This text is a part of your HHCN+ membership

In 2025, Medicare-certified residence well being suppliers confronted dramatic uncertainty. The Facilities for Medicare and Medicaid Companies (CMS) proposed the biggest minimize ever to the Medicare residence well being care fee, sparking outrage amongst suppliers, workers, and sufferers, leading to a a lot much less painful ultimate fee minimize.

As they get better from a terrifying 2025, residence care suppliers face additional problems in 2026. The sector can anticipate extra layoffs in 2025 after a number of high-profile rounds and face a brand new kind of obligatory fee mannequin. Key items of laws can even make or break features of the house well being care trade, significantly involving the hospital-at-home market and payer tendencies.

In 2026, suppliers who concentrate on future-proofing their service traces and resisting pressures on high quality of care may have the chance to usher within the subsequent period of residence care and grow to be the middle of healthcare’s shift to the house.

Curious what we predicted final 12 months? Revisit our 2025 predictions right here.

A 12 months of layoffs

Within the residence care trade, the everyday workforce story revolves round suppliers’ efforts to recruit and retain workers. However final 12 months, layoffs made notable headlines.

In June, residence care big Bayada House Well being Care laid off 10% of its headquarters employees, citing a troublesome reimbursement surroundings. In September, DispatchHealth, a frontrunner in hospital-based care, scaled again operations in ten markets, shedding workers.

Different suppliers additionally needed to take comparable measures.

“You may improve a workforce tenfold by augmenting them with know-how, however the actuality is that we needed to lay individuals off, similar to many different residence care organizations. [companies] needed to do,” Healthview CEO Steven Gonzalez beforehand instructed HHCN.

In 2026, suppliers have a number of choices to alleviate a number of the pressures that led to layoffs in 2025, significantly via using efficiency-enhancing applied sciences. However with Medicare residence care charges being minimize once more and ongoing staffing challenges, suppliers will more and more be compelled to reduce their workforces to avoid wasting prices. The key suppliers that have been within the information due to the layoffs in 2025 have been simply the primary cracks within the ice that’s now about to interrupt.

Resistance towards ‘enshittification’

House care suppliers are attempting to rework their operations to concentrate on effectivity, typically counting on new AI instruments. Expertise is not non-compulsory – these transformations are obligatory for the trade to outlive and regularly place the house on the heart of the healthcare ecosystem.

Nevertheless, by 2026, suppliers should make sure that sufferers obtain a person-centered, high-quality expertise whereas nonetheless makes use of AI. If they do not, they threat falling into the entice of ‘enshittification’. This time period refers to a decline in high quality inside digital platforms – consider the proliferation of AI content material on Fb that drowns out messages from a person’s actual associates.

House care suppliers in 2026 might want to guarantee they prioritize AI instruments, with out relying a lot on automation that worker and affected person experiences really feel soulless. As operators transfer away from back-office AI know-how to extra employee- and patient-focused know-how, robust AI high quality management will likely be of paramount significance. As many healthcare executives have famous, AI – or any know-how for that matter – ought to ideally allow extra significant human connections between healthcare suppliers and sufferers; flaws within the AI ​​or poorly thought out use instances, as it could be an inevitable rising ache because the know-how spreads and evolves, however good suppliers will restrict these destructive results.

That’s to say, as know-how’s early adopters will spend 2026 chasing the cutting-edge know-how, these trying to keep or enhance worker and affected person retention should enter the waters of tech-first innovation with a nod to old-school techniques: the human contact.

Centered on changing into a TEAM participant

In 2026, many residence care suppliers will face a brand new obligatory fee mannequin – and people not concerned within the mannequin will likely be paying shut consideration.

The Facilities for Medicare and Medicaid Companies (CMS) mandated bundled Reworking Episode Accountability Mannequin (TEAM) went into impact on January 1, 2026 and is poised to propel the house well being trade additional into the world of different fee fashions resulting from its broad scope and clear push to ship extra sufferers to extra reasonably priced care settings.

As well as, TEAM distinguishes itself from different obligatory fee fashions: it compares suppliers inside a big area.

“Different bundled fee fashions have been historic supplier pricing fashions, which suggests you simply needed to beat your self out of the previous,” Brian Fuller, director of ATI Advisory’s value-based care design and supply follow, beforehand instructed HHCN. “This can be a regional goal value mannequin, which suggests you must be higher than your area.”

By 2026, suppliers concerned within the mannequin’s broad scope of 743 taking part hospitals will face this regional competitors. To obviously talk their worth to their friends, suppliers will concentrate on analytics and compelling pitches to hospitals to speak their worth – and greater than ever earlier than, they have to deploy the fitting techniques and processes for significant and aligned collaboration with hospital companions.

