Future-Proofing Your Home Care Agency: How to Optimize Operations Now for the 80/20 Shift

The Ensuring Access to Medicaid Services (Access Rule) has sparked growing discussion across the US home care industry – particularly around a key provision in the final rule (CMS-2442-F) known as the 80/20 rule. 

While some elements of this rule are still subject to political debate and potential revision, the message is still clear: agencies delivering Medicaid FFS and/or managed care delivery systems (including Home- and Community-Based Services) should be preparing for greater scrutiny around how they operate and how funds are spent.

This means growing pressure to run more efficiently, monitor resource allocation closely, and direct more funding toward the direct care workforce.

Whether or not the 80/20 rule is implemented in its current form, the broader shift toward transparency, accountability, and workforce investment is already underway. Agencies that begin optimizing now will be in a stronger position to adapt – and stand out as preferred partners to payers, clients, and Managed Care Organizations (MCOs).

In this article, we’ll break down what the 80/20 rule really means, how it’s likely to impact your home care agency, and what steps you can take now to optimize operations and future-proof your business.

What is the 80/20 rule, and why does it matter?

At the heart of the Medicaid Access Rule is a proposed requirement that at least 80% of Medicaid payments for specific home- and community-based services – such as personal care, homemaker, and home health aide services – must go directly toward compensation for direct care workers. This includes wages and benefits. 

The remaining 20% can be used for ‘everything else’: administrative overhead, operations, compliance, technology – and profit.

The primary intent behind this rule is to address one of the most persistent challenges in home care: workforce shortages. By ensuring a greater share of Medicaid dollars reaches frontline caregivers, the goal is to improve job quality, reduce turnover, and ultimately expand access for clients who rely on HCBS.

For many home care agencies already operating on slim margins, this change could significantly tighten the budget available for running their business. As a result, operational efficiency will no longer be just a competitive edge – it will be critical to survival.

It’s also important to consider the broader timeline of the 80/20 rule. While enforcement of the payment split may still shift depending on political or regulatory developments, data reporting requirements are already in motion. 

• By 2028, states must be ready to collect detailed financial data on agency-level Medicaid spending. 

• By 2029, states will be required to publicly report on how each agency allocates its Medicaid payments – particularly how much is going to direct care worker compensation.

In short, even if the rule’s enforcement evolves, the underlying push for data readiness, financial transparency, and cost accountability is here to stay.

What home care agencies should expect in the coming years

While much of the attention on the 80/20 rule has centered around the financial split itself, that’s just one part of a much broader regulatory shift that home care providers need to understand. 

The Centers for Medicare & Medicaid Services (CMS) has laid out a multi-year roadmap, giving both states and agencies time to prepare for new requirements around payment transparency, data reporting, and care quality.

Here’s what’s currently on the horizon:

2028: Data infrastructure must be ready

By 2028, states will need systems in place to collect detailed data from agencies about how Medicaid payments are being spent – specifically, how much is going toward direct care worker compensation versus other expenses. This doesn’t just apply to base wages; benefits such as health insurance or paid time off will also need to be tracked and reported.

This means that by 2028, agencies must be capable of electronically capturing and reporting spending data in a format that aligns with state and federal requirements. 

If your current software systems or bookkeeping practices aren’t equipped for this level of detail, now is the time to upgrade.

2029: Public reporting begins

In 2029, states will be required to begin publicly reporting each agency’s 80/20 breakdown, i.e., how much of their Medicaid reimbursement is actually being allocated to direct care workers. Even if enforcement of the rule’s spending thresholds is delayed or modified, this public transparency alone is likely to create pressure on agencies to comply or at least be able to explain variances.

This means your agency’s financial practices will become part of your public profile – impacting your reputation with clients, MCOs, and regulators alike.

Beyond the split: incident reporting and grievance tracking

The Access Rule also mandates that states implement a nationwide incident management system and a formal grievance process for HCBS services delivered through Fee-For-Service (FFS). This will place additional expectations on providers regarding tracking service quality, responding to concerns, and demonstrating compliance.

While some states may be slow to roll out these systems, it’s risky for agencies to wait. When the timeline does lock in, the window for compliance will likely be short.

Why early action is a smart strategy

Some agencies may be tempted to take a ‘wait and see’ approach, but most industry experts agree that delaying preparation is a high-risk gamble. Even without full enforcement of the 80/20 split, the movement toward data collection and transparency requirements is real and already gaining traction.

Agencies that get ahead of these changes now will be able to adapt more smoothly, advocate more effectively with MCOs, and protect their margins in an increasingly scrutinized environment.

How to start preparing your agency now for the 80/20 rule

With new requirements on the horizon – and transparency already taking center stage – agencies that take early, focused action will be far better positioned to adapt and thrive. 

Here are six ways you can get started to set your home care agency up for success:

1. Know your real costs

Before you can meet the 80/20 expectations, you need to understand precisely where your Medicaid dollars are going. That means calculating caregiver compensation as a percentage of revenue, identifying what’s counted as admin overhead, and getting clear on your actual cost per client hour. 

