Home Health Cuts Would be Worse Than CMS Expects, Says SBA

Last week the U.S. Small Business Administration’s Office of Advocacy sent a letter to the Centers for Medicare & Medicaid Services (CMS) requesting more evidence to back up the agency’s estimate for the impact of its proposed rule to adjust the home health prospective payment system.

CMS published a proposed rule on July 3, 2013 that would update, adjust, and rebase home health reimbursement rates and would result in a 14% cut to Medicare home health payments. Home health trade groups have been advocating against the proposed rule, citing a greater negative impact than CMS estimations predict, and now the SBA is echoing those concerns.  

“Advocacy is concerned that CMS has certified that the rule will not have a significant economic impact on a substantial number of small entities without providing a factual basis for the certification as is required by the Regulatory Flexibility Act,” says Winslow Sargeant, Ph.D., Chief Counsel for the Office of Advocacy, in the Sept. 10 letter to CMS administrator Marilyn Tavenner.


Data indicates that more than 90% of all home health agencies in the U.S. fall beneath the SBA’s small business size standard for the home health care sector. 

“We applaud the Small Business Administration for examining the proposed rule and calling attention to the need to more fully assess the impact of these cuts on smaller HHAs,” said Eric Berger, CEO of the Partnership for Quality Home Healthcare, in a statement. “Like the SBA, we strongly urge CMS to complete a more detailed assessment of the proposed rule over all four years in which rebasing will take place to ensure the proposed cuts do not force small businesses to close their doors on the patients they serve and the jobs they support.”

The letter also outlines concerns regarding the methodologies and assumptions CMS used in its economic analysis and recommends that CMS improve its small entity imp at analysis as it drafts the Final Regulatory Flexibility Analysis for the final rule.


“Advocacy believes that the transparency of this rule would be increased if CMS refined the RFA analysis that lead the agency to certify no impact,” the letter continues. “…Advocacy suggests that CMS’ certification would be buttressed if the agency provided an improved explanation for its conclusion that the proposed rule would not have a significant impact on a substantial number of small entities.”

Read the letter. 

Written by Alyssa Gerace

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