Home Health & Hospice Week

A profit margin that climbed 4 percentage points haunts the industry.

Decision-makers will be making some tough budget calls this year. Here’s some of the Medicare Payment Advisory Commission data they will have on hand to help influence their thinking:

• A 5 percent rate reduction in 2023 would decrease Medicare spending by up to $2 billion in 2023 and up to $10 billion over five years.
• HHAs’ Medicare profit margin in 2020 was 20.2 percent, up significantly from a margin of 15.8 percent in 2019. The 2020 figure includes COVID relief funds. The number compares to a 15.3 percent margin in 2018, 15.2 percent in 2017, 15.5 percent in 2016, 15.6 percent in 2015, 10.8 percent in 2014, 12.7 percent in 2013, 14.4 percent in 2021, and 14.8 percent in 2011. The Medicare margin for HHAs averaged 16.2 percent from 2001 to 2019, MedPAC summarizes.
• The number of HHAs decreased 1 percent to 11,456 in 2020, “continuing a slow decline since 2013,” MedPAC says. That reduced the number of HHAs per 10,000 fee-for-service beneficiaries to 3.1, compared to 3.4 in 2013.
• The number of benes receiving home health care fell a whopping 7.3 percent to 3.1 million from 2019 to 2020, while the share of FFS benes receiving home health fell by 4.7 percent to 8.1 percent in 2020. Back in 2011, those figures were 3.4 million and 9.4 percent, respectively.
• Medicare spending on home health fell 4.7 percent to $17.1 billion in 2020, down from $18.4 billion in 2011.
• The cost of a 30-day period grew by 3.1 percent in 2020.
• From 2011 to 2019, the number of 60-day home health episodes fell from 6.8 million to 6.1 million, a drop of 1.3 percent per year on average.
• The number of in-person visits provided to home health benes fell by 18.6 percent relative to 2019, at a higher rate than the number of users fell. “Decline in therapy services accounts for most of the decline in in-person visits,” MedPAC says. Occupational therapy visits were down 24 percent, speech-language pathology 23 percent, and physical therapy 17 percent. However, medical social service and aide visits also had big drops — 21 percent and 14 percent, respectively.
• The share of 30-day periods with at least one in-person therapy visit fell from 65 percent in 2019 to 57 percent in 2020.
• The share of Medicare beneficiaries hospitalized during their home health stays declined to 18.3 percent in 2020, down from 21.4 percent in 2019.
• Over 99 percent of FFS beneficiaries lived in a county served by at least one HHA in 2020, 98.6 percent lived in a county served by two or more HHAs, and 87.9 percent lived in a county served by five or more agencies.
• In 2020, “the reported acuity for home health beneficiaries was higher than in 2019 for two measures of severity: the reported functional status of beneficiaries at the start of the 30-day period and the number of cases with a high level of clinical comorbidities (recognized by the PDGM with higher payments),” MedPAC observes. The share of 30-day home health periods that reported the highest level of functional debility rose from 33.0 percent to 41.6 percent in that period, and the share of patients coded in the highest paying comorbidity group rose from 8.5 percent to 13.9 percent.