Volume 24.06
The Medicare Payment Advisory Commission (“MedPAC”) in its March 2025 Report to Congress has again recommended that the 2026 payment rates for home health agencies should reflect a seven percent (7%) reduction to the 2025 Medicare base payment rate.
Interesting items included on the MedPAC report include:
“The number of HHAs participating in the Medicare program increased by 3.4 percent in 2023. However, this increase was due almost entirely to growth in the number of HHAs in Los Angeles County, California. Excluding this county, the number of participating HHAs declined by 2.8 percent.”
“The number of 30-day periods per FFS Medicare beneficiary declined by 1.8 percent in 2023. This decline was driven by a decrease in the use of home health care after acute care hospital discharge, which increased in 2020 and then began to decline, although it remained higher in 2023 than in pre-pandemic years.”
“Due to anomalies related to cost allocation on the home health cost report, we were unable to compute the FFS Medicare marginal profit for 2023.”
“The total number of FFS Medicare beneficiaries using home health care and the total number of 30- day periods continued to decline in 2023, falling 4.4 percent and 3.9 percent, respectively. Much of the decline in FFS volume has been driven by a reduction in the number of beneficiaries in FFS Medicare, as a growing share of beneficiaries enroll in MA.”
“From 2019 to 2023, the total number of in-person home health visits delivered to FFS beneficiaries declined by 9.7 percent per year, on average. While some of this decline is due to lower rates of home health care use, another factor is the declining provision of in-person visits per full 30-day period.”
“In 2023, there were 1.7 fewer visits per full 30-day period, or 16.7 percent fewer, relative to 2019.”
“In 2023, the Medicare FFS margin for freestanding HHAs was 20.2 percent in aggregate, down from 22.1 percent in 2022. FFS Medicare margins varied across providers but were positive for most HHAs. As noted earlier, HHAs’ FFS Medicare margins have averaged 17.1 percent from 2001 to 2022.”
According to MedPAC, “FFS Medicare’s payments for home health services are too high, and the excess payments diminish the service’s value as a substitute for more costly services. FFS Medicare has overpaid for home health care since the inception of prospective payment in 2000, and these overpayments create higher expenditures for the beneficiary and the Medicare.”
The entire MedPAC report can be viewed here.
All home health agencies are encouraged to be familiar with the report. The Home Health Chapter begins on page 225.
NATIONAL ALLIANCE FOR CARE AT HOME 2025 FINANCIAL SUMMIT
The 2025 National Alliance for Care at Home Financial Summit is scheduled for July 27-29, 2025, in Chicago. Information regarding the program, including registration and housing, is available here.
The Health Group, LLC will be exhibiting at this event. Please visit us at Booth #617. Don’t hesitate to contact us prior to the event to arrange to meet with us in Chicago.