Pay special attention to the costs you can control – like scheduling inefficiencies, billing delays, or duplicated manual tasks.

2. Optimize business processes

This is where small efficiencies can lead to major savings. 

Start by conducting a simple workflow analysis of your most repetitive tasks – like your client intake process, scheduling, and payroll. Look for ways to simplify and standardize these processes so they’re consistent, repeatable, and require less manual effort. For example:

• A centralized CRM system can speed up client intake and onboarding, ensuring no details fall through the cracks.
• A user-friendly, dynamic scheduling system will reduce the time it takes to match best-fit caregivers with clients and minimize last-minute shift changes.
• Payroll management software can automate payments to make the process faster, more accurate, secure, and compliant. 

Even a simple switch from weekly to daily billing can boost cash flow and ease administrative strain.

3. Invest in the right technology

Once you’ve identified which processes need streamlining, the next step is making sure your tech stack and software providers can support your goals long-term. You don’t need to overhaul everything overnight, but you must start moving toward integrated, data-driven operations.

Rather than piecing together multiple siloed tools, look for platforms that bring together scheduling, Electronic Visit Verification (EVV), payroll, billing, compliance, and reporting all in one place – like Aaniie Care. This will not only save time, reduce costs, and minimize errors but also ensure you’re ready when detailed reporting requirements come into force.

4. Prioritize caregiver retention

Direct care workers are the heart of your home care agency – and under the 80/20 rule, they’re also your most valuable asset. With more funding being directed toward caregiver compensation, now is the time to double down on retention strategies that make your agency a place where top-talented caregivers want to stay.

In 2024, industry-wide caregiver turnover climbed to 79.2% – driving up recruitment and training costs, disrupting care continuity, and straining admin teams. 

Thoughtful investment in retention now can deliver significant savings for your agency and improve service quality. Consider:

• Building recognition and rewards into your culture to keep morale high and ensure caregivers feel valued.
• Using engagement tools to monitor satisfaction and catch issues early. 
• Offering professional development opportunities and career pathways.
• Providing reliable, flexible, preference-based scheduling that supports work-life balance.

With platforms like Aaniie Care, these innovative caregiver retention tools are embedded directly into your daily workflows, helping reduce churn, improve care quality, and align with the 80/20 directive.

5. Strengthen data tracking

By 2028, you’ll need to be able to track and report spending accurately. But even now, detailed tracking will help you make smarter decisions and spot problems faster to improve performance. 

At a minimum, you should be tracking and monitoring:

• Hours authorized
• Hours scheduled
• Hours worked
• Hours billed
• Hours paid

Set up weekly reporting on these figures so you can identify gaps, prevent revenue loss, and ensure your agency is operating as efficiently as possible.

6. Align with MCO priorities

Where appropriate, read the waivers your agency operates under and understand your MCOs’ goals. Most are focused on reducing hospital admissions, improving medication management, increasing caregiver stability, and improving care outcomes. 

If your agency can demonstrate how you’re contributing to those goals – backed by real data – you can begin strengthening your relationships now and look to negotiating better rates in the future.

Turn strategy into action with Aaniie’s all-in-one home care platform

Putting the right strategies in place is crucial – but executing them well is what drives results and sets successful agencies apart. 

To future-proof your operations, you need technology that not only helps you take action now but also supports growth, scalability, and compliance as industry demands evolve. That’s where Aaniie becomes your greatest ally.

Aaniie’s all-in-one home care platform is specifically designed for non-medical home care agencies looking to streamline operations, boost efficiency, elevate care quality, and stay ahead of regulatory demands – especially under the 80/20 rule.

With Aaniie Care, you can:

• Automate your workflows – like caregiver recruitment, scheduling, visit verification, and billing and claims management – to reduce admin effort and cost.
• Track key data points like hours authorized, scheduled, worked, billed, and paid.
• Simplify compliance with built-in EVV, billing, and payroll integrations.
• Improve caregiver retention through performance insights and caregiver rewards.
• Align with MCO priorities using real-time performance metrics.
• And much more…

Everything from scheduling to reporting to caregiver recognition lives in one intuitive system – saving you time, reducing errors, and ensuring you’re fully prepared when states begin collecting and reporting financial data.

If your agency is aiming to do more with less, Aaniie gives you the tools to work smarter, prove your value, and stay competitive in a more data-driven Medicaid environment.

Lay the foundation today to secure your agency’s future

While parts of the 80/20 rule remain politically uncertain, the overall direction – toward transparency, direct investment in caregivers, and operational accountability – is here to stay.

Agencies taking proactive steps now will not only be better prepared for reporting and compliance but will also improve their internal operations, reduce waste, and ultimately deliver better care.

The future of Medicaid-funded home care will reward agencies that are lean, data-driven, and caregiver-focused. With the right tools in place, your agency can be one of them.

Start preparing today to ensure your agency is ready for what lies ahead. Contact the Aaniie team to learn how we can support your agency through these changes – or request a free demo to see our platform in action.