Free tool · Home care
Medicaid 80/20 Rule Calculator for Home Care Agencies
Enter your Medicaid payments and direct care worker compensation. See your percentage, the dollar gap to 80 percent and the compliance date. Free, with no signup.
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The calculator
Check your 80/20 position
Enter your Medicaid payments for homemaker, home health aide and personal care services and what you paid direct care workers to deliver them. Everything runs in your browser. Nothing you enter is saved or sent.
Your result
Enter your Medicaid payments and direct care worker compensation, then select Check my 80/20 position.
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Current status (checked October 19, 2026)
Where the 80/20 rule stands today
The 80/20 rule is still in the federal regulation. Paragraph (k) of 42 CFR 441.302 requires each provider to spend at least 80 percent of the Medicaid payments it receives for covered services on compensation for the direct care workers who deliver them. The eCFR shows no change to that paragraph since the May 10, 2024 final rule (89 FR 40542).
The compliance date is July 9, 2030. The regulation says states must comply beginning 6 years after July 9, 2024 (42 CFR 441.302(k)(8)). For managed care, the requirement applies to the first rating period for contracts starting on or after that date.
A change is possible. CMS has a proposed rule at the Office of Management and Budget, titled Strengthening the Integrity of Medicaid and CHIP Managed Care, Financing, and Access to Care, that CMS says would include rescinding or revising provisions of the 2024 rules. When we checked, no proposal had been published, so nothing has been rescinded, delayed or struck down. The 2026 enforcement delays CMS announced applied to other parts of the Access Rule, not the 80 percent requirement; see our post on what was delayed and what was not. We will update this page when that changes.
The rule
How the 80/20 rule works
The rule covers homemaker, home health aide and personal care services, as defined in 42 CFR 440.180(b)(2) through (4). The text of 441.302(k) applies to these services when they are delivered under section 1915(c) home and community-based waivers. If you deliver them under another Medicaid authority, ask your state Medicaid agency whether and how the requirement applies to your program.
The test is run provider by provider, not for the state as a whole. Take the Medicaid payments you receive for the covered services, fee-for-service and managed care, standard and supplemental payments. At least 80 percent has to go to direct care worker compensation. The other 20 percent covers everything else: supervision, scheduling, billing, insurance, rent and profit.
Payments for self-directed services where the participant sets the worker's pay rate are left out of the calculation (42 CFR 441.302(k)(2)(ii)). Indian Health Service and Tribal health programs are exempt.
Numerator
What counts as compensation
The regulation defines compensation in 42 CFR 441.302(k)(1). It includes three things, and a direct care worker is defined broadly enough to include aides, personal care attendants, direct support professionals and nursing staff delivering the service.
- Salary, wages and other remuneration as defined by the Fair Labor Standards Act.
- Benefits, such as health and dental coverage, insurance, paid leave, retirement and tuition reimbursement.
- The employer's share of payroll taxes for the direct care workers delivering the services.
The rule also lists excluded costs, which are not included in the calculation: required training costs, travel costs and personal protective equipment costs for direct care workers. How a state applies these exclusions in its reporting form is a state decision, so confirm it before you finalize a number. Scheduling, intake, billing and quality staff are not direct care workers.
What your state can change
Small provider and hardship options
A state may set a lower percentage for small providers, using reasonable, objective criteria developed through a public notice and comment process (42 CFR 441.302(k)(4)). A state may also exempt a reasonable number of providers facing extraordinary circumstances that prevent compliance (441.302(k)(5)). That is why the threshold in the calculator can be edited. Use the percentage your state has told you applies to your agency.
States must report to CMS each year on compliance and, if they use these options, on the criteria they chose, the share of providers affected and their plan to reduce reliance on them (441.302(k)(6)). Your own reporting form and deadlines come from your state agency or managed care plan.
Putting numbers on it
Worked example
An agency receives $1,000,000 in Medicaid payments for personal care in a year. It paid caregivers $650,000 in wages, $50,000 in benefits and paid leave, and $60,000 in employer payroll taxes, so compensation is $760,000. That is 76.0 percent of payments.
At an 80 percent threshold the agency needs $800,000 in compensation, so it is $40,000 short. That is $40.00 of extra compensation for every $1,000 of Medicaid payments. If the agency had instead paid $810,000 in compensation, it would be at 81.0 percent with $10,000 above the line. Try your own numbers above.
