Home health companies push for VBC contracts

In November, CMS issued the 2026 Home Health Prospective Payment System final rule, which went into effect Jan. 1. Under the rule, home health agencies will see their 2026 Medicare payments decrease by an estimated 1.3%, or $220 million, compared to 2025.

To help offset this payment decrease, several home health operators are pushing health systems and accountable care organizations (ACOs) for VBC contracts. According to home health providers, VBC contracts can provide enhanced reimbursements for post-acute access and improve patient outcomes.

For example, Compassus has some contracts that pay a 5% to 10% rate enhancement if it meets specific performance objectives. Currently, the company has approximately 20 VBC contracts with health systems, ACOs, and health insurers across 33 states. Expanding the number of these agreements is a top priority.

Susan Chapman Moss, SVP and managing director of payer strategy and government affairs at Bayada Home Health Care, said the company is emphasizing the benefits of patient access as it works to significantly expand its VBC partnerships this year.

"Our strategic partnerships prove that timely access and clinical reliability can simultaneously protect patients and lower total cost of care," Moss said.

In some cases, VBC contracts don't provide enhanced reimbursements to home health providers, but they can help ensure that the companies have a steady stream of patients.

"The preferred providers that we work with are more engaged," said Danielle Whitacre, CMO at Bloom Healthcare, which currently has VBC arrangements with around five home health providers. "They come to the table wanting to improve their communication with us, prove their performance metrics and prove their worth in these arrangements."

Jordan Holland, SVP of VBC at Compassus, also highlighted the difficulty of getting payers and providers onboard with VBC contracts.

"The difficulty is how the organization views the importance of home-based care," Holland said. "There are a lot of stakeholders in people's healthcare. How do you attribute the value to any one stakeholder and who gets what percentage of the pie? That is one of the challenges to expanding this to becoming a much larger portion of our reimbursement."

"In a time when financial pressures are mounting — especially for home health agencies where additional Medicare rate cuts are coming — value-based partnerships offer a sustainable path forward," she added. "They're not just about dollars; they're about shared accountability, improved communication, and measurable results. When providers and payers come to the table with a commitment to collaboration, everyone wins — patients receive better care, organizations achieve stronger outcomes, and the system becomes more resilient."

"The future of healthcare depends on these kinds of partnerships that reward quality and foster trust across the continuum of care," Skaggs said.

*Advisory Board is a subsidiary of Optum. All Advisory Board research, expert perspectives, and recommendations remain independent.