MedPAC Recommends 5% Home Health Cut in Final Report to Congress

After recommending a 5% cut to home health payments, the Medicare Payment Advisory Commission (MedPAC) submitted its final report to Congress for the Medicare Payment Policy for 2018.

The 17-member commission, which is tasked with recommending rate adjustments for the Medicare fee-for-service payment system to Congress, has long-stated that home health care payments are too high, and has recommended a number of cuts over the years. The recommendation submitted on March 15, 2017, includes a 5% cut to home health and inpatient rehabilitation services rate adjustments for 2018.

Legislators often don’t undertake these recommendations for rate adjustments, and they are not required to follow them. Home health payments in 2017 were cut 0.7% overall.


Home health care groups have vehemently opposed cuts to home health care rates, with some in the industry calling out the way MedPAC calculates home health care margins. Some have argued that MedPAC’s methods don’t tell the whole story and potentially show inflated margins to base their payment adjustments.

The commission estimates that the savings of the 2018 recommendations, if implemented, would be “substantial”—a reduction in FFS spending of more than $30 billion over 10 years, according to the report.

The commission also recent recommended that the new prospective payment system (PPS) for post-acute care be implemented sooner than its current trajectory. The new PPS aims to adjust the current payment system to avoid identified issues, including eliminating “the use of the number of therapy visits as a factor in payment determinations,” according to the report.


Written by Amy Baxter

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