Industry Warns of Unintended Impact of Home Health Cuts

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By Mike Stankiewicz

A looming Medicare pay cut of nearly a billion dollars for home health services will drive beneficiaries into more expensive care settings, resulting in even higher costs to the program, industry groups warn.

“If these cuts go through, many patients will lose access to critical services in their home and will be forced to move into more expensive nursing homes,” William Dombi, president of the National Association for Home Care and Hospice (NAHC) in Washington, told Bloomberg Law Oct. 31. “This will end up costing Medicare more money in general, so if they’re looking to save the program money, this definitely isn’t the way.” Dombi is a Bloomberg Law advisory board member.

Dombi’s comments come in response to a Centers for Medicare & Medicaid Services proposed rule on home health payment policies for 2018 and later. The CMS is likely to release a final version within the next week.

The proposal included drastic changes to how and when Medicare would pay for home health services. Medicare currently pays for up to 60-day episodes of care, but the CMS is proposing to use a 30-day unit in 2019. The change could result in $950 million in cuts to home health services for that year.

The changes would affect the more than 10,000 Medicare-participating home health agencies in the U.S. These companies include Kindred Healthcare Inc. and HealthSouth Corp.

Reasoning and Unintended Costs

The agency said the average length of an episode of care was 47 days, and roughly a quarter of all 60 day episodes lasted 30 days or less. CMS Administrator Seema Verma said the new payment system would be more responsive to patients’ needs and would improve patient outcomes.

Joy Cameron, vice president of policy and innovation at the Visiting Nurse Associations of America in Arlington, Va., agreed with Dombi that the proposal will not save the agency money and will hurt home health providers. While under the prospective payment system for HHAs, eligible beneficiaries may receive benefits for several episodes, but with a 30-day episode, HHAs will have to reauthorize services—and face potential denials—more often.

“If you take this much money out of the market, you are going to have fewer providers,” she told Bloomberg Law Oct. 31. “It’ll be impossible for agencies, some of which have zero margins, to stay open, and those patients will have to find care in more costly nursing homes.”

Home health services typically cost less than nursing home care because they don’t require around-the-clock supervision and patients are treated in their own homes.

Congressional Action

Congressional lawmakers and home health groups are full speed ahead in trying to stop the rule from being finalized.

Home health companies, including Kindred, Amedisys, and ElevatingHOME, have offered changes to a bill, introduced in early October to the House Ways and Means Committee, that would slow down the proposed changes. The bill would keep the home health reforms, including the new 30 day episodes, but push back implementation until 2020.

“With something this huge and devastating, you are going to pull every lever you can to try and stop it,” Cameron said. Ways and Means did not respond to Bloomberg Law’s request for comment.

The bill and its proposed changes by the industry come after a letter from Sen. Orrin Hatch (R-Utah) saying Medicare is moving too quickly in making changes to home health agency payments. Hatch chairs the Finance Committee, which has authority over Medicare.

“If anything should have some sort of impact on CMS’s decision to pull this rule, it’s Hatch’s letter,” Dombi said. “His letter gets into the weeds of the problems with this bill and that’s a rarity from him.” Similar letters have been sent by other senators and House members.

To contact the reporter on this story: Mike Stankiewicz in Washington at

To contact the editor responsible for this story: Brian Broderick at

For More Information

The proposed rule is at

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