Failing Faster, Better: Home Health Industry Embraces Risk, Invests To Protect Future

I spent the start of this week in Dallas attending Home Health Care News’ FUTURE Conference. It was a fantastic event and a great chance to meet our readers and understand more about how the home-based care industry functions.

While the conference was full of information, a phrase that kept coming up in conversations with home health providers was “fail faster, fail better.”

What I interpreted from that phrasing was that providers need to take risks that may sometimes fail, accept those failures, make more calculated risks, and improve their failures until there is no more failure.

In other words, providers must step outside their comfort zones and take actions that feel right. Not every attempt will succeed, but the ones that do will be worthwhile.

Another theme that emerged was investment. Home health providers must invest in people, technology and marketing—even in this tough reimbursement climate. There is a light at the end of the tunnel; organizations need to prepare for the next phase of business.

In this HHCN+ members-only update, I’ll discuss my takeaways from the home health panels at FUTURE, including:

• Providers’ responses to the 2026 proposed home health care rule
• The proposed Medicare rate is driving investment
• The gap between what works in AI and what still needs to be developed

Reimbursement challenges

The main issue in every discussion was the 2026 proposed payment rule for home health care. I felt a combination of hope and resilience as I talked with providers.

During a panel I moderated, Bryan Madden, general counsel at Bryan Skilled Home Care in Amityville, New York, said that the cut will lead to more complex negotiations with payers. He noted that when negotiations become tougher, it is more important than ever to emphasize what your organization does well.

For his organization, this means focusing on key metrics, including patient visits and maintaining patient satisfaction. He said his goal is to keep that performance steady and highlight it with payers.

Steven Gonzalez, CEO of Healthview Home Health in Cerritos, California, shared that he visited Capitol Hill the previous week and felt the discussions went “reasonably well.” However, he has begun preparing his organization for a potential decline in reimbursement.

“We’ve already started that operational efficiency piece to capture that 6%, so if there is stabilization and the rate cut freezes, that would be a plus for us,” he said. “We’re approaching it with optimism, but we also have to be prepared as operators.”

The National Alliance for Care at Home has been lobbying the administration and Congress to reconsider their methodology, according to Hillary Loeffler, vice president of policy and regulatory affairs.

“If this were to get finalized as proposed, we would have to transition to Plan B, which is hopefully to lean on our congressional champions, who just recently introduced the Home Health Stabilization Act of 2025,” Loeffler said. “Hopefully, we’ll get a Senate companion bill introduced as well that would pause the cuts for two years so that the industry can go and work on a larger, comprehensive reform to address these rate cuts permanently.”

In talking with providers, I got the impression that they believed the Centers for Medicare and Medicaid Services (CMS) would likely soften the rate cut blow in the final proposal. However, Loeffler said that even if that happens, there’s still work to do.

“I think they’ll probably back off,” she noted. “But to me, success isn’t just cutting it in half or backing off. They really need to revisit the methodology and how they’re calculating these cuts; if they don’t, we’re facing more years of 5% cuts to our rates, which is not sustainable for the home-based care industry.”

He explained that while potential rate cuts would impact his business, he feels optimistic that with efficiencies from high levels of adoption of its mobile app, Bryan Skilled Home Care will “be able to weather them and continue higher growth.”

While FUTURE focuses on innovation, I was curious to know if providers would report that now was not the time to invest significantly in overhauling their systems. I was expecting to hear from at least one provider that they might pause investment while they await final details, or that they were tightening their belts in general.

Instead, every time investments in new tech and technology came up, providers said they could not afford not to invest in tools that would improve efficiency and resilience long-term.

“When we start talking about, can we afford major innovations – we must innovate,” Phillip Ward, chief operating officer at Alivia Care, said. “We must transform. We must have an eye on the future of 2030, rather than just saying, ‘I can’t invest now in a fee-for-service world.’ If you’re trying to protect a fee-for-service world, I think the viability over the next five years is going to be very questionable.”

AI may allow providers to fight another day

It seems we couldn’t have a single conversation during the conference where someone didn’t mention artificial intelligence (AI). However, providers are discovering that some gaps need to be addressed before they fully commit.

