The Medicare Payment Advisory Commission (MedPAC) recently released its June 2026 Report to Congress: Medicare and the Health Care Delivery System, examining a range of issues affecting the Medicare program, including the continued growth of Medicare Advantage (MA), provider payment policy, and access to hospice services. While MedPAC’s recommendations are advisory and require congressional action to be implemented, the report contains several findings with significant implications for Florida’s home health providers.

For home health agencies, two themes stand out: MedPAC’s continued support for Medicare payment reductions and its assessment of how growing Medicare Advantage enrollment is affecting post-acute care providers.

MedPAC Continues to Support Home Health Payment Reductions

The report reiterates MedPAC’s longstanding position that Medicare fee-for-service (FFS) payment systems should better align payments with provider costs and efficiency. The Commission continues to support reductions in Medicare payments for several post-acute care sectors, including home health.

This recommendation comes at a challenging time for Florida providers. Home health agencies are already facing significant financial pressure from inflation, workforce shortages, increasing regulatory requirements, and ongoing Medicare payment adjustments under the Patient-Driven Groupings Model (PDGM).

The recommendation also follows the Centers for Medicare & Medicaid Services’ (CMS) proposed Calendar Year (CY) 2026 Home Health Prospective Payment System (HHPPS) rule, which would result in a substantial reduction in Medicare home health payments nationwide. HCAF has consistently expressed concerns that continued reimbursement cuts threaten beneficiary access to care, particularly in rural and underserved communities.

Medicare Advantage Growth Remains a Major Concern

Perhaps the most relevant portion of the report for Florida providers is MedPAC’s examination of the relationship between Medicare Advantage enrollment and provider finances.

Nationally, Medicare Advantage enrollment has grown dramatically, increasing from approximately 30% of Medicare beneficiaries in 2013 to 55% in 2025, with additional growth expected in coming years.

Florida has been at the forefront of this trend and consistently ranks among the states with the highest Medicare Advantage penetration rates. As enrollment continues to shift from traditional Medicare to Medicare Advantage plans, home health agencies increasingly report challenges related to prior authorization requirements, delayed approvals, lower reimbursement rates, and administrative burden.

MedPAC also noted that home health agencies are not currently included among the provider types subject to Medicare Advantage network adequacy time and distance standards. This distinction may influence provider network composition, beneficiary access to care, and reimbursement negotiations between plans and providers.

According to MedPAC, Medicare Advantage plans can influence post-acute care spending by steering patients to lower-cost settings, negotiating lower payment rates relative to Medicare FFS, and reducing utilization.

What Providers Told MedPAC

As part of its analysis, MedPAC interviewed hospitals, post-acute care providers, and Medicare Advantage organizations.

Home health providers reported concerns that will sound familiar to many Florida agencies, including:

• Lower payment rates compared to traditional Medicare
• Delays and denials related to prior authorization
• Limited authorization periods and burdensome extension requests
• Increased administrative costs associated with utilization management
• Challenges securing timely approval for medically necessary services

Medicare Advantage plans, meanwhile, argued that utilization management tools help prevent unnecessary services and noted that some plans have reduced or eliminated prior authorization requirements for certain home health services. Plans also reported that reimbursement rates are comparable to Medicare FFS per-visit rates and cited provider workforce shortages and limited post-acute care capacity as barriers to timely patient placement.

MedPAC’s Findings Differ from Provider Experience

Despite widespread provider concerns, MedPAC concluded that it found no statistically significant association between increased Medicare Advantage penetration and home health agency profit margins on average. The Commission did identify small declines in home health revenues, costs, and utilization associated with increased Medicare Advantage enrollment but found no measurable impact on overall margins.

Specifically, MedPAC estimated that a 10-percentage-point increase in Medicare Advantage market penetration was associated with:

• A 2.7% decline in home health revenues
• A 2.7% decline in home health costs
• A reduction of approximately 1.8 home health visits
• A small, statistically insignificant change in overall margins

The Commission cautioned that its findings represent statistical associations rather than direct cause-and-effect relationships and acknowledged that individual providers may experience Medicare Advantage growth differently.

Many providers are likely to view these conclusions skeptically. While margins may appear stable in aggregate data, agencies often achieve that stability only through significant operational adjustments, including workforce reductions, administrative efficiencies, service-line changes, and increased reliance on non-Medicare revenue sources.

Additionally, many providers question whether margin data alone adequately reflects financial health. CMS’s Office of the Actuary has projected that approximately 40% of home health providers could operate at negative total margins by 2027, increasing to 52% by 2040. Critics argue that Medicare Advantage pressures, combined with ongoing Medicare payment reductions, create financial challenges that may not be fully captured through broad market-level analyses.

Hospital Discharge Delays Raise Additional Questions

One particularly notable finding involved hospital lengths of stay.

MedPAC found that Medicare Advantage beneficiaries experienced hospital stays that were 11.2% longer than comparable fee-for-service beneficiaries after adjusting for patient characteristics. The difference was even more pronounced among patients being discharged to post-acute care settings.

For patients referred to home health, Medicare Advantage beneficiaries experienced hospital stays that were 8.4% longer than traditional Medicare patients. The difference was even greater for patients discharged to skilled nursing facilities (19.6%) and inpatient rehabilitation facilities (32.3%).

The report suggests that prior authorization and other utilization management requirements may contribute to delays in discharge and transitions to post-acute care. These findings reinforce concerns frequently raised by providers regarding the administrative barriers associated with Medicare Advantage authorization processes.

Hospice Findings May Influence Future Policy Discussions

Although the report’s hospice chapter is less directly relevant to most home health agencies, it highlights broader concerns about access to care and the adequacy of Medicare payment systems.

MedPAC examined whether hospice payment policies may discourage providers from serving patients who require costly palliative treatments such as dialysis, blood transfusions, radiation therapy, or chemotherapy. The Commission outlined several potential policy approaches, including hospice outlier payments, add-on payments, and demonstration programs allowing limited concurrent care. However, no formal recommendation was adopted.

What Florida Providers Should Watch

The June 2026 MedPAC report reinforces several issues already affecting Florida’s home health sector:

• Continued federal pressure to reduce Medicare home health spending
• Ongoing growth in Medicare Advantage enrollment
• Increasing reliance on prior authorization and utilization management tools
• Concerns regarding authorization-related discharge delays
• The absence of Medicare Advantage network adequacy standards for home health agencies
• The need for policymakers to balance cost containment with beneficiary access to care

While MedPAC found no statistically significant relationship between Medicare Advantage penetration and overall HHA margins, many providers continue to report lower reimbursement rates, delayed authorizations, shortened episodes of care, reduced utilization, and growing administrative burden.

For Florida providers, the report underscores the importance of continued advocacy around Medicare payment adequacy, Medicare Advantage reform, network adequacy requirements, and timely access to home-based care.

As Medicare Advantage enrollment continues to grow and CMS proposes additional home health payment reductions, ensuring that home health agencies have the resources necessary to serve Florida’s aging population will remain a critical policy challenge in both Tallahassee and Washington, D.C.