MedPAC Recommends the Congress Reduce Home Health Payment Rates

WASHINGTON—The Medicare Payment Advisory Commission (MedPAC) voted on Jan. 11 to recommend that Congress reduce 2025 home health payment rates by 7%.

While the move was expected, advocates and the National Association for Home Care & Hospice (NAHC) still voiced their disappointment at the guidance. 

“That recommendation is based on an antiquated methodology of assessing whether the rates are sufficient to provide beneficiaries with access to care,” said Bill Dombi, NAHC president. “Given that the current rates are insufficient, the cut recommended today would essentially destroy the primary Medicare benefit that actually saves Medicare expenditures through a reduction in more costly care. We call on Congress to see the true picture that home health care needs more support rather than less.”

Dombi said MedPAC was “easier” on hospice recommendations, keeping its stance from December with a suggested rate freeze.

“This recommendation is offered at a time when hospice care costs have risen faster than any inflation update provided by CMS (Centers for Medicare & Medicaid Services),” Dombi said. “A rate freeze would interfere with the progress made through hospice wherein highly patient-centered care, controlled by the patient at the most important point of an individual’s life, offers Medicare with significant financial savings while providing incredible end-of-life care. We believe Congress will continue its commitment to protect hospice care.”

MedPAC makes recommendations to Congress and to the Secretary of Health and Human Services on issues affecting the administration of the Medicare program. The commission publishes the voted-on recommendations in two main reports that are released in March and June of each year.

These recommended cuts come while home health agencies and associations have expressed to CMS that the methodology used to determine future home health payment rates will “eventually destroy the value of home health service benefit.”

The American Hospital Association reported MedPAC also voted to recommend that in 2025 Congress:

• Update rates for hospital inpatient and outpatient services by the current law amount plus 1.5%
• Distribute an additional $4 billion to safety-net hospitals by transitioning to a Medicare safety-net index policy
• Update Medicare payments for physicians and other health professional services by half the Medicare Economic Index increase, and enact non-budget-neutral dd-on payment under the physician fee schedule to services provided to low-income Medicare beneficiaries
• Reduce payment rates for skilled nursing facilities by 3%
• Reduce payment rates for inpatient rehabilitation faculties by 5%