Home Health & Hospice Week

Industry Notes:

Study: HHA Profit Margins Cut Drastically Under Rebasing

Medicare reimbursement reductions are cutting home health agency operating margins to the bone, warns a new study.

New analysis by Avalere Health finds that overall profit margins for publicly traded home health companies averaged just 2.4 percent in 2014, according to a release from the Partnership for Quality Home Healthcare. Providers’ overall margins have fallen by two-thirds since their 2010 figure of  7.1 percent.

“The plight facing small and rural home health agencies may be even more severe,” says the lobbying group in a release. “According to [the Medicare Payment Advisory Commission’s] March 2010 report, small home health agencies typically experience lower margins than those experienced by large providers.”

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