MedPAC Draws Fire with Draft Recommendations for Massive Home Health Cut, Hospice Rate Freeze

McKnight’s Home Care | By Adam Healy
 
The Medicare Payment Advisory Commission offered initial recommendations for Congress to cut home health reimbursement by 7% and pause hospice payment updates in 2025. 
 
“The 2022 [home health] margins remain above 20%, higher than the long-run average of 16.8% since 2001,” Evan Christman, senior analyst at MedPAC, said during last Friday’s public meeting, according to a transcript. “Overall, these margins indicate that Medicare fee-for-service continues to pay well in excess of cost.”
 
Part of the reason home health agencies reportedly saw margins of 22.2%, on average, according to Christman, is a decline in the number of visits per 30-day period. Since the implementation of the Patient-Driven Groupings Model in 2020, these visits have declined more than 15%; between 2021 and 2022, visits per 30 days declined 3.5%. 
Home health advocates were quick to dispute MedPAC’s claims.
 
“There are many shortfalls in MedPAC’s home health margins report — starting with the fact that MedPAC’s analysis only captures a declining fraction of the Medicare home health population, ignoring that overall margins are low,” Joanne Cunningham, chief executive officer of the Partnership for Quality Home Healthcare, said in a statement. “Additionally, relying on incomplete, poor-quality data and an opaque methodology runs the risk of dangerously misleading policymakers who rely on MedPAC to inform their decisions.”
 
The Partnership and National Association for Home Care & Hospice cited poor methodology and data in the recent home health final rule, which contained a Medicare cut related to PDGM. 
 
MedPAC: No hospice payment update
 
MedPAC also recommended that Congress eliminate any payment updates for hospice providers in 2025. The hospice program, according to MedPAC principal policy analyst Kim Neuman, shows signs that its current payment rates are sufficient to sustain quality and growth.
“Indicators of payment adequacy are favorable,” Neuman said. “The supply of providers continues to grow. The share of decedents using hospice, the number of hospice users and total days of care increased. Length of stay also increased. In-person visits per week increased slightly, and marginal profit was 17%.”…

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