Navigating 2025 Compliance for Home Health Agencies: What Every Provider Must Know

What is Home Health Compliance?

Home health compliance refers to following all applicable laws, regulations, and payer requirements to ensure safe, ethical, and legal delivery of care. It covers:

• Licensing and certification requirements
• Staff training and credentialing
• Accurate documentation and billing
• Labor law adherence
• Patient privacy under HIPAA

2025 Home Health Compliance Checklist – Stay Audit-Ready

1. Licensing, Certification & Agency Readiness

   To operate legally and ethically, home care providers must meet various licensing and certification requirements at the state or federal level, depending on the services offered. Whether your agency is a Home Health Agency (HHA) or provides personal care assistance, expect to be evaluated on:

   • Comprehensive care policies and procedures
   • Defined organizational structure and qualified leadership
   • Financial soundness and resource planning
   • Quality assurance and patient safety measures

2. Staff Training & Readiness

   Ensuring Quality Through Standards. A cornerstone of compliance is workforce readiness. Home health aides (HHAs) and personal care aides (PCAs) are required to complete approved training via the Home Health Aide Training Program (HHATP) or the Personal Care Aide Training Program (PCATP), followed by registration in the New York State Home Care Registry.

2025 Compliance for Home Health Agencies: Key Regulatory Changes

1. Labor Compliance and Additional Compensation Laws

   Home care aides in New York may qualify for additional pay beyond minimum wage in specific situations:

   • Overtime: 1.5x regular pay for over 40 hours/week (or 44 for live-in staff).
   • Call-In Pay: Guaranteed minimum pay if sent home early on a scheduled shift.
   • Spread of Hours: Extra pay if the workday spans more than 10 hours.
   • Uniform Maintenance: Weekly compensation if aides clean their own uniforms.

2. NYC Paid Safe and Sick Leave Law – Key Guidelines for Employers

   Under NYC's Safe and Sick Leave Law, eligible employees are entitled to take leave for personal or family illness, domestic violence, or safety-related issues. Here's how it breaks down:

   • Employers with 5+ employees or net income over $1 million must provide up to 40 hours of paid leave annually.
   • Employers with 100 or more employees must offer up to 56 hours of paid leave annually.
   • Employers with four or fewer employees and a net income under $1 million must provide up to 40 hours of unpaid leave annually.

3. CMS Medicare Proposed Rule 2026

   CMS Proposes 6.4% Payment Cut for Home Health in 2026
   The Centers for Medicare & Medicaid Services (CMS) is proposing a 6.4% overall reduction to home health payments in 2026, which includes some additional key changes like-

   • PDGM Updates
     • Refined case weights, comorbidity, and functional impairment scoring based on 2024 data.
   • More Flexibility for Face-to-Face Encounters
     • Any physician (not just the certifying one) may conduct encounters, per CARES Act alignment.
   • HHVBP Model Overhaul
     • Removing 3 existing measures
     • Adding 4 new ones, including 3 OASIS-based (e.g., self-care) and 1 Medicare spending measure
   • Stricter Enrollment & Anti-Fraud Measures
     • Retroactive enrollment revocations from the start of noncompliance
     • New revocation grounds for high-risk or noncompliant providers

4. Upcoming Regulatory Changes:

   • Ongoing Adjustments for CMS Budget Neutrality:
     CMS will revisit base rate cuts to correct overpayments accumulated from 2020–2023 (estimated $4.445)
   • Telehealth & CDPAP Updates:
     States like Massachusetts are advocating expanded telehealth access and reviving certain home health programs, with rollout potentially mirroring CMS interest
   • Labor Rule Changes:
     Proposed federal changes may affect labor protections for in-home care workers (e.g., wage/overtime requirements)

How AI and Automation Support Compliance for Home Health Agencies

As regulations evolve and expectations rise, home care agencies are turning to AI and automation not just to stay compliant, but to unlock new levels of efficiency, accuracy, and care quality. From workforce management to revenue optimization, here’s how smart technology is actively shaping the future of home care:

1. AI-Powered Timekeeping & Payroll Compliance

   AI in home care agencies remains fully aligned with complex labor regulations, especially in states like New York with detailed pay rules.

   • Smart Time Tracking: AI tools in home care can automatically log employee shifts, calculate hours worked, and identify when overtime, spread-of-hours, or call-in pay applies.
   • Dynamic Payroll Compliance: AI platforms utilize built-in logic to calculate uniform maintenance compensation, overtime rates, and shift-based bonuses, under state and federal labor codes.
   • Real-Time Alerts: Supervisors and payroll admins receive immediate notifications when payroll discrepancies or compliance risks are detected.

2. Automated Leave Management Aligned with Local Laws

   Managing employee leave — especially in compliance with laws like NYC’s Paid Safe and Sick Leave — can be complex. Automation simplifies it.

   • Accrual & Balance Tracking: Leave balances are automatically updated as hours are worked, ensuring precise tracking of earned time off.
   • Employee Self-Service: Staff can view leave balances and submit requests via mobile apps or dashboards, reducing HR bottlenecks.
   • Integration with Payroll: Approved leave is directly reflected in payroll processing, avoiding errors and ensuring transparency.

3. Intelligent Audit-Readiness & Credentialing Management

   AI and cloud technology make it easier than ever to maintain compliance documentation, training records, and licenses.

   • Centralized Cloud Storage: All certifications, licenses, and training documents are stored in secure, searchable databases.
   • Automated Flagging: AI scans and identifies missing, expired, or outdated credentials before they become compliance issues.
   • Instant Audit Reporting: At the click of a button, generate compliance documentation for surveys, CMS audits, or internal reviews.

4. AI-Enhanced Coding & Clinical Documentation Accuracy

   Clinical accuracy directly affects both the quality of care and financial performance. AI in clinician support helps reduce manual work and documentation risks.

   • Automated Code Verification: AI tools can verify ICD-10 and CPT codes against payer rules and CMS policies before submission.
   • Smart Documentation Templates: Clinicians can document care more efficiently using AI-generated prompts and templates that align with OASIS-E and other regulatory forms.
   • Seamless EMR Integration: Documentation is automatically synced with electronic medical records, ensuring clean, up-to-date patient files.

5. Revenue Cycle Automation with Built-In CMS Intelligence

   Revenue cycle management (RCM) is no longer just about billing — it’s about optimizing every step from intake to reimbursement. AI in revenue cycle management plays a key role in ensuring faster and cleaner cash flow.

   • Claims Monitoring in Real Time: Track every claim through its lifecycle, flag delays, and instantly identify rejected or pending submissions.
   • Auto-Correction & Resubmission: AI can correct common errors (such as mismatched codes or eligibility discrepancies) and automatically resubmit without human intervention.
   • CMS Policy Alignment: Stay current with HHVBP scoring, PDGM updates, and rate recalibrations. Systems adjust automatically as CMS rules change.

The Bottom Line: Compliance Without Burnout

2025–2026 will test the limits of manual systems and legacy processes. Agencies that rely solely on spreadsheets, paper records, or non-integrated tools will face higher costs, lower margins, and growing audit risks.

But agencies that adopt AI and automation will gain more than compliance—they’ll achieve:

• Faster reimbursements
• Lower administrative overhead
• Happier staff and patients
• A scalable path to long-term success