Most providers believe that AI makes documentation more efficient, allowing caregivers to spend more time face-to-face with their patients. However, there are additional areas that warrant providers’ consideration. For example, when a home health worker meets with a new patient or cares for a patient on behalf of another worker who is unavailable, handoffs can sometimes be unclear, and communication often falls short.

I talked with providers of new AI technologies that aim to address those challenges.

Dr. David Bell, CEO of io Health and former owner and CEO of GrandCare Health Services in Pasadena, California, recently introduced a new system designed to address communication gaps. He described it as a transparent overlay that sits atop the electronic medical record (EMR), providing a comprehensive summary of the patient’s status without the need to open a different software or app.

“We can provide validation, send reminders and provide education,” he said. “At the end of the day, we can prevent errors that are either going to hurt someone, have to be fixed by a caregiver or are going to cause the agency not to be paid. You’re not switching back and forth between two things. It’s an intelligent layer that sits on top of the EMR and provides help to the clinician.”

Another former agency owner entering the technology industry is Tim Murray, CEO of Cinch Community Care Management. Murray and his wife founded Aware Senior Care in Cary, North Carolina. During his time in senior care, he discovered that scheduling and coordinating staff were challenges that led to dissatisfied patients and workforce retention issues.

To address these issues, he developed an AI platform that features a design allowing home health workers to view one another’s schedules and pick up each other’s shifts when necessary, with no back-office intervention.

While the main focus was on improving shift coverage and reducing back office tasks, an unexpected benefit was the boost in collaboration and greater satisfaction for both patients and caregivers.

“It fostered such team spirit,” Murray said. “The caregivers on shift could help each other out, and that’s amazing. It was something that the technology enabled that I didn’t realize would be such a big benefit, and they really like it. Along with that, communication is enhanced because they can read community notes to understand what is going on with the patients and have an instant snapshot of what their day looks like at the beginning of the shift.”

During a recent conversation with Chia-Lin Simmons, CEO of LogicMark, a medical alert manufacturer based in Louisville, Kentucky, she said that AI’s most significant value lies in its ability to automate administrative burdens, freeing clinical staff to focus on high-quality patient interactions that improve satisfaction scores and patient outcomes. 

“By streamlining operations while upholding strict quality standards, AI helps organizations demonstrate improved patient health, better care coordination and higher operational efficiency,” Simmons said. “These benefits lead to sustainable revenue growth under outcome-based payment models, positioning forward-thinking home health agencies to succeed as the industry shifts away from traditional fee-for-service reimbursement.”

Simmons stated that the financial impact of AI is significant and supported by reputable research. McKinsey analysis shows that AI could cut payer administrative costs by $150 million to $300 million and medical costs by $380 to $970 million per $10 billion in revenue. Operational improvements also include a confirmed 50.7% decrease in no-show rates, which directly enhances resource usage.

However, she warns about “AI fatigue,” a concept I heard discussed frequently while walking the halls of the FUTURE conference. Recent data shows that an unexpected 42% of companies have abandoned most of their AI initiatives in 2025, up from 17% in 2024.

“The primary failure modes in our sector stem from starting with technology rather than business problems, leading to solutions that don’t address core operational challenges like OASIS documentation burden, care coordination gaps or readmission prevention,” Simmons said. “Home health organizations, in particular, may struggle with the ‘innovation lab’ trap – creating AI teams that build impressive technology but fail to integrate with clinical workflows or solve real patient care issues.”

Simmons pointed to the biggest risk being “solution fatigue” caused by the flood of AI vendors promising incredible results without fully understanding the industry’s value-based care model and reimbursement constraints. She noted that clinical staff and administrative teams are experiencing burnout from failed AI proof-of-concept projects that aimed to cut documentation time but instead caused more workflow disruptions.

“Success requires starting small with specific use cases like remote patient monitoring or predictive analytics for high-risk patients, partnering with established health care AI vendors, rather than building internally, and empowering clinical managers – not just IT teams – to drive adoption based on actual patient care improvements rather than technology novelty,” she suggested.

Based on what I hear, we need more AI creators with in-depth knowledge of the home health care industry, and it seems we’re getting them.

Morgan Gonzales contributed reporting to this article.