What Home Health Providers May Change Due To Final Rule

Now that the final payment rule for the home health care industry is officially out, providers and advocates will take the long-awaited next step.

For advocates, that will mean continuing legislation efforts. Although the final rule includes a 0.7% aggregate payment bump for home health agencies, behavioral adjustment cuts are still being implemented. That’s a phased-in approach that the Centers for Medicare & Medicaid Services (CMS) would like to continue in coming years. 

“We now turn to Congress to correct what CMS has done and prevent the impending harm to the 3.2 million highly vulnerable home health patients that depend on this essential Medicare benefit annually,” National Association for Home Care & Hospice (NAHC) President William A. Dombi said in a statement shared with Home Health Care News Monday. “Even with the limited phase-in of the rate cut, with significantly rising costs for staff, transportation, and more, home health agencies across the country cannot withstand the impact of rate cuts.”


Advocacy groups and providers don’t want shrinking margins at all, whether they’re phased in or not.

“The overarching issue – not just with my organization, but as I look at the industry – is that we need a margin to be able to reinvest in the infrastructure within our own organizations,” Androscoggin Home Health Care + Hospice CEO Ken Albert told HHCN last week at NAHC’s annual conference in St. Louis.

The Maine-based Androscoggin is a nonprofit operator that employs over 500 workers across all 16 counties in the state.


There will still be margin pressures due to the final rule – and final rules for future years – if the Preserving Access to Home Health Act does not gain any more traction in Washington, D.C. That piece of legislation would curb any cuts to home health reimbursement until 2026.

And if the the margins are not there, less investment in other service lines is almost a certainty. But what may actually tick up is investment in technology in order to increase efficiency in certain areas.

“The more the margins decrease, the infrastructure – including our own personnel, including the human resource component of what we do – is going to be challenged,” Albert said. “I believe that technology may be a solution in some areas, if you’re looking at a quick opportunity to manage costs. You’re going to look at the necessity and the return on the investment in technology.”

At the same time, technology may be pulled back in some very specific areas too. For instance, telehealth – which Androscoggin has been providing for 25 or so years – may not be at the top of its priority list for every patient moving forward with reduced rates. 

“We’ve relied upon a margin in order to be able to invest in technologies like telehealth,” Albert said. “So, do we look at a retraction, or look at reducing the extent to which we’re providing remote patient monitoring to very specific, targeted contractual relationships with health systems, or certain patient populations that we’re paid to case manage? Yeah, likely.”

Some providers also believe they will have to reevaluate how they interact with Medicare Advantage (MA) plans.

Traditionally, fee-for-service Medicare has been the best payment source for home health agencies. Without it being as steady of a source of income as it has been in the past, taking sub-par rates from any other payers will become less feasible. 

“We would also have to figure out how we relate to Medicare Advantage, and to manage Medicaid programs,” VNA Health Group President and CEO Dr. Steve Landers told HHCN at the NAHC event. “Because in a lot of instances, we’ve depended on the traditional Medicare program for the vibrancy of our companies. If the rule is finalized the way it is, we’d have to even further reevaluate how we are relating to these other types of payers. Because that has to become more sustainable.”

The Holmdel, New Jersey-based VNA Health Group is a nonprofit provider of home-based health services in New Jersey and Ohio.

In that vein, Amedisys Inc. (Nasdaq: AMED) touted its new MA deal with CVS Health’s (NYSE: CVS) Aetna during its earnings call Thursday, urging other plans to “take note.”

“We are in active discussion with other plans for similar contracts or other value-based models,” Amedisys CEO Chris Gerard said. “The remaining plans that have been unwilling to engage in models like this should take note. In a world where clinical capacity is at a premium, we will not work with payers who fail to see the value that we deliver and the quality outcomes we provide for their members.”

On VNA Health Group’s end, Landers also noted that the way providers manage episodes of care would have to be reconsidered.

“We’re all going to have to potentially evaluate how we manage episodes of care,” he said. “I really hope it doesn’t go down that road, but I could see a response to the payment shrinking being that just less care is provided during these episodes, which is not really good for the public. But I could see that being the way that agencies deal with the lower reimbursement.”

While the final rule could be viewed as bad or good news, depending on each provider’s perspective, it will still force them to consider where they spend their time, money and resources during the rest of this year and the next one.

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