Home health firms fall as CMS proposes deep Medicare cuts

Shares of home health and hospice providers fall premarket after the Centers for Medicare & Medicaid Services proposes a 6.4% reduction cut in 2026 Medicare payments

Enhabit EHAB.N fall 8% to $8.86, while Amedisys AMED.O drop 1.3% to $97.10

Monday's recommendation could cut $1.1 billion from the sector compared to 2025, CMS estimates

Oppenheimer called the proposed cut "significantly worse" than industry expectations and warned it would be "devastating" for the home health industry

For every 1% cut, companies like Amedisys and Enhabit would see a direct hit to earnings, brokerage says

Jefferies estimates the cut would reduce EBITDA by about $55 million for AMED and $30 million for EHAB

However, analysts at TD Cowen said they expect the HHA industry to heavily lobby CMS for relief from the temporary cut, suggesting the final reduction will likely be smaller

As of last close, EHAB up 23.4% and AMED up 8.4% YTD