Limits of an estimate
What this calculator does not do
It does not sort your payroll into direct care and other staff, apply your state's treatment of training, travel and protective equipment costs, or know whether you qualify as a small provider. It does not prove compliance. Your state decides how providers report, and the requirement does not apply until July 9, 2030. Use the result as a planning check and confirm it with your state agency or a CPA.
To cost out your caregivers properly, use the home care hourly rate calculator. To build the payroll and chart of accounts structure that makes this ratio provable, see home care accounting services and payroll services.
Where the rules come from (checked October 19, 2026)
Sources and disclaimer
- 42 CFR 441.302(k), HCBS payment adequacy (eCFR)
- 42 CFR 441.302 text with definitions (Cornell Legal Information Institute)
- Medicaid Program; Ensuring Access to Medicaid Services, final rule, 89 FR 40542, May 10, 2024 (GovInfo)
- CMS proposed rule under development, RIN 0938-AV70 (OMB Unified Agenda)
- McKnight's Home Care, CMS soon to drop rule that may involve rescission of 80/20 provision
This calculator provides general information and an estimate, not tax, legal or reimbursement advice. It does not replace the regulation or your state Medicaid agency's rules and reporting forms. Nothing you enter is stored or sent.
What happens next
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Free 20-minute call
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- 02
Written fee quote
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- 03
We handle it
Your CPA team takes it from there and keeps you posted until it is filed.
FAQ
Medicaid 80/20 calculator questions, answered
Still have questions? Ask them on a free 20-minute call.
What is the Medicaid 80/20 rule?
It is the HCBS payment adequacy requirement in 42 CFR 441.302(k). Each provider must spend at least 80 percent of the Medicaid payments it receives for homemaker, home health aide and personal care services on compensation for the direct care workers who deliver them. The rest, up to 20 percent, can cover other costs and profit.
Is the 80/20 rule still in effect?
It is still in the regulation. As of October 19, 2026 the eCFR shows no change to paragraph (k) since the May 2024 final rule, and we found no published rule delaying, rescinding or changing it. CMS has a proposed rule at OMB that it says would rescind or revise some 2024 provisions, so check back. Enforcement delays announced in 2026 covered other parts of the Access Rule.
When do providers have to comply?
The regulation says states must comply beginning 6 years after July 9, 2024, which is July 9, 2030. Managed care contracts follow the first rating period beginning on or after that date.
Which services does it cover?
Homemaker, home health aide and personal care services under 42 CFR 440.180(b)(2) through (4). The regulation text applies to these services when they are delivered under section 1915(c) waivers. Ask your state whether your program is covered if you are paid under a different authority.
What counts as direct care worker compensation?
Salary, wages and other pay as defined by the Fair Labor Standards Act, benefits such as health and dental coverage, paid leave, retirement and tuition reimbursement, and the employer's share of payroll taxes for the direct care workers (42 CFR 441.302(k)(1)).
Who is a direct care worker?
The regulation includes nurses providing nursing services, licensed or certified nursing assistants, direct support professionals, personal care attendants and home health aides, and other paid staff who provide daily living, behavioral, employment or community integration supports. Office, scheduling, billing and quality staff are not direct care workers.
Do training, travel and PPE costs count?
The rule calls required training, travel and personal protective equipment costs for direct care workers excluded costs that are not included in the calculation. How your state applies that in its reporting form can differ, so confirm the treatment with your state agency.
Can a state set a different percentage?
Yes, for small providers. A state may set a lower percentage using reasonable, objective criteria developed through public notice and comment (42 CFR 441.302(k)(4)). It may also grant hardship exemptions for extraordinary circumstances. Edit the threshold in the calculator if your state has given you a different number.
Does it apply to private pay or veterans' benefits?
No. The calculation uses Medicaid payments for the covered services. Private pay, long-term care insurance and veterans' benefits are not Medicaid payments. Keep them out of the payments you enter, and keep the matching caregiver pay out of compensation.
How do states report this?
States report annually to CMS on meeting the minimum performance levels, and on their small provider and hardship criteria if they use them (42 CFR 441.302(k)(6)). Providers report to the state or managed care plan in the format the state chooses.
What if my compensation is higher than my payments?
The calculator warns you. It usually means the numbers cover different things, such as all caregiver hours against only the Medicaid-paid portion, or private-pay work mixed in. Match both to the same services and period before relying on the result.
Can you calculate my real ratio from my books?
Yes. Book a free 20-minute call. Splitting direct care payroll from other payroll in your chart of accounts is the first step, and it is easier to set up now than to rebuild later.
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