Rethinking hospital-at-home policy to achieve scale and impact

Evidence for the benefits of hospital-at-home – including lower readmissions, iatrogenic complications, and spending – has accumulated over three decades.² Amid the Covid-19 epidemic, the Centers for Medicare and Medicaid Services (CMS) issued the Acute Hospital Care at Home (AHCaH) waiver, allowing hospitals to claim equal reimbursement for Medicare beneficiaries admitted to hospital-at-home as traditional inpatient care. This policy unleashed an initial surge of interest, with over 400 hospitals obtaining the waiver.³

In October 2025, hospital-at-home programs around the country suspended operations due to federal government shutdown, which allowed the AHCaH waiver to lapse.¹ The House of Representatives has since passed legislation (H.R. 4313) to extend the waiver for five years, but as of early 2026, the Senate's decision is still pending. This uncertain moment offers an opportunity to reconsider hospital-at-home policies to encourage further growth and innovation.

The Covid-19 public health emergency that originally led to the AHCaH waiver has faded. Now, hospitals seek to build or grow hospital-at-home programs as a strategy to improve quality, capacity, and patient experience, particularly for overcrowded hospitals and emergency departments. In addition to extending the current waiver, policymakers should consider new approaches that better support efforts to scale hospital-at-home programs within and across institutions, and advance beyond the traditional paradigm of brick-and-mortar hospital care.

Scaling hospital-at-home through investment, not just reimbursement

Prior to expiration of the waiver, new applications from hospitals had slowed.⁴ In addition, most hospital-at-home programs remain small, with only a few hospitals accounting for the majority of admissions. In fact, two-thirds of waivered hospitals have not enrolled any patients.⁵

Given the widespread appeal of hospital-at-home, it may be surprising that these programs have not gained more traction. Several barriers play a role, most notably uncertainty over long-term extension of the waiver, as well as variable state regulations and cultural barriers within institutions.⁵ In our experience, however, the most challenging barrier has been the high upfront cost and complexity of building a hospital-at-home program.^5,6

Advocates argue that building hospital-at-home beds is less expensive than building physical beds. However, upfront costs for building physical hospital beds are financed through capital projects that spread the costs over decades. Hospital-at-home programs, on the other hand, require financing through operating margins, because this investment mostly involves personnel rather than a physical asset. Given that operating margins are often slim, this difference in funding streams may explain why primarily large, academic health systems with greater financial resources have pursued hospital-at-home programs.³ It also means that hospital-at-home programs carry immediate financial risk if they are not able to meet enrollment targets and generate revenue quickly. Another financial barrier is that payers besides Medicare, including Medicaid and commercial payers, may offer less favorable rates for hospital-at-home relative to traditional hospital stays or decline to participate entirely.

Thus, to build and sustain the early stages of hospital-at-home programs, health systems need alternative funding mechanisms beyond reimbursement. CMS has policy levers to support start-up costs – new payment models that guarantee upfront investment while adjusting cost and quality targets over time. An example, although focused on chronic rather than acute illness, is the newly announced Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model, which seeks to support better use of medical technology.⁸ Payment models can also be designed to encourage facilities with lower revenue, including rural and safety-net hospitals, to participate; this would expand access to hospital-at-home for these populations. Finally, new CMS policies should encourage state Medicaid programs to participate and establish guidance for commercial payers, allowing hospitals to build payer-agnostic programs.

Fostering innovation beyond the traditional paradigm of hospitalization

Even with sufficient investment, hospital-at-home programs are challenging to build. To obtain a waiver, CMS required that hospitals should, to the extent possible, duplicate hospital-level services at home. For example, the waiver requires twice daily in-person nursing or paramedic visits, as well as daily virtual or in-person physician rounds. The waiver also requires the full gamut of ancillary services, including mobile imaging, specialty consults, meal services, laboratory testing, delivery of hospital equipment, and inpatient pharmacy formulary with rapid medication delivery. Prior to enrolling their first patient, hospitals must acquire and arrange this array of resources, technology, and personnel, often relying on support from external vendors to provide services that they cannot deliver on their own. For smaller or rural hospitals, this level of resources and coordination often precludes participation.

The rationale for requiring the full scope of hospital-level services is that if reimbursement for hospital-at-home and brick-and-mortar admissions are the same, then the services should be the same. Yet this argument misses the important question – what do patients actually need? We believe that policymakers should focus on this question to evolve hospital-at-home models while preserving necessary standards for quality and safety.

One approach is for CMS to relax the constraint that hospital-at-home fully replicate traditional hospital services. For some patients, a scaled-down version may be appropriate. Twice daily in-home nurse visits might be replaced with virtual assessments, if similarly effective, to improve staffing efficiency and recruitment.⁷ Patients could be allowed to take their own medications when appropriate, rather than have pharmacies dispense all medications to the home. And rather than require virtual specialty consultations, expedited outpatient appointments might achieve similar goals. Hospitals could start with simpler models focused on less sick patients and later progress to serve patients with greater acuity. Policymakers may consider lower levels of reimbursement – akin to hospitalization under observation status. In contrast, more experienced hospital-at-home programs may seek to go beyond what is currently permitted by the AHCaH waiver, like accepting patients who require hemodialysis or accepting direct admissions to hospital-at-home without requiring an ED visit.

Another approach would be for hospital-at-home programs to deliver the full continuum of hospital and post-acute care at home, potentially through a single bundled payment. Models that integrate acute and post-acute care have potential advantages for hospitals, payers, and patients. Hospitals benefit from greater coordination between hospital-at-home and traditional home health, with greater incentives to shorten brick-and-mortar hospital length-of-stay, improve transitions, and deliver longitudinal services at home. Payers may observe reductions in total cost of care, including fewer admissions to skilled nursing or rehabilitation facilities. For patients and caregivers, an integrated episode of acute and post-acute care may offer a more seamless experience. Of note, expiration of the waiver prompted some hospitals to redesign their programs as makeshift bundles, charging separate hospital, outpatient, telehealth, and home health reimbursement to replace the single payment for hospital-at-home admission.

Next steps for hospital-at-home

Hospital-at-home still has the potential to transform the delivery of acute care, improving patient outcomes while lowering costs. New technology can only advance its capabilities. Yet there are potential risks as hospital-at-home scales, including disparities between facilities, greater demands on home caregivers, and paradoxically increased healthcare spending if patients are admitted who may not require these services. In addition, short-term gains in hospital capacity might be eroded in the long-term if hospitals further downsize physical beds, leading to another capacity crisis. Achieving the goals of hospital-at-home, however, should not require adhering to the traditional paradigms of reimbursement or hospital care. Ultimately, stronger collaboration between payers, policymakers, and health systems is needed to design new investment strategies that support hospital-at-home as well as policies that ease implementation and encourage growth.