Health Systems Reduced Home-Based Care Services in 2026
As Medicare payments decreased, many health systems cut home health divisions while scaling hospital-at-home models.
Updated on Sept. 18, 2026 in Healthcare
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Throughout 2026, multiple U.S. health systems shuttered home health and hospice service lines due to shifting operating environments and federal payment cuts. The industry simultaneously pivoted resources to prioritize hospital-at-home programs amid broader workforce and revenue adjustments.
Why it matters
Operators must navigate a 1.3% reduction in CMS Medicare payments for home health agencies, which hit $220 million nationally in 2026. This regulatory pressure forced many systems to reallocate resources toward higher-acuity hospital-at-home care models to maintain financial stability.
CMS-mandated Medicare payment decreases for home health agencies totaled $220 million, a 1.3% reduction, contributing to workforce cuts like the 214 positions eliminated at Health First and 144 roles reduced at University of Vermont Health.
The players
Health First
A health system based in Rockledge, Florida, that terminated its hospital-at-home program and reduced staff by 2%.
University of Vermont Health
A major health network in Burlington, Vermont, facing a projected $300 million revenue reduction over the coming years.
Stanford Health Care
A Palo Alto-based academic medical center that treated 1,000 patients through its transitional hospital-at-home care model.
The details
Health systems identified specific service lines for closure, citing regulatory burdens and the need to strategically preserve capital. Workforce reductions across administrative and clinical departments accompanied these service changes as systems sought to align capacity with new revenue realities. Conversely, hospital-at-home programs saw significant activity, such as Stanford Health Care reaching 1,000 patient enrollments in its model by May.
Timeline
January 2026: Saint Francis Health System launched a hospital-at-home program.
February 2026: Trinity Health suspended home health and hospice services.
March 2026: Cleveland Clinic expanded its hospital-at-home offerings.
May 2026: Stanford Health Care recorded 1,000 enrollments in its transitional care model.
September 1, 2026: Altru Health System discontinued home health services.
Market Landscape
The industry is shifting resources to comply with the extension of the CMS Acute Hospital Care at Home waivers through 2030. This transition marks a move away from traditional home health services toward higher-intensity, acute care models that qualify for federal hospital-at-home incentives.
Operators should review their reimbursement mix and service line profitability, as CMS payment adjustments have now triggered widespread divestment from traditional home health. Assess whether your current service model aligns with the long-term federal commitment to hospital-at-home programs.
The takeaway
The sector is consolidating its home-care strategy by cutting underperforming services to preserve margins amidst declining Medicare payments. Monitor federal waiver policies and your internal service-line revenue data to determine if your current home-care capacity is financially sustainable.
Further reading
For broader trends in medical service delivery and regulatory shifts, see the Healthcare section.
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