Home Health & Hospice Week

But profit margin is up — significantly.

Law and policy-makers will be basing their reimbursement and regulatory decisions on the latest set of data from the Medicare Payment Advisory Commission, at least in part. Be sure you know what they’re focusing on.

For example: In 2020, Medicare spent $17.1 billion on home health services, according to a MedPAC presentation on Dec. 11. “Home health spending declined 4.7 percent in 2020,” MedPAC staffer Evan Christman said in the meeting. “Home health spending was declining prior to 2020, but the decrease this year is larger than prior year,. Christman highlighted.”

In contrast, Medicare spent $19 billion on home health services in 2010 — more than 10 percent more.

Spending isn’t the only indicator to trend downward in 2020. The number of HHAs dropped 1 percent (see story, p. 12), the share of fee-for-service beneficiaries using home health fell by 4.7 percent, and the number of home health users fell from 3.3 million to 3.1 million — 6 percent. And that’s down from 4.4 users in 2011 — a whopping 30 percent.

Nevertheless, MedPAC pushed ahead with its recommendation to Congress to cut 5 percent from home health rates and its sentiment that the supposed 6 percent overpayment under the Patient-Driven Groupings Model be addressed.

Other stats cited in the presentation include:

• In-person home health visits declined 18.6 percent from 10.2 per 30-day period in 2019 to 9.2 in 2020. MedPAC cited fewer in-person therapy visits and newly allowed telehealth visits under the COVID-19 Public Health Emergency as driving factors.
• Accordingly, the pay rate by in-person visit increased, going from $180 per visit in 2019 to $209 per visit in 2020.
• Medicare profit margin climbed to 20.2 percent in 2020, up significantly from 15.8 percent in 2019. Including COVID-related relief funds, the margin was actually 21.9 percent, MedPAC maintains.
• MedPAC expects HHAs’ profit margin to drop back down to 17 percent in 2022. Christman called that 16 percent projected decline “slight” in the meeting.
• The “all-payer” margin for HHAs was 8.1 percent in 2020, or 9.9 percent if PHE relief funds are included.