Inside Home-Based Care Provider Strategies For Surviving Under The Looming 80-20 Rule

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After the release of the proposed “80-20 rule” last year for home- and community-based services (HCBS), providers had plenty of time to digest. Now, they’re formulating their plans of action ahead of the proposal’s potential finalization.

Broadly, the U.S. Centers for Medicare & Medicaid Services’ (CMS) proposed rule had several components, but the most controversial would result in roughly 80% of Medicaid payments for HCBS being put aside for payment for direct care workers.

The proposal has since received an unfavorable reception from many industry stakeholders, with the final rule expected sometime this Spring.


One of the most common objections is the belief that the rule would wreak havoc on smaller companies providing care. Many also believe that the rule doesn’t account for the different operating dynamics across all 50 states, nor does it account for other workforce investments like training.

Sara Wilson, president and CEO of Home Assist Health, believes that the proposal – if finalized – could impede care.

“I’m of the position that it was moving forward too fast, without research, or a state-by-state cost analysis,” she told Home Health Care News. “It compromises our network integrity for care at home. It makes me nervous, because it could affect our ability to care for the people who we are here to serve.”


Home Assist Health is a Phoenix-based home-based care provider that provides a variety of care services, such as personal care, housekeeping and respite care.

Care Advantage CEO Tim Hanold thinks that CMS has good intentions, but disagrees with the federal agency’s approach to what he considers a shared goal.

“Access to care is a shared goal, and so is increasing compensation for our caregivers,” he told HHCN. “I think we’re all aligned around that. The CMS rule started with good intentions, but certainly there’s going to be some unintended consequences if it comes out as written. Rate adequacy really continues to be the main driver for providing appropriate wages, and that is what I believe the administration should focus on to improve access to care.”

Richmond, Virginia-based Care Advantage is a home-based care company that has more than 45 locations throughout Virginia, Maryland, Delaware, Washington, D.C., and North Carolina. The company offers both personal care and home health care services.

Despite the largely negative response to the 80-20 proposed rule, there are some components of the rule that haven’t received any pushback.

“There are components of the 80-20 rule that we’re in agreement with — the timeliness of access, HCBS quality measures and the standardization of wait list reporting requirements,” Hanold said. “Those are all things that are necessary to keep the entire ecosystem responsible for delivering high-quality and timely care to the Medicaid population.”

While Hanold believes the rule will be finalized, he is less sure about what the final rule will look like.

“It’s not clear to me yet if it will be finalized as originally written, or how many variations of it will come across,” he said. “There are a number of components that will probably be pure play and work all the way through. Then there are others, like the 80-20 threshold, that created quite a bit of response from numerous states and from numerous organizations.”

Planning for the rule

Though providers are unsure of what the finalized rule will look like, this hasn’t stopped companies from being proactive. Many leaders have come up with a plan for the proposal, in its current form, being finalized.

At Home Assist Health, the plan is to work closely with the company’s state Medicaid management authority and lean into partnership strategies.

“We are staying close with our peers, and our Medicaid management authority to monitor progress, possible discussions on when the time comes on operationalizing it, so that we can adapt accordingly to preserve this very important vital service for those who rely on it,” Wilson said.

As a non-profit organization, Home Assist Health is also positioned to pursue grants and fundraising. Though Wilson notes that this is currently much more difficult than it has been in the past.

Additionally, the company plans to work closely with its state home-based care trade associations.

For Care Advantage, the plan is to be cognizant of how the company serves its different markets.

“It’s about resource allocation,” Hanold said. “We have to be smart about how we think about all of the regions and areas that we serve. We have to ensure that it still makes economic sense. In other words — no margin, no mission.”

In general, the company has spent a lot of time modeling out different scenarios when it comes to the 80-20 rule.

Hanold believes that there are three things here that will hold true for all businesses in the space.

“The first one is that you need to build volume and scale, possibly in a material way,” he said. “You have to think large, you have to think at scale for a business in a 80-20 world to really work. The second point is consistent healthy rate reimbursement. It’s critical that we’re voicing the case for rate adequacy. Our joint advocacy now is more important than ever. The third point is that you need to be really selective on how to deploy resources.”

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