrics that suggest reimbursement is already insufficient to sustain adequate staffing and geographic reach.
Visits per episode have declined since the 2020 implementation of CMS’s Patient-Driven Groupings Model (PDGM), which removed financial incentives tied to therapy volume. MedPAC has described the reduction in visits as a positive shift toward need-based rather than incentive-driven care delivery, while providers argue the change has reduced services for patients who need them.
Policy Reforms Under Consideration
The Commonwealth Fund brief outlines several targeted reforms that could improve home health access, including strengthening referral pathways, addressing Medicare Advantage network and coverage practices, supporting workforce pipeline development, and adjusting payment policy to better reflect care costs in underserved regions.
Lyons and Andrews note that well-targeted home health services have the potential to reduce avoidable spending growth in Medicare by helping patients avoid preventable hospitalizations and nursing facility placements.
Why This Matters for Home Care
For families and caregivers arranging home-based care for aging adults, reduced availability of Medicare-covered home health services means more of the daily care burden falls on family members — often with less professional support to manage complex medical needs safely at home.
As access to skilled home health services grows more constrained, the physical environment patients recover and live in takes on greater importance. For families managing care at home with less professional support, equipment that supports safe repositioning, fall prevention, and proper positioning can help bridge that gap. SonderCare’s home hospital beds — including the Aura Premium and Aura Platinum, which feature FallSafe ultra-low height of 10 inches, full Trendelenburg tilt, and caregiver-friendly hi-lo adjustment from 10 to 39 inches — are designed to help families provide medically appropriate care in a residential setting.
If your family is navigating home care with limited Medicare home health support, explore SonderCare’s home hospital beds at sondercare.com/beds or speak with a care specialist to find the right configuration for your situation.
Sources: McKnight’s Home Care; Commonwealth Fund, “Improving Access to Medicare Home Health Care: Policy Considerations,” July 2026 (Barbara Lyons and Jane Andrews); Medicare Payment Advisory Commission, March 2026 Report to Congress; CMS Calendar Year 2026 Home Health Prospective Payment System Final Rule; Home Health Care News.
