MedPAC: Home Health Medicare Payments Too High

Medicare payments to home health agencies are too high and don’t necessarily reflect the cost of a typical episode, the Medicare Payment Advisory Commission (MedPAC) reiterated at a meeting last week.

The home health prospective payment system includes the number of therapy visits provided in an episode as a payment factor, and providing more visits significantly increases payments, MedPAC stated in a presentation. MedPAC advises Congress on Medicare policy and is viewed as an influential panel of experts, although lawmakers are not obliged to follow its recommendations. The panel has consistently argued that home health payments could be reduced without limiting access to services.

Further, MedPAC argues that episodes receiving additional payments for therapy account for an increasing share of total episodes. MedPAC also pointed to several other issues when it comes to Medicare in the home health setting, including geographic variations in Medicare utilization, poorly defined benefits and a history of program integrity issues.


MedPAC went on to outline the home health market as a whole, noting in particular that the number of agencies has increased 65% since 2004 but that Medicare expenditures for home health decreased by 1.6% between 2013 and 2014.

In the past, MedPAC recommended a copay for episodes not preceded by a hospitalization and an expansion of efforts to reduce fraud, waste and abuse, according to the presentation.

MedPAC’s next meeting is scheduled to occur between Jan. 14-15 in Washington, D.C. The commission accepts public comments on the matters discussed via its webpage.


Written by Kourtney Liepelt

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