CMS spells out how states must report direct care worker pay

The Centers for Medicare & Medicaid Services issued guidance to states on Oct. 9 explaining how to report the share of Medicaid home care payments that go to direct care worker compensation.

What's in it: State Medicaid Director Letter 26-005 covers homemaker, home health aide, personal care and habilitation services delivered through 1915(c), (i), (j) and (k) authorities and 1115 demonstrations. States must report annually starting July 9, 2028, and show readiness by July 9, 2027.

Why it matters: For the first time, states will publicly show how much home and community-based services money reaches the workers who deliver care. The data could inform rate setting and workforce policy.

Who it affects: State Medicaid agencies, HCBS providers, direct support professionals and home care aides, and the people supported who depend on a stable workforce.

What's next: Providers should expect states to request compensation data well ahead of the 2028 deadline.

Source: CMS, SMD# 26-005, Oct. 9, 2026: https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/SMD26005.pdf