Home Health & Hospice Week

Push for cap cut is an ‘attack on the hospice benefit itself,’ one expert blasts.

It’s official: The Medicare Payment Advisory Commission will urge Congress to slash home health and hospice agency payment rates in 2024.

After discussing the proposed cuts in the advisory body to Congress’ December meeting (see HHHW, Vol. XXXI, No. 45), commissioners voted in the Jan. 12 MedPAC meeting to finalize them.

For home health: In its March report to Congress, MedPAC will urge lawmakers to cut the home health base payment rate by 7 percent. That would potentially strip more than $10 billion from home health spending over five years, notes the National Association for Home Care & Hospice.

For hospice: MedPAC will advise Congress to reduce the hospice per-patient cap amount by 20 percent in 2024, the fourth year in a row it has made the suggestion. That would slash up to $10 billion from hospice spending over five years, NAHC points out. Unlike in previous years, however, MedPAC will not include a base rate reduction rec in addition to the cap adjustment.

MedPAC staff cited a number of statistics in support of the recs in the January meeting, including profit margins. MedPAC calculates a whopping 24.9 percent Medicare profit margin for HHAs in 2021, dropping to 17 percent in 2023. For hospices, MedPAC estimates a 14.2 percent margin for 2020, dropping to 8 percent for 2023.

Industry representatives and members are quick to decry the recommendations.

“An overall cap reduction is a bad policy and not supported by underlying data,” argues consulting firm The Health Group in Morgantown, West Virginia. “Such an overall reduction would be an attack on the hospice benefit itself,” declares The Health Group in its electronic newsletter. Hospice margins are already projected to drop significantly, it points out.

The hospice cap cut proposal “is deeply problematic for hospice access and utilization,” Jill Olson with VNAs of Vermont warns in a release.

“While the National Association for Home Care & Hospice … is supportive of maintaining current law relative to the hospice payment update for FY2024, NAHC strongly oppose[s] MedPAC’s recommendation to cut the hospice cap,” the trade group notes in its member newsletter.

The National Hospice and Palliative Care Organization “continues to be concerned about the unintended consequences of the recommendation to reduce the aggregate cap on beneficiary access and quality of hospice care,” NHPCO noted when MedPAC provisionally approved the rec in December.

MedPAC Should Examine Medicaid, Medicare Advantage Shortfalls

For home health, the 7 percent cut, “coupled with inadequate payment rates from Medicare Advantage and Medicaid programs, would substantially alter the financial ability of many agencies to provide services going forward,” The Health Group predicts. “There will obviously be an impact on access to care by all patients needing and qualifying for home health care services,” it warns.

The 7 percent reduction rec “is a continuation of MedPAC’s failure to utilize a method of assessing care access that fits within the real world of home health services,” judges NAHC President William Dombi. “MedPAC’s own data shows that 12 to 15 percent of Medicare revenues are needed to subsidize the less-than-cost payment rates from Medicaid and Medicare Advantage,” Dombi tells AAPC. “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,” he says.

“A 7 percent reduction in Medicare payment rates virtually guarantees a loss of care access for all individuals needing home health services,” Dombi stresses. “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 government-based health care program subsidizing two others. Home health agencies are at the mercy of Medicare Advantage plans and Medicaid programs on their own,” he continues.

Bottom line: “Home health and hospice services are both being threatened by shortsighted federal policy,” Olson charges.