What is the Medicaid 80/20 rule for home care, and is it going away?
The 80/20 rule is in CMS’s 2024 Medicaid Access Rule. It says at least 80 percent of Medicaid payments for homemaker, home health aide and personal care services must go to direct care worker pay and benefits. It is not gone. Reports in July 2026 said CMS was sending a proposal that may change or remove it to OMB.
What it is: a federal rule finalized in 2024. For homemaker, home health aide and personal care services paid by Medicaid, at least 80 percent of the payments must go to direct care worker compensation. The rule counts wages, benefits, and the employer share of payroll taxes. Required training, travel and protective equipment are not counted. States may set hardship exceptions and different standards for small providers.
Timing: one 2026 article says the payment threshold takes effect in 2030 and that state reporting structures are due by 2028. In February 2026, CMS delayed enforcing a different piece (state grievance systems for HCBS) and the article says those delays did not change the 80 percent rule.
Status: a July 29, 2026 industry post said a CMS proposal to revise or possibly remove the 80/20 requirement was under review at the White House Office of Management and Budget (OMB) and had not been published. We found no later source to confirm what happened since then.
What this means: it is one dated federal rule, and it may change. We would not build a business plan around it either way. Watch for a Federal Register notice and your state Medicaid agency’s guidance.
Sources
- The 80/20 Rule is here: CMS finalizes HCBS care worker payment requirements · Polsinelli (law firm, secondary source)
- Medicaid 80/20 Rule 2026: Delays, 2030 Deadline and Margins (15 Sept 2026) · Soriaga CPA (secondary source)
- CMS: Significant Medicaid rules addressing access and quality (27 Feb 2026) · LeadingAge
- CMS signals potential reversal of Medicaid’s 80/20 rule (29 July 2026) · Paradigm (industry blog, secondary source)
Reviewed by Beth Bledsoe, Care Business Advisor®, 28 Oct 2026. Rules change. Confirm with your state Medicaid agency before you act.
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