Home Health & Hospice Week

As expected, an influential advisory body to Congress has decided to make some very unfavorable recommendations regarding home health agency reimbursement.

In the Medicare Payment Advisory Commission’s Jan. 11 meeting, commissioners voted unanimously to recommend that Congress reduce Medicare payment rates a whopping 7 percent in 2025. That’s despite the fact that the number of agencies, Medicare spending, and number of users all dropped in 2022 (see more details on statistics in HHHW by AAPC, Vol. XXXII, No. 45).

Further, one commissioner suggested that MedPAC staff should look more closely at the dropping number of home health visits in the sector. “I was a little concerned about the decline in the number of visits generally and especially the decline in home health aide visits,” said Commissioner Tamara Konetzka, a Public Health Sciences professor at the University of Chicago. “I would just encourage us to … really continue to monitor the quality,” Konetzka urged in the meeting.

“Efficient care is one thing, but I think the quality and whether beneficiaries are getting what they need out of these home health episodes is really critical to continue monitoring,” Konetzka stressed.

There’s no denying that HHAs’ sky-high Medicare fee for service profit margin played a large part in the recommen­dation decision. The 2022 margin was 22.2 percent and the projected margin for 2024 is 18 percent.

As when MedPAC first voted on the recommendation last month, home health representatives are criticizing the move. “MedPAC once again voted to recommend that Congress reduce home health payment rates” by 7 percent, noted National Association for Home Care & Hospice President William Dombi in a release. “That recommendation is based on an antiquated methodology of assessing whether the rates are sufficient to provide beneficiaries with access to care,” he insisted.

“Given that the current rates are insufficient, the cut recommended … would essentially destroy the primary Medicare benefit that actually saves Medicare expenditures through a reduction in more costly care,” Dombi blasted. “We call on Congress to see the true picture that home health care needs more support rather than less,” he concluded.

Side Trip Into Cost Reporting

Last month, reps denounced the cost reporting system that produced such high profit margins as flawed, misleading, and incomplete, for starters. In the Jan. 11 meeting, one commissioner’s comments did address cost reporting in both home health and hospice.

Commissioner Brian Miller, a physician and professor at Johns Hopkins University, claimed that “I think we overly burden home health agencies, hospices, and other small businesses in their delivery system with cost reporting. In the entire rest of the economy, we figure out how to pay and price for things without having people set detailed data,” Miller said in the portion of the meeting discussing potential cost report requirements for ambulatory surgical centers.

Miller called the cost report “a highly esoteric form that requires a highly paid consultant to do it.” And it increases costs, may discourage entry, and promote exit, he argued.

MedPAC Vice Chair Amol Navathe, a physician with the University of Pennsylvania’s Perelman School of Medicine, called for “being thoughtful about the administrative burden” and a “streamlined way to collect cost data.”

Konetzka advocated for “better cost reports … that are more useful and not burdensome.”

Next: Stay tuned for MedPAC’s March report for more recommendation details.