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Expect 14.4 percent profit margin for 2018.<\/em><\/strong><\/span><\/p>\n Home health agencies would see cuts on top of cuts, if Congress heeds an influential advisory body.<\/p>\n As it voted in meetings earlier this year, the\u00a0Medicare Payment Advisory Commission\u00a0<\/strong>urges lawmakers to cut home health agencies\u2019 Medicare payment rates by 5 percent in 2019. And MedPAC wants Congress to rebase Home Health Prospective Payment System rates in 2020 and 2021 to boot, according to its annual report released March 15.<\/p>\n Why?<\/span>\u00a0<\/strong>\u201cMedicare has always overpaid for home health services under the PPS,\u201d MedPAC maintains in its report advising Congress on Medicare payment. \u201cIn 2001, the first year of the PPS, average Medicare margins for freestanding HHAs equaled 23 percent,\u201d the commission says. \u201cThe high margins in the first year suggest that the PPS established a base rate well in excess of costs.\u201d<\/p>\n HHAs cut visits so drastically under PPS that they \u201cwere able to garner extremely high average payments relative to the cost of services provided,\u201d MedPAC continues.<\/p>\n The 5 percent reduction and rebasing would strip up to $2 billion from 2019 payments and up to $10 billion over five years, MedPAC calculates.<\/p>\n MedPAC has some budget-neutral recommendations that would impact certain agencies more than others, as well.<\/p>\n For instance:<\/span>\u00a0<\/strong>The commission would like to see the\u00a0Centers for Medicare & Medicaid Services\u00a0<\/strong>target its rural add-on to low utilization areas. In 2016, most payments were made in areas with higher than average utilization. For example, \u201c79 percent of the episodes that received the add-on payments in 2016 were in rural counties with utilization higher than the median for all counties,\u201d the report notes. \u201cRural counties in the lowest fifth of utilization accounted for just 5 percent of the episodes that received the rural add-on payment.\u201d<\/p>\n MedPAC concludes that \u201chigher payments in areas without access problems can encourage the entry or expanded operations of agencies that seek to exploit Medicare\u2019s financial incentives. More targeted approaches that limit rural add-on payments to areas with access problems should be pursued.\u201d<\/p>\n Reminder:<\/span>\u00a0<\/strong>The Bipartisan Budget Act of 2018 did reinstate the rural add-on, but phases it out over five years. The budget deal also reallocates the add-on payments to counties with lower population densities, but doesn\u2019t account for utilization directly.<\/p>\n Another budget-neutral suggestion is eliminating therapy from the PPS calculation, but Congress took care of that already in BBA 18.<\/p>\n Profit Margins Fuel Rate Cut Recs<\/strong><\/span><\/p>\n As usual, MedPAC bases its pay cut recommendations in part on HHAs\u2019 high profit margin figures \u2014 an average of 15.5 percent in 2016 for freestanding agencies only. The commission predicts a 14.4 percent margin for freestanding HHAs in 2018.<\/p>\n MedPAC also points to high utilization figures, even though those stats are on the decline (see box, p. 90<\/em>). Figures are still at historic highs even though they are going down, the report insists.<\/p>\n \u201cThis rate cut recommendation does not come as a surprise to the\u00a0National Association for Home Care and Hospice<\/strong>, since MedPAC has previously called for payment rate cuts to home health care,\u201d the trade group notes in its member newsletter. So far, Congress has mostly ignored the calls for rate cuts, including last year\u2019s suggestion to reduce rates by 5 percent.<\/p>\n \u201cNAHC remains opposed to the MedPAC recommendation of home health payment rate cuts and we will urge members of Congress to reject policies that would deny the home health benefit to the vast majority of Americans who say they want to age at home and in their own communities,\u201d the trade group says.<\/p>\n Note: See the report\u2019s chapter on home health at\u00a0www.medpac.gov\/docs\/default-source\/reports\/mar18_medpac_ch9_sec.pdf<\/a>.<\/em><\/p>\n Source- SuperCoder<\/span><\/i><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"