Multiple home health providers are urging the Biden administration to reverse a cut of over 4% to home health payments. They believe it could discourage investment in the market. There are concerns raised about the proposed rule on Home Health Prospective Payment Rate that the Centers for Medicare & Medicaid Services (CMS) are damaging a sector that has gained popularity during the COVID-19 pandemic and has helped reduce overall costs for Medicare. In comparison to last year, the CMS plans to reduce payments by $810 million in 2023.
In comments submitted, hospital system Mass General Brigham expressed disappointment with the proposed rule. They highlighted that home health is a cost-effective and preferred option for patients. They criticized Medicare for choosing to disinvest in home health at a time when others are focused on home-based care. Mass General Brigham stated that these pay cuts could result in a reduction of services and longer hospital stays due to limited access.
Northern Light Health Home Care, a home health provider, argued that CMS fails to fully consider the significant costs that have increased since the COVID-19 pandemic. They pointed out that temporary nursing costs have increased significantly, along with the overall expenses per visit, including rising supply costs.
Northern Light predicted that the pay cut would lead to almost a 7% decline in Medicare reimbursements for 2023 which would be detrimental and unsustainable for their operations. Other providers have already been forced to close down due to concerns over reimbursement and staffing.
The Home Healthcare Association of Hawaii cited a case where Ohana Home Health had to shut down because of reimbursement and workforce difficulties. They warned that the proposed cuts, particularly such substantial ones, would threaten patient access to home health care, especially in rural areas where barriers to accessing quality care already exist.
Additionally, the cuts could hamper home health agencies’ ability to compete for nursing staff. The National Association for Home Care & Hospice (NAHC) highlighted the current rate of refused admissions that have been due to staff shortages. They stated that the depletion of revenues would worsen the difficulties in recruiting and retaining staff, especially when other healthcare sectors have more resources available.
Aside from staffing concerns, home health agencies face obstacles such as rising gas prices, which negatively affect workers who need to travel frequently to provide care. The NAHC shared their analysis, which estimated that approximately 7.8 billion miles are traveled annually to provide care to the 12 million people receiving home healthcare.
Providers also requested more transparency from CMS regarding the reasoning behind the proposed payment cuts. Mass General Brigham expressed dissatisfaction with CMS for not sharing the methodology and data used to determine the reduction, leaving providers without a clear understanding of the logic behind the cuts.
These proposed payment cuts come at a time when the healthcare industry aims to expand efforts in shifting care to the home setting. The COVID-19 pandemic has significantly increased the use of telehealth such as hospital-at-home programs with remote monitoring, thanks to new reimbursement flexibilities.
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