From Policy to Practice: How Home Care Agencies Must Adapt in 2025

ina230
Jul 28
2 min read

As home care becomes an increasingly critical part of U.S. healthcare, agencies face new regulatory demands, staffing challenges, and technology expectations in 2025. Navigating these changes effectively will be essential for delivering quality care, staying compliant, and sustaining growth.

1. Industry Growth & Demographic Drivers

The U.S. home care market exceeded $107 billion in 2025,and is projected to grow at a 7.4% CAGR through 2032, driven by an aging population and rising preference for aging in place.
With 17.5% of Americans aged 65 or older,and nearly 90% of seniors preferring to age at home, demand is surging.

2. Workforce Strain & Policy Pressures

Over 59% of agencies report ongoing caregiver shortages despite anticipated job growth exceeding 21% by 2033.
Immigrant workers comprise a high share of home care staff; stricter immigration policies threaten further staffing instability and exacerbate service gaps.
Proposed changes by the Department of Labor—including rolling back minimum wage and overtime protections for home health aides—could lower labor costs but risk worsening retention and care quality.

3. Regulatory Updates & CMS Reforms

CY 2025 Home Health PPS Final Rule brings a 0.5% net increase in Medicare payment rates (~$85 million net) after offsets. Agencies must comply with new Conditions of Participation and prepare for updated payment models under PDGM and HHVBP.
Quality reporting changes: CMS launched its July 2025 refresh of the Home Health Quality Reporting Program (HH QRP), adding updated OASIS Q&As and Discharge Function Score metrics. These updates affect public star‑rating displays and must be incorporated into agency systems by October 2025.

4. EVV & Medicaid Compliance Enhancements

Enhanced Electronic Visit Verification (EVV) enforcement is a major 2025 focus—with new audit scrutiny coming from HHS‑OIG. Agencies must ensure systems meet evolving compliance standards in every EVV-implementing state.
Medicaid reforms are rolling out, including enforcement of an 80/20 compensation allocation rule, stricter eligibility redetermination cycles, and transparency mandates. Agencies should use care management platforms to capture required documentation and prevent revenue leakage.

5. Tech Integration & AI Adoption

AI tools are increasingly adopted: automation of administrative tasks (like documentation and scheduling) can alleviate nurse workload by up to 30%, improve retention, and streamline operations.
Telehealth and hospital-at-home initiatives now support faster recovery and reduce readmissions. Over 350 hospitals have adopted hospital-at-home models, indicating broader systemic acceptance of remote care paradigms.

What Agencies Should Do Next

Strategy	Why It Matters
Upgrade your EVV and documentation systems	Stay audit-ready and compliant—with fewer denied claims or retrospectives
Use OASIS-preview and star-ratings tools	Adjust quality processes proactively ahead of metrics being published
Leverage AI‑enabled scheduling and note-taking	Reduce admin burden and retain clinical staff
Build flexibility into workforce plans	Address policy risk and reduce reliance on vulnerable staffing pools
Align with telehealth & transitional care pathways	Boost outcomes and client satisfaction

In 2025, home care agencies are asked to deliver more—with fewer resources and tighter compliance. Though the changes are complex, they also offer opportunity. Agencies that lean into quality reporting, use smart tools, and build resilient staffing models will not only survive—they’ll define the future of care at home in America. #curcall