Home Health & Hospice Week
IRS RAISES MILEAGE RATE TO 58.5 CENTS
Home care workers drove 4.8 billion miles in 2006, and each of those miles is now costing home health agencies and their workers a lot more.
Based on record-high gas prices, the Internal Revenue Service has raised its standard mileage rate to 58.5 cents per mile for the rest of 2008. That's up from the current 50.5 cents. The new rate will take effect July 1.
"Given the increase in [fuel] prices, the IRS is adjusting the standard mileage rates to better reflect the real cost of operating an automobile," IRS Commissioner Doug Shulman says in a release. "We want the reimbursement rate to be fair."
The sharp rise in the IRS rate will hand many home health agencies a big dilemma--whether to reimburse employees at that rate.
As of June 23, the average national price for gas was $4.08, according to the federal Energy Information Administration. That's up more than a dollar a gallon from last year.
The West Coast region has the highest average price at $4.46 per gallon while the Gulf Coast region has the lowest with $3.92, the EIA reports.
Missouri has the lowest state rate at $3.76 on average, according to gas price Web site gasbuddy. com. California has the highest at $4.63.
Rural areas suffering: A day after the IRS announcement, the National Association for Home Care & Hospice issued a new study on fuel costs and its impact on home care access.
"Home health agencies located in rural areas ... experience higher costs across-the-board and especially when it comes to fuel," notes the study which examined 2006 cost report data and results from a survey of 1,200 participants. The impact on rural HHAs and their patients can be devastating.
For example: While the number of HHAs nationwide has gone up in the last 10 years, the number of agencies in Montana has dropped from 65 in 1996 to 36 today, NAHC points out. Twenty-nine of the state's counties don't have an HHA.
The study urges law- and policy-makers to reinstate the 5 percent add-on for rural patients, which got dropped from a bill just passed by the House. It also urges retraction of administrative cuts facing agencies and hospices in the coming years--a nearly 25 percent reduction for alleged PPS upcoding for HHAs and a hospice cut for wage index adjustments.
Hardest hit: Home care workers in Texas drove the most in 2006, logging 589 million miles, according to the study. The state with the least miles was Wyoming with 2.3 million miles.
Note: The IRS rate announcement is at www.irs.gov/pub/irs-drop/a-08-63.pdf.
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