MedPAC Calls for 7% Home Health Rate Cut

WASHINGTON (December 15, 2022)—The Medicare Payment Advisory Commission (MedPAC) discussed a proposal to reduce the 2023 Medicare base payment rate for home health agencies by 7% during the commission’s annual December meeting, the National Association for Homecare and Hospice (NAHC) reports. NAHC said that would virtually guarantee reduced access to home health care.

MedPAC staff presented to commisioners information and recommendations from the 2021 benefit data, including the following points:

• Medicare margins for 2021 were 24.9%;
• All-payer margin in 2021 was 11.9%;
• Medicare program spent $16.9 billion on home health care;
• There are pproximately 11,400 home health agencies in the United States;
• 3 million beneficiaries served;
• 3 million 30-day periods;
• 93% percent of services were provided by freestanding home health agencies;
• 98% of beneficiaries live in a ZIP code served by two or more home
  health agencies;
• About 7% percent of beneficiaries live in a ZIP code served by at least five home health agencies;
• Per capita utilization was 26 home health periods per 100 fee-for-service beneficiaries;
• In-person visits averaged 8.8 per 30-day period.

Although several commissioners noted that home health care played an important role during the pandemic and will continue to serve a valuable role in the future, they unanimously supported the recommendation to decrease paymenst by 7%.

NAHC President William A. Dombi called the recommendation “a continuation of MedPAC’s failure to utilize a method of assessing care access that fits within the real world of home health services.”

“Today, MedPAC’s own data shows that 12-15% of Medicare revenues are needed to subsize the less than cost payment rates from Medicaid and Medicare Advantage. These rates are sanctioned by CMS, which is responsible for assuring that those government-based health care programs provide care access comparable to that available to the Medicare enrollees,” Dombi said. “A 7% reduction in Medicare payment rates virtually guarantees a loss of care access for all individuals needing home health services. We call on MedPAC to incorporate this reality into their assessments and to join forces with the home health community to correct the systemic failure that leads to one govern-based health care program subsidizing two others. Home health agencies are at the mercy of Medicare Advantage plans and Medicaid programs on their own. ”