Has Face-to-Face Rule, Overregulation Stalled Home Health Growth?

While hiring trends and other indicators have given rise to the idea that home health is rapidly expanding, utilization of these services actually has leveled off on a national basis and is highly variable from state to state, new data reveal.

Home health utilization did increase substantially between 2003 and 2013, going from less than 8% of all Medicare fee-for-service enrollees to more than 10%, according to recently released data from market research firm Healthcare Market Resources. However, that growth almost all occurred before 2010.

“The industry has been buffeted by winds from various directions which likely has impacted utilization,” a Healthcare Market Resources’ blog post on the findings states.


Among the constraining factors are increased regulatory requirements, such as the requirement that home health patients have a face-to-face encounter with a physician to be certified for care. On the other hand, growth has been encouraged by Affordable Care Act policies that incentivize hospitals to work more closely with home health providers to reduce readmissions.

These winds have been blowing differently in various parts of the country, the data suggest. As of 2013, many low-utilization states were located in the Midwest, indicating a high potential for organic growth in this region, according to Healthcare Market Resources. Southern and New England states tended to have utilization that was higher than the national average by as much as 30%.

For boosting growth going forward, partnerships with hospitals and Accountable Care Organizations could be an especially important strategy, the results suggest. These acute care providers and health systems are seeking ways to keep their readmission rates low, so home health agencies that can help them achieve this goal could see increased referrals.


While the Healthcare Market Resources analysis indicates a slowdown in the utilization rate, demographic trends could be fueling a surge in demand for private-pay home care, according to a recent report on franchises in that sector.

Written by Tim Mullaney

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