Home Health To Congress: Work Pay Cut Delays Into Health Package

Inside Health Policy

February 4, 2024 10:03 am

Home health providers are scrambling as they push Congress to pass a bill that would alleviate some of the pay cuts the home health sector has taken, and the advocates are eying any upcoming packages as a possible place to attach the bill. The bill would also require Congress’ Medicare payment advisors to be more transparent when they calculate home health financials and stability.


Stakeholders, including the Partnership for Quality Home Healthcare and the National Association for Home Care and Hospice, are pushing lawmakers to pass the Preserving Access to Home Health Services Act, which has garnered a bipartisan set of 44 cosponsors and is sponsored by Sens. Debbie Stabenow (D-MI) and Susan Collins (R-ME) along with Reps. Terri Sewell (D-AL) and Adrian Smith (R-NE).


The legislation would prevent a series of cuts tied to the Patient-Driven Groupings Model from kicking in and would “require [Medicare Payment Advisory Commission] to be more transparent in its calculations about home health financial data and the stability of the sector,” a release from Stabenow’s office says.


Congress’ Medicare payment advisors say the sector has consistently finished with high margins, but lobbyists argue that the MedPAC’s methodology is flawed and doesn’t account for a broader environmental scope.

PQHH’s CEO Joanne Cunningham along with NACHC President Bill Dombi told Inside Health Policy they’re looking at any and all opportunities to tie the legislation to a major package, either to the health package expected before the continuing resolution expires in early March or to a future omnibus down the line.

They’re also vying for any offsets they could use for the bill, which doesn’t have a formal Congressional Budget Office score. Cunningham said it could ring in at around $3.4 billion based on CMS’ estimates in the final home health pay rule.

“Obviously they’re trying to put together some sort of a package of extenders and other pieces for the action around Mar. 8, and we’re trying to find ourselves on that,” Dombi said. “We did not succeed getting in on the early go-round the first [continuing resolution] that came out, but then, the doctors didn’t get there either. So a lot of parties struggling to find themselves there. It’s one of those 11th-hour efforts that happen every day . . . So we’ve got both the short-term advocacy effort going on to try to get into that March 8 action, but also long-term if we can’t get in there.”

The offsets will likely need to come from within the home health program, Cunningham said, but she added that home health stakeholders are also eyeing offsets from the Medicare and Medicaid improvement funds — though she acknowledged that most sectors are also on the hunt for those dollars.

Home health proponents have raised concerns about a series of policies and recommendations that have hamstrung the sector in recent months. Advocates say those policies are contributing to an ongoing decline in the number of home health agencies in operation and the number of patients able to access those services.

Most recently, MedPAC commissioners in mid-January voted to recommend reducing home health pay after they finished 2022 with a 22.2% Medicare margin — down from 25% in 2021 — and an 8% all-payer margin, according to MedPAC staffers.

Home health stakeholders immediately slammed the recommendation.

In a brief on MedPAC’s recommendations, PQHH argues that MedPAC only analyzed Medicare fee-for-service margins, which PQHH says is only a fraction of patients that home health agencies treat.

“This limited scope ignores the fact that Medicare Advantage (MA) plans generally pay significantly less than FFS, and state Medicaid programs pay even less than that. Taken together, overall home health margins are significantly lower than the incomplete picture MedPAC painted today,” PQHH says. “Without positive Medicare FFS payments, home health agencies would simply not be viable, as those payments are used to cover the shortfalls in other public programs, including MA and Medicaid.”

PQHH also argues that MedPAC’s data quality is poor and that its methodology is opaque, undermining recommendations based on that foundation.

CMS also finalized a set of payments to home health agencies in 2024 that will increase in the aggregate by 0.8%, or $140 million, compared to 2023. But providers raised concerns that the final 0.8% pay bump includes an estimated 2.89% cut from the permanent adjustment tied to the PDGM.

CMS had originally proposed a 2.2% cut, comprised of a 2.7% proposed home health payment update plus a 5.1% cut from the PDGM and a 0.2% increase from an update to the fixed-dollar loss ratio, but the agency tweaked the rule after it received a high volume of stakeholder comments.

“We have a Centers for Medicare and Medicaid that has, you know, every single year, especially recently with this new payment model, that’s taking actions that are making the program smaller — you can look at the data and it’s black and white,” Cunningham said. “The total spend of the Medicare home health program is going down. The number of beneficiaries that have access to it are going down.”

Dombi agreed with Cunningham, noting home health agencies are having to turn away a majority of their referrals because of a lack of resources. —Bridget Early (bearly@iwpnews.com)