Top Home Health Trends For 2025

The year ahead will be a fascinating one in home health care. As 2025 dawns, the industry faces many uncertainties, and the next 12 months will be pivotal in shaping the future.

Regulatory decisions will have an outsized impact on home health providers in the near-term, and their effects could stretch well into the future. Lower interest rates will bring more dealmaking to what is still a highly fragmented industry, but question marks hover over the extent to which the federal government will enforce limits on consolidation.

In this week’s exclusive, members-only HHCN+ Update, I share the top trends that the Home Health Care News team has identified for the year to come.

Curious what we forecasted for last year? Revisit our 2024 predictions here.

‘Trump effect’ will alter payment policy

Trump and his incoming cabinet will have a major effect on home health care across many public policy domains–but providers are especially attuned to the “Trump effect” on payments.

For one, home health providers may actually see a rosier Medicare fee-for-service payment environment than they have over the last four years. Under President Joe Biden, the Centers for Medicare & Medicaid Services (CMS) has cut core home health payments for three consecutive years. Providers and advocates alike have argued that those cuts have destabilized the industry.

No presidential term is entirely predictable, but there is a template for what a Trump administration may look like, given his first term from 2017 to 2021. During that time period, providers saw relatively normal and upward adjustments to home health payment.

But under a Trump presidency, Medicare Advantage (MA) organizations will be emboldened. Trump is generally in favor of the privatization of Medicare, and his pick to lead CMS – Dr. Mehmet Oz – is demonstrably in favor of that. Oz is also a UnitedHealth Group (NYSE: UNH) shareholder, and UnitedHealthcare is the largest MA administrator.

Emboldened MA plans spell trouble for home health providers. Firmer standing means these plans can expand, which will increase MA penetration. Over 50% of Medicare beneficiaries are already under an MA plan, and those plans largely pay far less for home health services compared to traditional Medicare.

The Republican White House will also be harsher on expensive government programs, but it’s still unclear what programs will draw the ire of the president and his cabinet members. However, Medicaid could be vulnerable to cuts.

“While Medicaid did not receive a lot of attention directly during the campaign, if Social Security and Medicare cuts are largely off the table, Medicaid spending reductions are left as a likely source of funding to help pay for tax cuts,” wrote Robin Rudowitz, vice president at KFF and director of the Program on Medicaid and the Uninsured.

Possible Medicaid policies include converting federal contributions to block grants or capping federal contributions on a per-capita basis, Rudowitz noted.

Of course, potential Medicaid cuts could also be watered down or abandoned in the face of public opposition. And any federal policy changes will have different results across various states, given the state-level control of the program. Furthermore, the trend has been in favor of increasing Medicaid funding for home- and community-based services versus more expensive institutional care, so it’s possible that cuts would hit nursing homes harder than home-based care providers.

Ultimately, providers will – as usual – be fighting to protect their reimbursements, as MA expansion and Medicaid cuts could erode the positive effects if the Trump administration does indeed reverse the Biden cuts to traditional Medicare.

Home health providers will deal with fallout of a ‘Great Reversal’

Polarization has taken hold of contemporary American politics, which will have an effect on home health.

Trump, in his first stint as president, spent much time undoing Obama-era policy. When Biden was elected, he spent much of his time reversing Trump-era policy.

Expect more of the same.

While the president is not omnipotent, expect to see executive actions to reverse policies the Biden administration enacted. For instance, in home care, the Medicaid Access Rule – and the 80-20 provision – is likely to be done away with.

Another policy to keep an eye on: the federal nursing home staffing mandate. This Biden administration policy has drawn fierce pushback not just from nursing homes but from providers across the continuum of care, as staffing minimums in nursing homes would have an effect on the entire labor force. But signs point to the Trump administration quashing the staffing mandate.

A “great reversal” also could mean that one of the largest home health deals in recent memory goes through. Biden’s Department of Justice (DOJ) is suing to block UnitedHealth Group’s $3.3 billion takeover of Amedisys.

Historically, new administrations have not meddled with previous administrations antitrust lawsuits. But that could be changing, as health care leaders have expressed their expectations that the Trump White House will take a different approach to antitrust enforcement, with the Federal Trade Commission generally being friendlier to business interests.

A Trump reversal could also result in less intense scrutiny on private equity ownership of health care provider organizations compared to the last four years.

While these policy reversals described above are largely favorable to home health providers, they also need to take into account the pattern of policy reversals as they plan for the future; a resilient organization must be nimble enough to adjust to the big swings in regulation that now seem baked into every election cycle.

UnitedHealth Group-Amedisys deal will change the industry forever

If reversing policies of the last administration is the Trump modus operandi over the next four years, the lawsuit against the UnitedHealth Group-Amedisys deal will go through.

But whether the deal is completed or not, the result will change the future of home health care.

If completed, a true home health giant will exist for the first time under UnitedHealth Group’s Optum. The company will own close to 10% of the home health market and a far larger footprint than any of its peers – at least for the time being.

