The Medicaid 80/20 rule: what it means for your margin.
A federal rule is reshaping home-care economics by dictating how much of each Medicaid dollar has to reach the caregiver. The one lever it leaves an owner is collection.
What the rule requires
The Ensuring Access to Medicaid Services final rule, 89 FR 40542, published May 10, 2024, https://www.federalregister.gov/documents/2024/05/10/2024-08363/medicaid-program-ensuring-access-to-medicaid-services, directs that at least 80 percent of Medicaid payments for homemaker, home health aide, and personal care services go to direct-care worker compensation. The payment adequacy provision is codified at 42 CFR 441.302(k) and 441.311(e).
That leaves roughly 20 percent for everything else. Much of that 20 percent, EVV, nurse supervision, quality reporting, background checks, training, is not optional. It is required to keep the license and the contracts.
The timeline is phased and moving
The compliance date CMS set for the 80 percent payment adequacy requirement in the May 2024 final rule is July 9, 2030, six years after the rule's effective date. The reporting provisions phase in earlier. As of September 2026 that provision is not settled: it has remained the subject of continuing federal rulemaking and litigation since publication, and states are at different points in implementing it. Confirm the current effective date and your state's position with your state Medicaid agency rather than assuming any published timeline is still current.
The lever you actually control
If 80 cents of every collected dollar is spoken for by direct-care compensation, the practical way to protect the business is to collect more of what you already earned. Recovered revenue carries no new overhead against the 80 percent split, because the caregiver was already paid on the visit. It moves straight through to the 20 percent that keeps the business standing.
Where to start
A 90-day look-back at unbilled hours, unworked denials, and silent underpayments. The margin you keep comes from money you already earned, rather than from cutting the 20 percent that keeps you compliant.
Plain answers, on the record.
Collect is money you never captured. Cover is money a payer can still take back.
Reeve reports the two separately and never adds them together, because only one of them is yours to go and get. The Margin Review reads both on your own export and costs nothing.
One pass over your own export, in your browser. The findings are yours to keep, with no obligation.
The recovery lane. Care you delivered and never billed, units short of what was authorized, lines paid under the published rate.
Everything in Collect, plus the exposure lane. Retired codes, authorizations at the end of their period, care delivered past what was approved.
Month to month, no annual contract. Read-only in every tier. Run the free review.
Protect the 20 percent by collecting the 100.
The Margin Review runs a 90-day look-back at unbilled hours, unworked denials, and underpayments and returns a ranked list of recoverable dollars with a reason on each line.