Home Health & Hospice Week

Gas might be the flashiest of cost monsters, but there are plenty of others.

Medicare’s methodology for calculating home health agencies’ costs needs some serious work, and in the meantime agencies are suffering with a suppressed payment update — which is actually a cut in 2023.

Staffing tops HHAs’ list of skyrocketing expenses (see story, p. 230). But that’s far from the end of the list, according to commenters on the home health 2023 proposed payment rule. Hundreds of HHAs point out these top costs in their letters to the Centers for Medicare & Medicaid Services.

• Fuel. Not surprisingly, the extreme rise in the cost of gas featured in many agencies’ comment letters, which were due Aug. 16. “Gas prices are through the roof,” reports an anonymous commenter from Oregon. “Our clinicians rely on gas to get to their patients. So it’s costing us more to serve our patients, but this rule would cut our reimbursement,” the commenter complains.

“Gas prices have increased over 53 percent in the past year,” exclaims Michelle Neyrey, the director of nursing for a small home health agency in the greater New Orleans area. (At press time, the year-over-year increase was at 23 percent after gas prices have come down from an all-time high of $5.01 per gallon on June 14.)

Plus: “Gas prices … are huge factors in home health staffing and a decrease in applicants for multiple open positions,” reports Samantha Lineberry in Tennessee in her comment letter.

• Supplies. From personal protective equipment to items such as uniforms, the cost of supplies has likewise skyrocketed. “We have seen some medical supplies triple in cost,” Melanie Keller in Tennessee says in her comment letter.

“Since the COVID pandemic, we have seen an increase of over 200 percent or more for needed supplies to treat wounds, PPE, lab supplies,” Dina Ossa in California tells CMS. “A box of non-sterile vinyl gloves was $2.17/box prior to COVID, same box today is over $25.00,” Ossa relates.

• Benefits. It’s not just salaries that are costing more. Agency costs at an “all time high” include those for worker’s comp and insurance, Keller notes.
• Non-Medicare payors. Many agencies’ comment letters note that the brutally low reimbursement rates paid by managed care companies are also a drag on HHA finances. “Managed care has already whittled away at the care that is needed for many,” says Steven Mauricio, a director of rehabilitation for an agency in Providence, Rhode Island, in his comment letter.

There is a “high cost of fragmentation by the Medicare Advantage plans that have gone rogue,” says Bara Alsalaheen in Michigan in his comment letter.

Medicaid has the same problem of low reimbursement, multiple agencies note. “We are already seeing that patients who need charity care or who are on Medicaid are nearly impossible to place, as we have had some that we have served who moved out of our service area, and when we tried to help them establish care in their new home, no agencies would take them due to the low reimbursement,” Kay Findlay in Kansas says in her letter. “This is only going to get worse with your proposed reductions in payment,” Findlay tells CMS.

“Unless CMS is willing to mandate that Medicare Advantage and Medicaid programs pay for the actual cost of care and comparable rates to Medicare, access to appropriate levels of care is going to be materially limited,” says Mary Haynor in Wisconsin in her comment letter.

• Sequestration. “Home health agencies have incurred an additional reimbursement impact with the resumption of 2 percent sequestration in 2022,” points out University of Pittsburgh Medical Center (UPMC) Home Healthcare President Paula Thomas in the hospital-based agency’s comment letter.

The sequestration cut is one of many items that “will have negative effects on home health agency operating margins,” notes Andrew Wheeler with the Missouri Hospital Association in the organization’s comment letter.