If the deal is completed, vertical integration within payer organizations will continue. Humana Inc. (NYSE: HUM) has CenterWell Home Health, but may consider scooping up another large provider like Enhabit Inc. (NYSE: EHAB), with the road cleared of DOJ concerns.

The largest providers becoming larger will create a clear delineation between providers. The behemoths will have the ability to strike major deals with MA plans – including ones that operate under their own parent companies – and the rest of the sector will struggle to keep up, specifically within the markets where the giants loom largest.

If the deal doesn’t go through, and the Trump DOJ sticks with the lawsuit, the landscape will be equally changed. For the foreseeable future, other outsider health care organizations will abstain from large-scale home health acquisitions, knowing that building out a sizable network won’t be easy through consolidation.

A fragmented industry will remain fragmented for the foreseeable future, for better or worse.

Providers will continue to walk away from MA plans

Whether or not the MA plans are bolstered, and whether or not Medicare fee-for-service reimbursement improves, home health providers will continue to walk away from MA plans in 2025.

Recently, providers have been emboldened to finally tell managed care plans “no.” Providers saying no will beget other providers saying no in the future.

Though Enhabit Inc. (NYSE: EHAB) eventually struck a deal with UnitedHealthcare, when Enhabit initially terminated its contract with the largest MA administrator in mid-2024, smaller providers were encouraged by the move.

“It’s important to remember that the reason we created our payer innovation strategy, about two years ago, was because at that time we had United as a large payer and then a few regional smaller contracts that had come along with acquisitions over the years,” Enhabit CEO Barb Jacobsmeyer said at the time. “Those combined contracts had us at about a 40% discount to Medicare. Obviously, that’s not sustainable. We started the payer innovation strategy to have more and better contracts.”

At HHCN’s FUTURE conference, home health providers reacted positively to that news, both publicly and privately.

“I would just say that my heart was warm the other day when Enhabit walked away from the table with UHC,” Pinnacle Home Care CEO Shane Donaldson said. “I think that we’ll look back on that as being a significant event.”

While UnitedHealthcare and Enhabit have made up, that doesn’t mean Medicare Advantage plans and home health providers at large have.

As providers see their margins shrink, they’ll have to make the unfortunate decision to see fewer MA patients in order to survive.

AI goes from experimental to essential

Home health providers will begin to adopt AI solutions on a wider scale in 2025. In the last couple of years, larger providers with more resources began to deploy some of those solutions. But even then, most were doing so in an experimental fashion.

In the year ahead, that’s likely to change. Those large providers will have AI implemented across operations, in various use cases. But mid- and smaller-sized providers will also find ways to use AI to become more efficient.

About 58% of providers have already invested in AI or plan to do so within the next year, according to a recent survey conducted by HHCN and Forcura. About 31% of survey respondents said they would take a “wait-and-see” approach.

While the home health industry has not been known historically to be on the cutting edge of technology adoption, payment pressure has thrust them into action.

For the most part, providers see AI helping in two areas: documentation and scheduling. Within those two areas are opportunities to enhance job quality for nurses. In turn, providers could feasibly save by reducing turnover costs.

“At the moment, we need to go from surviving to thriving,” Pinnacle Home Care CEO Shane Donaldson told HHCN earlier this year. “With new technologies, we can thrive.”

In fact, Donaldson believes that AI will be such an operational boost that margins will end up being too high again, at least in the eyes of CMS.

“I actually think that in the interim, our margins will increase significantly, for those that are bold enough to be on the forefront of that,” Donaldson said.

Home-based care takes ‘center stage’ with health systems

The hospital-at-home model is likely to continue expanding in 2025. While the hospital-at-home and SNF-at-home models were all the rage in 2020 and 2021, popularity dwindled a bit as COVID-19 did.

But some health systems never stopped investing in hospital-at-home, including some of the largest health systems in the country.

Health systems see these programs as a way to continue expanding capacity without making capital commitments to more brick-and-mortar facilities.

“With our home-based services, it’s about how we take this patient out of the hallway, rather than out of the hospital,” Danny Metzger-Traber, the VP of strategic business operations at Mass General Brigham Healthcare at Home, recently said at the CONTINUUM conference. “Because that’s the reality that we are in across our hospitals, there’s a capacity crisis.”

Denise Keefe – the senior vice president of continuing health at Advocate Health – said that Advocate Health is more committed to home-based care efforts than ever.

Advocate Health, like MGB, is one of the larger health systems in the country.

“I think care in the home right now is center stage,” Keefe said at the CONTINUUM conference. “And we’re thinking about our opportunity to really make that work for the health system, in different ways than in the past.”

And with some of the largest health systems making such ambitious commitments to home-based care, there will inevitably be more opportunities for legacy home health and home care providers to get involved.

As care moves home, and as payment becomes more risk-based, providers will have the opportunity to step in and make a difference in places they haven’t had an invitation to in the past.

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