Hospital at Home at a Crossroads: Navigating the Waiver Expiration and What Comes Next

The recent expiration of the Acute Hospital Care at Home waiver introduced a new kind of uncertainty for hospitals that have reimagined acute care delivery. While the waiver’s future depends on ongoing federal discussions, the question facing health systems is not political. It is strategic: how do we sustain progress when policy pauses?

An Innovation in Pause, Not in Question

The hospital at home model has demonstrated clear benefits since it gained traction in late 2020. More than 413 hospitals across 39 states have been approved under the waiver, caring for thousands of patients who otherwise would have required inpatient admission. Compared to traditional inpatient care, hospital at home care consistently results in comparable clinical outcomes, higher patient satisfaction and lower total costs of care.

What remains uncertain is the operating environment. With the waiver expired, Medicare fee-for-service reimbursement for hospital at home programs has paused, leaving hospitals to determine whether to continue under commercial and managed care arrangements, temporarily suspend activity, or develop hybrid models that keep infrastructure active.

Operational and Market Implications

For many organizations, this transition represents a stress test of adaptability. The investments made under the waiver, including remote monitoring systems, clinical protocols, vendor partnerships and trained interdisciplinary teams, cannot simply be shelved without consequence.

Technology vendors and clinical partners are also navigating this state of limbo. For the time being, companies such as Contessa Health and DispatchHealth continue to staff clinical teams and maintain logistics networks without guaranteed reimbursement. Maintaining this readiness reflects not only operational resilience but also a belief in the model’s long-term trajectory.

In practical terms, every organization faces three choices:

• Pause and preserve assets until reimbursement clarity returns.
• Pivot to alternative payer arrangements where feasible.
• Persevere by embedding home-based capabilities into broader acute care redesign efforts.

Each path carries cost and risk but also insight into how systems handle uncertainty, agility and strategic patience.

Financial and Policy Outlook

Hospital at home has proven its clinical value but remains financially fragile under traditional hospital cost structures. When fixed overhead from inpatient operations is applied to home-based care, returns often appear negative. Sustainability depends on scale (typically between 30 and 60 patients per day) to achieve cost efficiency. For most systems, hospital at home has been a capacity relief strategy, not a revenue driver. Forward-looking CFOs are rebuilding financial models from the ground up, focusing on variable cost structures, capital-light planning and workforce optimization. At scale, leading systems are finding cost parity with inpatient care, where the return lies in long-term sustainability, workforce flexibility and infrastructure savings rather than short-term margins.

On the policy front, a short-term waiver extension tied to federal budget negotiations remains the most likely path. A five-year renewal would offer hospitals the stability to invest confidently in home-based capacity and workforce development. Until Congress acts, health systems must balance financial discipline with strategic patience, positioning hospital at home as both a care innovation and a long-term capacity solution awaiting policy alignment.

Strategic Readiness: Preparing for Multiple Futures

While the exact timing and structure of federal action remain unsettled, health systems can prepare now for several potential outcomes. Scenario planning is the most prudent stance.

Strategic Actions for Health Systems

For health systems, this moment calls for strategic recalibration rather than retreat. Key priorities include:

• Reassessing care delivery mix. Identify which patient populations and service lines can remain viable under commercial or managed care reimbursement, and where operational adjustments may be needed.
• Reinforcing partnerships. Review vendor contracts and staffing models to ensure flexibility across payer types and reimbursement scenarios.
• Advocating with evidence. Use local outcomes data such as readmission reductions, patient satisfaction and cost neutrality to help lawmakers understand the program’s tangible impact.
• Building hybrid pathways. Continue developing transitional models that bridge inpatient and home-based care, maintaining organizational readiness even through policy disruptions.
• Integrating finance and operations. CFOs and clinical leaders should jointly track both patient outcomes and cost performance, rather than treating hospital at home as a stand-alone pilot.
• Aligning with payers early. Establish clear reimbursement frameworks for commercial and Medicare Advantage populations to reduce dependency on federal waivers.
• Using technology as a cost stabilizer. Remote monitoring, automation and predictive analytics can mitigate labor costs and optimize care delivery at scale.

For more insights, Sg2 members can check out our Post Acute and Care at Home Resource Kit. Not a member? Reach out to us at learnmore@sg2.com for information on the expert intelligence, data-driven insights and strategic perspective Sg2 offers to health systems nationwide.