New Resources Outline Financial Impact of Medicare Home Health Rebasing

The National Association for Home Care & Hospice (NAHC) is partnering with several home health care trade associations to provide resources to industry participants outlining the financial impact of proposed home health rebasing that would cut Medicare reimbursements by 14%. 

NAHC’s Legislative Action Network has teamed up with the Alliance for Home Health Quality and Innovation, the Partnership for Quality Home Healthcare, and the Visiting Nurse Associations of America to produce a series of resources that can help home health care providers make a case against the rebasing cuts, which the Centers for Medicare & Medicaid Services (CMS) proposed in June. 

One resource is a white paper that covers all aspects of the proposed rule along with talking points for meetings with members of Congress, their staffers and the media, along with the projected impact of the rule on each state and in each Congressional district. 

The impact on home health services spending would be a reduction of $290 million in 2014, according to the proposed rule. But the true impact of the rule, if finalized, would be “far greater,” says the white paper, as it would trigger four consecutive years of 3.5% reductions in the primary payment rates adding up to 14%.

“The impact analysis provided by CMS in the proposed rule shows a somewhat disparate impact, in the aggregate, on HHAs depending upon type and geographic location,” says the paper. 

Freestanding home health agencies are estimated to have the greatest negative impact, with a 1.7% year-to-year reduction in Medicare revenue between 2013 and 2014.

Voluntary and non-profit agencies are estimated to experience a 0.8% reduction in revenue. But this data does not indicate the real impact of the proposed rates, argues NAHC, because the CMS analysis doesn’t look at the impact on access to care and is only a one-year impact assessment rather than a full four-year examination of the rebasing action. 

“The focus on payment amounts disregards the impact on HHA financial stability as it ignores that costs will increase in 2014 and later years,” the paper continues. “Rather than a $290 million decrease in spending, it is a $700 million decrease in the amount that would be spent in the absence of the proposed rate rebasing changes.” 

Lastly, the CMS analysis is in the gross aggregate, rather than on a local level where care is provided. Home health agencies currently experience a wide range of financial outcomes with Medicare payments that aren’t reflected when averages are being used, says NAHC.

Check out the white paper, including the state-by-state impact analysis performed by NAHC. 

Written by Alyssa Gerace

Alyssa Gerace

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