An executive order designed to root out anticompetitive regulations could raise discussions about the 80/20 rule requiring that 80% of Medicaid dollars on some home-based care services be spent on worker compensation.

Leaders from the Federal Trade Commission (FTC) and the U.S. Department of Justice (DOJ) Antitrust Division published a letter last week asking all federal agencies to identify anticompetitive regulations, including health care regulations.

“Federal regulations in the health care sector, especially those promulgated under the Affordable Care Act, may have the effect of pushing low-cost insurance plans out of the market and inducing vertical consolidation that raises prices, while burdensome pharmaceutical regulations may delay the introduction of new, more affordable medicines,” the letter read. 

It is possible that the rule could bring up discussions regarding the 80/20 rule, according to Adam Herbst, partner at Sheppard Mullin law firm, particularly if antitrust enforcers examine state Medicaid policies that could limit provider flexibility or inhibit the evolution of care models.

The rule requires states to ensure a minimum of 80% of Medicaid payments for homemaker, home health aide and personal care services go to direct care worker compensation, and not for administrative overhead or profit.

“The 80/20 rule in New York, for example, is a well-intentioned workforce allocation mandate, designed to ensure Medicaid dollars flow directly to aides,” Herbst told Home Health Care News. ”But it also creates challenges for providers navigating slim margins, workforce shortages, and the need to invest in supervision, technology and integrated care delivery. While I would defer to my antitrust colleagues, the rule does not appear to be anti-competitive in the traditional sense. However, it could still surface in broader discussions about structural constraints on innovation or scale within the safety-net system.” 

The rule could arise in discussions not because it encourages monopolies, Herbst said, but because it reflects “increasing friction between mandated spending requirements and financial sustainability.”

The 80/20 rule has caused concern for some home-based care providers. Some adjusted their business models because of the rule.

If the rule is repealed, it would offer providers some “breathing room,” Herbst said, especially for those operating in states with low reimbursement rates and who care for complex populations.

“It would give agencies flexibility to rebalance spending toward supervision, staff retention, compliance, or partnerships with health systems,” Herbst said.

However, such a change is unlikely to go smoothly due to concerns about worker underpayment and the lack of transparency in how providers allocate state dollars.

“If the rule went away, I’d expect a strong push from labor and equity advocates for replacement mechanisms – maybe wage pass-throughs, minimum rate floors, or enhanced reporting—to ensure public funds still support the workforce,” Herbst said. “From my seat, the question isn’t whether 80/20 stays or goes – but rather how states and CMS can incentivize both worker compensation and provider adaptability without locking the system into one rigid model. That’s the conversation we need to be having – especially as home care becomes central to how we deliver care to aging and disabled populations.”

The letter directed heads of all federal agencies to provide a list of anti-competitive regulations by June 18, along with recommendations on whether to modify or rescind each regulation.