Home health stocks under pressure following proposed rate cuts

Shares of several home health services providers are under pressure on Tuesday after the Centers for Medicare and Medicaid Services proposed a 6.4% aggregate decrease in Medicare Home Health payments. The proposed cut to home nursing payment rates was worse than Wall Street seemed to be expecting. “The proposed CY 2026 updated rates include the proposed CY 2026 Home Health payment update of 2.4%; an estimated 3.7% decrease that reflects the net impact of the proposed permanent behavior adjustment, required by statute; an estimated 4.6% decrease that reflects the net impact of the proposed temporary adjustment; and an estimated 0.5% decrease that reflects the effects of a proposed update to the FDL ratio. CMS estimates that Medicare payments to home health agencies in CY 2026 would decrease in the aggregate by 6.4%, or $1.135 billion, compared to CY 2025, based on the proposed policies,” CMS said. PRICE ACTION: Shares of Pennant Group (PNTG) are down over 7%, Enhabit (EHAB) is down almost 16%, and Brightspring Health Services (BTSG) is down about 3.5%. Also slipping lower this morning are Encompass Health (ENH), Addus Homecare (ADUS) and Amedisys (AMED).