Home Health & Hospice Week

Profit margin is down — but still too high, MedPAC insists.

Policy- and lawmakers use crucial data provided by the Medicare Payment Advisory Commission to make tough budget decisions. Take a look at the 2022 home health stats MedPAC provides in its latest annual report to Congress:

• Freestanding HHAs’ profit margins reached 22.2 percent, and MedPAC estimates an 18 percent margin for 2024.

That’s down from an eye-popping 24.9 percent in 2021 and compares to a margin of 20.2 percent in 2020, 15.8 percent in 2019, 15.3 percent 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 all-payer profit margin for freestanding HHAs averaged 7.9 percent.
• About 2.8 million fee-for-service Medicare beneficiaries received home health care. That’s down 6.3 percent from 3.0 million in 2021, and down from 3.3 million in 2019.
• Medicare spent $16.1 billion on home health care services. That’s down about 10 percent from 2019.
• In 2022, 11,353 HHAs participated in FFS Medicare, down 1.1 percent from the previous year.
• Over 98 percent of FFS Medicare beneficiaries lived in a ZIP code served by at least two HHAs, and 88 percent lived in a ZIP code served by five or more HHAs.
• The volume of 30-day home health periods declined by 7.5 percent from 2020 to 2022, to 8.6 million.
• The share of beneficiaries using home health care fell 3 percent since 2019, from 8.5 percent to 8.0 percent.
• Other volume indicators that were down from 2019 to 2022 include 30-day periods per 100 FFS Medicare benefi­ciaries (-4.3 percent) and 30-day periods per FFS Medicare beneficiary who received home health care (-1.3 percent).
• Total visits were 69.5 million, down 30 percent from 2019.
• In the last 10 years, freestanding HHAs’ all-payer revenues have increased, but the share of revenues coming from FFS Medicare has declined. In 2013, the average freestanding HHA had total revenue of $3.7 million; the average increased to $4.8 million in 2022. FFS Medicare accounted for 58 percent of the average freestanding HHA’s revenues in 2013, but by 2022 that share had declined to 49 percent.
• Cost per 30-day period increased 4.0 percent for freestanding HHAs. “That’s a reversal of the trend for 2021, when we observed cost per period decline by 2.9 percent,” MedPAC points out.
• The share of home health stays that were initiated in a timely manner was up from 94.6 percent for the year ending in June 2018 to 95.9 percent for the year ending in June 2022.