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.”