The tip of the pure-play supplier

In 2025, the house well being care trade took motion towards a singular menace: the biggest minimize within the Medicare fee fee for residence well being care ever proposed.

Whereas prioritizing advocacy work, suppliers rushed to plan for the worst-case state of affairs. Some thought-about scaling again their residence care choices to develop their concentrate on different service traces.

“If the rule truly strikes ahead with this 9% discount, there’s a chance that we’ll be a type of companies that decides to go in a special path and withdraw from expert residence care altogether,” Jonathan Fleece, CEO of Empath Well being, beforehand instructed House Well being Care Information. “Expert residence well being care is already operating at an working loss for a lot of companies. That is without doubt one of the choices on the desk, if we may probably be a type of expert companies that might repurpose residence well being care and concentrate on our core enterprise of end-of-life care and frail older adults.”

Though the ultimate rule included a a lot softer fee minimize than initially proposed, Medicare funds have been nonetheless decreased, offering a compelling argument for suppliers to focus or develop into areas of their enterprise which are much less prone to be minimize.

Moreover, the concern suppliers felt in 2025 won’t be simply forgotten and can drive suppliers to show to companies reminiscent of hospice care to handle reimbursement threat via diversification.

Hospital-home atrophy happens

Hospital-to-home companies are extensively seen as a promising technique to cut back healthcare prices whereas assembly sufferers of their most well-liked surroundings – ​​and that promise has led to outstanding innovation and funding. Nevertheless, the promise of a house hospital has but to be totally realized as regulatory limbo has relegated this mannequin to a wait-and-see standing; the acute hospital care waiver program has been stored on life assist via a sequence of short-term extensions, making investments on this house dangerous.

Lawmakers have a possibility to move the Hospitalization Modernization Act, which might lengthen the waiver program for 5 years — however time is operating out to do this. This system is at the moment set to run out on January 30, together with different telehealth measures.

However with a protracted historical past of short-term extensions, even traditionally bipartisan assist for hospital companies will not be sufficient to offer the waiver program the eye it deserves from lawmakers to push the invoice via the end line inside the deadline.

And the trade has already witnessed the implications of the exemption uncertainty. Inbound Well being, a hospital-at-home assist platform that had raised greater than $50 million in funding {dollars}, closed in late November resulting from regulatory uncertainty.

The failure of such a well-funded operation to determine a path ahead reveals how urgently this a part of the house care market is in want of higher certainty and safety. Since that is unlikely to occur by 2026, the house hospital sector is prone to atrophy; whereas some well-capitalized gamers will stay steady, innovation will stagnate, progress will sluggish or reverse, and a future the place the house hospital fulfills its potential will likely be additional away.

Blocking vertical imaginative and prescient

In 2025, one of many greatest information objects was the completion of the long-fought deal between UnitedHealth Group (NYSE: UNH) and Amedysis. This acquisition is an instance of a long-standing development of accelerating vertical integration within the sector, however this development will change in 2026.

When President Donald Trump took workplace, there was a broad perception that the UnitedHealth deal would undergo, and that it might additional main consolidation in residence well being care throughout a interval of extra relaxed antitrust enforcement. However though the UnitedHealth deal crosses the end line, it isn’t prone to occur till 2026. The so-called payviders are underneath rising political strain and face extra public skepticism and media criticism.

A invoice proposed in September, the Affected person Over Earnings Act, would ban insurers from buying Medicare residence well being suppliers. If handed, it might forestall firms like UnitedHealth from buying well being care suppliers reimbursed via Medicare Half B or Half C.

“Semerging UnitedHealth’s insurance coverage and doctor companies is step one towards constructing one thing higher, the place each American can get the care they deserve at a value they will afford,” stated one of many invoice’s sponsors, Rep. Pat Ryan (D-N.Y.).

This is not the primary time lawmakers have centered on vertical integration. Megapayers have come underneath hearth for weaponizing their suppliers to drive up healthcare costs and skirt federal rules. This has led to requires the Division of Well being and Human Companies’ (HHS) Workplace of Inspector Normal (OIG) to guage the impression of vertical integration on prices and payers’ means to evade necessities.

As a substitute of the 12 months of speedy vertical growth which may have been anticipated underneath the Trump presidency, the house care trade can anticipate 2026 to be a 12 months of cutbacks – particularly if Democrats take energy in Congress mid-election. Vertical integration won’t cease, however it can decelerate.