The double-digit Medicare profit margins of skilled nursing facilities and home health agencies came under fire from three directions June 14, indicating program payments to the sectors could be cut, perhaps to help pay for a Medicare physician pay fix.  

At a House Ways and Means Health Subcommittee hearing on Medicare post-acute care, CMS Acting Principal Deputy Administrator Jonathan Blum said the agency is concerned about the high margins of the sector, saying they are too high and do not necessarily translate into better care.  

Medicare Payment Advisory Committee Executive Director Mark E. Miller told the panel that Medicare profit margins will be 12 percent for home health agencies in 2013 and up to 14 percent for nursing homes. MedPAC is recommending that payments to the providers be reduced.  

In his opening statement at the hearing, subcommittee ranking minority member Jim McDermott (D-Wash.) also expressed concern about high Medicare profit margins for nursing homes and home health agencies, saying “billions of dollars” in savings could be realized by refiguring payments to the sectors. McDermott said the savings could be used to help pay for a Medicare physician pay fix.