If the Centers for Medicare & Medicaid Services' proposed changes to the Home Health Prospective Payment System go through, more than half of all home health agencies in the United States will face negative Medicare financial margins. This finding comes from an analysis done by the National Association for Home Care & Hospice (NAHC), a home health industry trade group.
In July, CMS proposed a rule that would update the rates of the Home Health Prospective Payment System (HH PPS). The update would decrease the Medicare base payment rate for home health services by 5.06 percent for 2012, which CMS claims would save approximately $640 million that year.
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As part of its submitted comments to CMS on the proposed rule, NAHC provided an analysis based on almost 7,000 financial reports from 2009 CMS data. That anaylsis was independently examined and validated by healthcare policy consulting firm, the Moran Company.
NAHC's analysis found that 52.3 percent of all home health agencies in the United States would face negative Medicare financial margins if the proposed changes are approved. Nearly 81 percent of hospital-based home health agencies and 65.7 percent of rural providers will see negative Medicare margins if the proposed rule is finalized as is.
"In this proposed rule, we have stated that our analysis reveals that nominal case-mix continues to grow under the HH PPS," CMS said in its proposed rule. "Because we have not yet accounted for all of the increase in nominal case-mix, that is case-mix that is not real (real being related to treatment of more resource intense patients), case-mix reductions are necessary. As such, we believe it is appropriate to reduce the HH PPS rates now, so as to move towards more accurate payment for the delivery of home health services."
"Federal regulators have made assumptions regarding our patient population and patient acuity that do not accurately reflect the reality of home healthcare in America," said Andrea Devoti, NAHC board chairwoman in a statement. "As a result, their proposed payment adjustment is dangerously speculative and risks denying Medicare beneficiaries the care they need. The Moran Company validation of the analysis underscores our concerns that large payment adjustments will financially cripple providers across the country, therefore creating serious access challenges to vulnerable seniors and threatening needed healthcare jobs – particularly in rural and underserved areas."
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