Several home health providers are imploring the Biden administration to reverse a more than 4% cut to home health payments, saying it could blunt investment interest in the market.
Comments on the Home Health Prospective Payment Rate proposed rule say that the Centers for Medicare & Medicaid Services (CMS) is harming an area that has surged in popularity since the COVID-19 pandemic and lowers overall costs to Medicare. Overall, the agency will cut payments by $810 million in 2023 compared to the current year.
“What is particularly disheartening about the proposed rule is home health is one of the least costly settings and is often the preferred settings for patients, and yet Medicare is choosing this moment [to] disinvest in it, when others are choosing to double in home-based care,” wrote the hospital system Mass General Brigham in comments.
The health system said that the pay cuts could lead to a reduction in certain services and increase length of stays in hospitals due to a lack of access.
The home health provider Northern Light Health Home Care said CMS doesn’t fully account for the significant costs that have increased since the COVID-19 pandemic.
For instance, the Maine-based provider said that temporary nursing costs are “nine times higher in this fiscal year than they were last year—an overall added expense of $1.15 million,” the provider wrote. “Overall cost per visit has risen by 6.2 percent including the escalating cost of supplies.”
Northern Light said the pay cut would lead to a nearly 7% decline in Medicare reimbursements for 2023, a hit that “cannot be absorbed within our cost structure.”
Other providers have had to shut down due to reimbursement and staffing concerns.
The Home Healthcare Association of Hawaii wrote that last October the rural Ohana Home Health had to shut down “due to reimbursement and workforce difficulties.”
“Cuts, especially as steep as the ones proposed, would threaten patient access to home health, especially in rural areas where patients already face tremendous barriers in accessing the high-quality care that they need,” the association said.
The cuts could also harm home health agencies’ ability to compete for nursing staff.
“With indications that the current rate of refused admissions due to staff shortages at 35 to 40%, the depletion of revenues will only exacerbate the difficulties that [home health agencies] face in recruiting and retraining staff when other healthcare sectors are often competing for the same staff with greater resources available,” wrote the National Association for Home Care & Hospice (NAHC) in comments.
Staff isn't the only obstacle home health agencies are facing, as the rise in gas prices harms workers that have to frequently travel, the association said.
"NAHC has conducted studies in the past on the number of miles traveled to provide care to the 12 million people that annually receive some form of health care at home," the group wrote. "Our most recent analysis calculated an estimated 7.8 billion miles travelled each year to provide care."
Providers also wanted CMS to divulge more details on the reason behind the cuts.
“CMS did not share the methodology and data it used to determine this reduction, leaving providers without any basis from which to understand the logic behind the reductions,” Mass General wrote.
The proposed payment cut comes as the healthcare industry wants to expand efforts to shift care to the home setting. The pandemic greatly expanded the use of telehealth thanks to new flexibilities for reimbursement, including for hospital at home programs that employ remote monitoring.