The government shutdown has delayed the usual release of the 2026 Medicare home health final rule, leaving providers in limbo. As they await clarity, many are already strategizing for the worst.

If the final rule mirrors the proposed version – which includes an effective 9% cut to reimbursement rates – home health providers warn it would push the industry into a state of “absolute urgency.”

Some providers anticipate a greater impact from the proposed rule than others. For Empath Health CEO Jonathan Fleece, no response is off the table.

“If the rule truly does move forward with this 9% cut, there’s a possibility that we will be one of those agencies that just decides to go in a different direction and really pull back altogether on home-based care,” Fleece told Home Health Care News. “It already, for us, runs at an operating loss. … That’s one of the options on the table, is we would potentially be one of those agencies that would just close.”

Clearwater, Florida-based Empath Health is a not-for-profit health network offering hospice, home health care, palliative care, Program of All-Inclusive Care for the Elderly (PACE) and adult day care, among other services. It is also the parent company of 17 affiliates and two philanthropic foundations. The provider serves more than 81,000 people annually.

While preparing for worst-case scenarios, Fleece expressed measured optimism about the final rule.

“I really can’t think of what more we could have done as an industry to advocate, educate and hopefully inspire our policymakers and congressional leaders how important home-based care is for the country,” he said. “So if this rule does go forward … it will be absolute urgency. But I’m cautiously optimistic.”

Indeed, the proposed home health rule received over 952,000 public comments from home health stakeholders and other implicated industries. 

Absorbing the cut

Some providers say they will weather the potential storm of a drastic rate cut relatively unchanged.

The Pennant Group (Nasdaq: PTNG) has done everything it can to advocate on what it sees as the right path for patients, Dr. Derrel Walker, chief medical officer, told HHCN. With the arrival of the proposed rule, Pennant expanded its existing advocacy efforts to include a grassroots strategy. 

As it has petitioned against the rate cuts included in the proposed rule, Pennant’s leaders have reiterated that they do not expect much fallout if CMS implements the 9% cut. Despite that, the company has still taken steps to prepare for a dramatic Medicare rate cut. 

“Internally, we’ve just been preparing, working with all of our agencies, working through the potential issues, what it would look like if the cuts are final, all of those things,” Walker said. “So yeah, right now we’re shuffling. And then on top of that, we’re continuing to grow. That’s exciting as well. We are confident we’ll weather this, just like everything else. We will adjust and adapt. Our model is built that way, but still, the overall feel is that it’s not the right direction.”

Pennant is a holding company of home health and hospice agencies and senior living communities in 17 states. Its footprint has recently expanded through several transactions, including the acquisition of home health and hospice agencies divested as part of UnitedHealth Group’s (NYSE: UNH) acquisition of Amedisys.

In Walker’s view, the recently released final physician fee schedule included a focus on preventative medicine and suggested that CMS may be headed in a positive direction.

Nevertheless, Pennant is “strapped in” and ready for a rate cut that would not be comfortable, Walker said.

HealthView Home Healthcare Services has already restructured its operations to absorb the cuts included in the proposed rule, HealthView CEO Steven Gonzalez told HHCN. If the final rule does not include a drastic rate cut, Gonzalez said he will still be pleased that the company made efficiency-enhancing adjustments.

Cerritos, California-based HealthView provides private duty nursing, skilled nursing, respite care, personal care and companionship, among other services. 

Still, Gonzalez said that revising strategies has become increasingly difficult for home health providers.

“It’s hard to adjust your strategy, because you’re always in surprise mode for certain things,” Gonzalez said. “Probably the last two years [have been] the most difficult just because of the fluidity of changes.”

Advocacy shift

Industry advocates are also preparing their approach to a scenario with a drastic cut to home health reimbursement rates.

Dr. Steven Landers, the CEO of the National Alliance for Care at Home (the Alliance), said the organization is already in a “war room situation.” The organization is looking to Congress for support if the final rule resembles the proposed rule, Landers told HHCN’s sister publication, Hospice News. 

“We’ve worked hard with two leaders in the House Ways and Means Committee, Kevin Hern and Terri Sewell, and they’ve introduced bipartisan legislation, the Home Health Stabilization Act of 2025,” Landers said. “That law, essentially, is a contingency plan. So if CMS doesn’t get this right, that is an opportunity to stop the cuts for two years, to try to work on these methodologies.”

If CMS recognizes that its proposed rule is “misguided” and revises its methodological approach, the contingency plan will not be needed.

“But we’re very much not going to just sit on our hands and assume they’re going to get it right,” he said.