Home Health & Hospice Week

As expected, the Medicare Payment Ad-visory Commission will once again urge Congress to reduce home health agency and hospice payment updates.

“We think there are some flaws in the payment system that need to be fixed to assure an ap-propriate distribution of dollars across patient types and home health agencies, and then a rebasing of the payment system, which has been overly generous in the past,” summarized MedPAC Chair Glenn Hack-barth in the advisory body’s January meeting.

Hackbarth tried to soften the blow. “I would note, with regard to both SNFs and home health, we want to be clear: We think these are vital services for Medicare beneficiaries. The fact that we think the payments are too high does not mean that we don’t think that good SNF care and good home health care is not an integrally important factor in providing good care to Medicare beneficiaries,” he said. “I think we’re unanimous in believing that they are vital parts of a good care delivery system. It is possible, however, to pay too much, even for a good thing, and that is what we’re doing in each of these cases.”

Margins for HHAs and SNFs have been in the double digits for over a decade, noted MedPAC staffer Evan Christman in the meeting.

Hospice: MedPAC projects that hospices will run a 6.6 percent Medicare profit margin in 2015, MedPAC staffer Kim Neuman said in the meeting. That’s down from 10.1 percent in 2012, but partially due to the 2 percent sequestration reduction, Neuman noted.

Hospices may see their referrals from hospitals affected by a hospital provision slated for recommendation by MedPAC. Congress should require the Centers for Medicare & Medicaid Services to prorate hospital DRG payments when the patient transfers to hospice early, MedPAC says.

“Short hospital stays that were transferred to hospice had a profit margin for hospitals of 88 percent in 2012, and if the transfer policy had ap-plied to these stays, the margin would have been 31 percent,” Neuman told commissioners.

CMS already docks hospital DRG payments when certain DRG patients transfer to HHAs early.

MedPAC will issue its recommendations to Congress in its annual March report.