MedPAC Recommends Reducing Medicare Payments to Home Health Agencies

Posted Sunday, March 21, 2021

Last week, the Medicare Payment Advisory Commission (MedPAC) issued their March 2021 Report to Congress recommending a 5% reduction in payments to home health agencies for FY 2022.

The five percent base rate reduction in 2022 would address MedPAC’s belief that most of the overpayments are in Medicare’s rates. Additionally, MedPAC seems to discount the impact the COVID-19 pandemic had on HHAs by stating “Though the public health emergency was a disruption for HHAs, the emergency has not significantly changed the financial outlook or service delivery practices of the industry. “The MedPAC recommendation would decrease federal program spending relative to the expected payment update by $750 million to $2 billion in 2022 and by more than $10 billion over five years.

“Once again, MedPAC’s recommendations on payment rates for home health agencies rely upon antiquated analytics and incomplete data,” NAHC President William A. Dombi, in response to the MedPAC report. “A core responsibility of MedPAC is to evaluate whether rates are sufficient to secure access to care. While the MedPAC analysis posits that the existing payment rates incentivize increases in patient volume, the past 10 years has shown a loss of over 1000 home health agencies, reduced patient admissions, shorter lengths of stay, and fewer visits per episode. This has occurred at a time when home health care is recognized as an essential service with significant capabilities along with a growing Medicare population. The only explanation as to why MedPAC’s assessments do not sync with reality is that its analysis is not well-formulated. Where the outcome that occurs is the opposite of the one forecast, something is fatally flawed in the forecast analysis. Adding to that flaw is the continuing failure to consider data from the entire home health provider community in excluding hospital-based providers and a refusal to consider the full economic effect of the multiple payers of home health care. It is no surprise that Congress has not followed MedPAC’s recommendations in most years.”

Source: NAHC Report

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