Home Health & Hospice Week

CMS ignores this pain point at beneficiaries’ peril, commenters warn.

One of the most cited financial pressures for home health agencies is labor, and providers aren’t sure why Medicare officials continue to ignore it.

Providers’ comment letters on the 2024 home health proposed payment rule are full of information about still-soaring staffing costs. “We have seen our labor costs rise at a level that is unprecedented in the North Texas area,” reports Valerie Rivera with Wichita Home Health Service Inc. in her comment letter. “For example, our cost of nursing staff in 2021 and 2022 increased by 15-20 percent over 2020,” Rivera says.

Rates of increase finally easing doesn’t really help much either, Rivera contends. “In 2023, while the cost increase may have slowed, it has done so in the context of the past increases staying in place while reimbursement has not correspondingly increased consistent with our cost increases,” she explains.

Visiting Nurse and Hospice for Vermont and New Hampshire has seen “double digit percentage increases in skilled clinical worker wages and salaries,” spotlights VNH CEO Johanna Beliveau in her letter. Due to the “workforce crisis and shortage,” VNH spent 84 percent of revenue earned on labor, Beliveau says.

And it’s not over. “Wages are rising substantially, must faster than inflation and reimbursements,” says Lauren Reynolds in her comment letter. “At the same time, my area is experiencing a labor shortage due to the high cost of housing, state taxes, etc.”

Medicare officials need to realize that home health staffing is in a very unique position compared to other provider types, emphasize UnityPoint at Home execs Jenn Ofelt, Christy Pinkley, and Cathy Simmons in the health system agency’s letter. “Rate reductions negatively impact the Home Health workforce as cuts do not enable HHAs to attract and retain personnel with competitive compensation and raises,” they explain. “Home Health does not operate in a silo, and when other segments of healthcare or other non-healthcare industries increase wages, Home Health must compete or lose experienced team members from physicians, nurses, therapists, social workers and Home Health aides.”

HHAs have it harder because “Home Health combines a heightened critical thinking skillset with the ability to work independently” and “other care settings do not require after-hours/holiday commitments,” UnityPoint notes.

Bottom line: “For this reason, other care settings are more desirable to workers when Home Health is not able to meet or exceed pay rates. So despite the fact that our Home Health compensation uses the same pay-scale as our inpatient providers, workforce continues to limit our service capacity,” the UnityPoint execs relate.

“Staff burnout is at an all-time high,” warns Kathy Messerli, executive director of the Minnesota Home Care Association, in the trade group’s comment letter. “Clinicians are being asked to see more patients due to the workforce shortage and documentation standards keep increasing each year. This is causing clinicians to work well beyond a normal 8-hour day, and many clinicians are leaving for healthcare industries that can provide a more stable work routine (and most often, higher wages),” Messerli reports.

While skyrocketing labor costs are hurting HHAs, other expenses are packing a wallop too.

“Non-labor costs have also increased far beyond any change in payment rates,” Rivera points out. Auto insurance increased more than 20 percent for her agency and “workers compensation, health and dental insurance, rent and utilities have all increased significantly,” she says.

Office expenses also have climbed, VNH notes.

Medical supply cost increases are hurting agencies too. “The costs of nonroutine supplies (i.e. those outside the episodic payment) have not kept up with inflation,” UnityPoint contends. “As for routine supplies (i.e. those covered in the episodic payment), CMS keeps expanding the list of included supplies without corresponding reimbursement attributable to the episode. HHAs are required to provide more service for less reimbursement,” the Iowa-based agency says.

Providers also remind CMS that gas prices are still a killer for agencies and their staff alike. “Particularly in rural areas, this reimbursement component is crucial,” the UnityPoint execs stress. Visiting staff traversing “two-lane and gravel roads” must serve smaller caseloads, which means “greater operational expense per patient,” they note.

Result: “Wear and tear on vehicles is another cost being absorbed by our personnel or the HHA and, as vehicle prices rise and gas prices skyrocket, mileage reimbursement does not cover costs and is seen as a decrease in wages,” they say.

Exacerbation: “Due to the staffing challenges HHAs are facing, current clinical staff are forced to work outside their usual ‘territory,’” MHCA’s Messerli says. “This means that clinicians are driving farther distances to get to each patient, increasing the mileage workers must be reimbursed for. MHCA members stated this mileage increase, on average, has been close to 15 percent.”