Projected Home Health Margin Declines Echoing Nationwide

Data released last week by the Home Care Association of Florida and the Partnership for Quality Home Healthcare revealed home health margins are projected for a steep decline in the coming years, however, the Sunshine State only appears to be just one part of a national epidemic.

Yesterday, The New Mexico Association for Home & Hospice Care released data demonstrating that the rebasing of Medicare home health payments within the proposed Home Health Prospective Payment System (HHPPS) rule for 2014 will negatively affect the state’s home health sector.

Under a “best case scenario,” New Mexico’s Medicare home health margin will fall to 2.3% by 2017, according to margin calculating methodology used by the Medicare Payment Advisory Commission (MedPAC).

The decline is due to the impact of an estimated $72.5 billion in Medicare home health payment cuts, which is equivalent to a 22% reduction made since 2009 as a result of legislative and regulatory changes.

Under the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) is directed to rebase home health payments between 2014 and 2017 by a percentage deemed appropriate by the Secretary.

With this percentage to be implemented in equal increments each year from 2014-2017, the current trajectory of Medicare home health reimbursement is now on track to produce negative margins in 10 states by 2017—even if home health payments are not subjected to further legislative and regulatory reductions.

“Home healthcare is a valuable and clinically-effective healthcare service to the seniors of New Mexico, who will be put at risk if home healthcare is subjected to more Medicare funding cuts,” said Joie Glenn of The New Mexico Association for Home & Hospice Care.

Across New Mexico, 71 home health agencies that serve the state’s 16,611 Medicare beneficiaries will be impacted by the implementation of CMS’s home health payment rebasing efforts.

Additionally, other reports have revealed similar impacts resulting from the proposed payment rebasing, notably in Minnesota, where the state’s 31,668 Medicare beneficiaries stand to be affected by projected home health margin declines.

Written by Jason Oliva