U.S. Senate Democrats propose adding home care to Medicare
WASHINGTON, UNITED STATES — Senate Finance Committee Ranking Member Ron Wyden and 16 Democratic colleagues released a Medicare long-term care roadmap on May 20 that, if it moves, would force the United States home care industry to build something it has never had: a Medicare fee-for-service billing infrastructure for custodial in-home care.
According to a report from STAT News, the plan, co-signed by 17 senators, proposes a Medicare home care guarantee, increased Medicaid long-term care funding, and stricter nursing home staffing standards. No cost estimates are attached.
Proposed benefit has no billing precedent
Today, Medicare covers skilled home health visits and post-acute skilled nursing stays of up to 100 days. It does not touch custodial care — the daily assistance with bathing, dressing, and mobility that accounts for most long-term care needs.
Extending Medicare into custodial home care would require agencies to build or acquire a fee-for-service billing infrastructure most have never needed.
Wyden and colleagues framed the goal as ensuring that “middle-income families can access care without depleting their savings” — reaching a demographic currently locked out of both Medicaid’s means-tested eligibility and adequate private long-term care insurance coverage.
For home health operators, that expansion means billing Medicare for a class of care that has never had a standardized federal documentation framework or claims adjudication pathway.
Workforce gaps leave RCM capacity exposed
The workforce math is unforgiving. Long-term care has shed nearly 229,000 caregivers since February 2020, and the pay gap has not closed.
87% of nursing homes report moderate to high staffing shortages; 61% limit new admissions as a direct result.
Long-term care workers earn a median of $15.22 per hour — against $20.07 for the broader U.S. workforce — making it structurally difficult to compete for billing and revenue cycle management (RCM) talent.
Nursing home care now averages $327 per day nationally, suggesting any Medicare home care benefit would become the default payer for a massive, previously uninsured care category.
CMS’s existing home health billing requirements — OASIS assessments, Medicare Advantage authorization cycles, conditions of participation documentation — already strain agency back offices. A custodial care benefit at Medicare scale would multiply that load.
Medicare claims processing, OASIS documentation support, medical coding, and revenue cycle management are already among the most commonly outsourced administrative functions in U.S. home health — and BPO firms have built specialized Medicare billing expertise over the past decade.
If the Wyden proposal advances — whether as a standalone bill or part of a post-election Democratic agenda — the question for home health operators and long-term care RCM buyers won’t be whether to outsource the back office.
