HCBS Providers Describe Squeeze From Cuts, Rules, Staffing Gaps
In a Home Health Care News feature, industry executives and researchers describe a worsening operating environment for home- and community-based services (HCBS) providers heading into 2026. They cite CMS's 80/20 wage pass-through rule, federal Medicaid funding cuts from the One Big Beautiful Bill Act, a July Department of Justice shift away from enforcing Olmstead-based community-care requirements, and immigration enforcement reducing the caregiver labor pool as compounding pressures. Providers interviewed, including leaders of Home Assist Health and Flournoy Health Systems, say workforce shortages and shrinking client authorization hours are forcing difficult tradeoffs between care quality and caregiver retention. About 8.4 million people rely on Medicaid HCBS, which accounts for more than half of the $286.5 billion spent nationally on such services in 2024.