WSJ: Home Health Care “Front and Center” for Medicare Cuts, Analysts Say

In the wake of the Supreme Court ruling on the constitutionality of the Affordable Care Act, the shares of some home healthcare providers “slumped,” says a Wall Street Journal article, due to concerns over the regulatory and reimbursement hurdles the sector will face. 

Rules kept in place with the law, analysts said, further challenge companies already grappling with reductions in the payments for services they receive from Medicare, the U.S. health program for the elderly and disabled.

“With the Supreme Court’s decision leaving the bulk of reform in place, home health companies cannot expect to get relief from the nearly crushing pressure on volumes from the face-to-face and therapy assessment portions of that law,” CRT Capital analyst Sheryl Skolnick wrote in a note to clients.

The industry has been in a state of upheaval as it wades through uncertainty surrounding reimbursement rates. While Thursday’s ruling delivers some clarity, the industry now looks to an impending proposal from the Centers for Medicare and Medicaid Services that could cut rates further for home health providers.

The industry is expected to contend with some near-term challenges now that the healthcare reform law has been upheld, says the article, but the ACA will also expand access to healthcare—and the home healthy industry’s position as a less-expensive form of care compared to hospitals and nursing homes should give investors encouragement for the long-term, according to investors.

“The industry is still front and center for cuts … but, bottom line, more people are going to be on the rolls in the long term,” Oppenheimer analyst Michael Wiederhorn said in the article.

Read the full piece at the Wall Street Journal

Written by Alyssa Gerace

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