Home Health & Hospice Week

Managed care spending grows more than 50%.

As Medicare spending grows, the home health portion of it is shrinking. So indicates the latest figures from an influential advisory body to Congress.

In 2010, home health spending made up 4 percent of Medicare’s $517 billion in spending, the Medicare Payment Advisory Committee shows in its 2021 Medicare spending data book. In contrast, in 2019 home health payments made up half that — 2 percent of Medicare’s $787 billion in spending, the data book shows.

At the same time, hospice spending remained steady at 3 percent in both 2010 and 2019.

Multiple factors have declined in home health between 2011 and 2019, MedPAC shows: number of users (–4.3 percent); share of FFS beneficiaries who used home health care (–8.7 percent); episodes (–11.0 percent); and episodes per home health patient (–7.0 percent). Home health visits provided are also down in the period, both for visits per home health episode (–4.7) and visits per home health patient (–11.1).

MedPAC doesn’t think the slumping stats should translate into any reimbursement relief for HHAs. “Throughout the 2011 to 2019 period, Medicare implemented a number of policies to reduce or slow the growth of home health payments” the data book reports. “However, despite these reductions, the margins of freestanding home health agencies averaged in excess of 15 percent in this period, indicating that payments remain well in excess of costs despite these policies.”

Another big change: “Spending on managed care plans has grown from 22 percent of Medicare spending in 2010 to 34 percent in 2019,” MedPAC highlights in the data book. “This growth is largely because the number of beneficiaries enrolled in Medicare Advantage nearly doubled over this period” while “the number of beneficiaries in fee-for-service (FFS) Medicare has stayed relatively flat,” it says.

See the data book at http://medpac.gov/docs/default-source/data-book/july2021_medpac_databook_sec.pdf.