MedPAC Advises Cutting Home Health Payments by 7 Percent, Freezing Hospice Payments in '26

McKnight’s Home Care / By Liza Berger
 
The Medicare Payment Advisory Commission (MedPAC) on Friday issued draft recommendations that entail cutting payments to home health agencies by 7% and freezing hospice payments in 2026. The body, which advises Congress on Medicare payment issues, issued the same recommendations last year.
 
Providers, once again, were not pleased.
 
“The recent recommendations by MedPAC regarding Medicare home health and hospice policy are misguided and deeply troubling,” Steve Landers, MD, CEO of the National Alliance for Care at Home, said in a statement to McKnight’s Home Care Daily Pulse. “Medicare hospice spending has not kept up with labor inflation in the past five years and the typical length of stay and proportion of beneficiaries accessing hospice has stagnated. With respect to home health, the recommendation for drastic cuts is based on a flawed analysis of agency margins that fails to account for all payers and the true financial health of the home health system.”
 
Robust payment adequacy indicators

The commission found the payment adequacy frameworks of home health and hospice healthy in terms of four indicators: beneficiaries’ access to care, quality of care, access to capital and Medicare payment and costs. In his home health report to the body, commission member Evan Christman noted that access is strong despite the steady decline in the share of fee-for-service hospital inpatients discharged to home health — from 20.1% in 2020 to 18.2% in the first 10 months of 2023.
 
“Though home health utilization after discharge has fallen in recent years, it appears that beneficiaries needing post-hospital home health are able to access it at a rate that is actually higher than before the pandemic,” he said.
 
Christman also found that home health had a robust margin of 20.2% in 2023, and the 2025 projected margin is 19%.
 
Typically, MedPAC’s home health recommendations have struck a negative chord with providers, which believe they are being stretched financially with continued cuts from Medicare and that they have to use Medicare funds to subsidize the poor rates of Medicaid and Medicare Advantage. The Centers for Medicare and Medicaid Services continues to include negative permanent behavioral adjustments in its yearly update to account for the switch to the new Patient-Driven Groupings Model payment system.
 
Access to home healthcare was a point of discussion among commission members following the home health presentation…

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DOGE Has a Plan for Medicare, Medicaid. Will it Work?

Politico / By Ben Leonard and Chelsea Cirruzzo

Presented by the Coalition to Strengthen America’s Healthcare
 
UNPACKING DOGE CLAIMS — Biotech entrepreneur Vivek Ramaswamy, co-leader of President-elect Donald Trump’s Department of Government Efficiency, is eyeing Medicare and Medicaid as potential sources to cut federal spending by trillions, Ben reports.
The goal of DOGE — an outside group that will recommend spending and regulation cuts — is a tall task that would likely involve cutting entitlement programs to extract significant savings. Ramaswamy said last week on CNBC that “hundreds of billions of dollars in savings” could come from just “basic program integrity measures” in Medicare, Medicaid and Social Security.

He’s generally in the right ballpark for the numbers. HHS estimated that, in fiscal year 2024, Medicare and Medicaid accounted for about $86 billion in improper payments, and other estimates peg fraud and waste higher annually.
 
But the devil’s in the details. 
 
Jessica Farb, managing director of the Government Accountability Office’s health care team, noted that most of the improper payments in HHS’ estimates are due to insufficient documentation.

“If these documentation errors were corrected, it is very possible that these payments would no longer be considered improper and therefore there would not be any ‘savings’ to the programs,” Farb said, adding that she doesn’t know what estimates Ramaswamy was using. “Improper payment rate is not an estimate of fraud or waste.”

Controlling fraud might be more difficult than Ramaswamy suggests because many before him have pointed to curbing fraud, waste and abuse as a way to control government spending. Experts on health care fraud say there are ways to reduce it.

“Internal controls are extremely important in trying to deter fraudulent activity from occurring, and to be honest, the government has the worst system of any organization,” Patrick Malloy, program coordinator at the University of New Haven’s health care fraud, waste and abuse program, told Pulse.

He suggested the government could follow the private sector by auditing its waste control processes annually and reporting on their findings. Fraud in private organizations is generally about 5 percent of revenues, he said, compared with up to 15 percent in government.

Still, others are more skeptical that Ramaswamy’s vision could be achieved…

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Home-Based Care Providers, Advocates React To Passage Of Elizabeth Dole Act

Home Health Care News / By Audrie Martin
 
On Dec. 13, the U.S. Senate unanimously approved an amended version of the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act. This landmark legislation includes various measures to make home care more accessible to veterans. The bill is now awaiting President Biden’s signature to become law.

For almost two years, the Elizabeth Dole Foundation has worked with a coalition of organizations to promote this bipartisan package of legislation.

“Our leaders in Congress have shown that America can still come together to support those who have served our nation and their families,” Elizabeth Dole Foundation CEO Steve Schwab said in a statement. “This bill was not only passed with broad bipartisan support, but it is also the most comprehensive veterans’ legislation this Congress has passed. It includes significant, far-reaching benefits and reforms that will be transformative for the wider veterans’ community and essential in helping our nation’s military and veteran caregivers succeed.”

The Foundation ensured that caregivers and their families were prioritized in the legislation, which includes more than 90 sections addressing issues such as long-term care, mental health resources, education, job training and modernization of the Department of Veteran’s Affairs (VA). The Elizabeth Dole Home Care Act, a bill within the larger package, will allow severely ill and aging veterans to recover at home by increasing their caregivers’ access to support services…

 …In addition to comprehensive updates focusing on mental and behavioral health support, education and training programs, and benefit reforms, the act includes essential long-term care provisions that would establish a pilot program through the VA to offer assisted living options for aging and disabled veterans.

Currently, the VA can only allocate 65% of the cost of providing nursing home care to a veteran on home- and community-based care. This bill permits the VA to increase spending on this type of care.

The bill would require the Undersecretary of Health to review each program administered by the Office of Geriatric and Extended Care and the Caregiver Support Program Office to ensure consistency in program management, eliminate service gaps at medical centers and ensure proper coordination…

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Home Health Visits, Admissions Fall Nationwide, Industry Report Finds

McKnights Home Care / By Adam Healy
 
Medicare beneficiaries face declining access to home health services, and those who live in rural areas have it the worst, according to a report by market intelligence firm Trella Health.

Approximately 94% of United States counties experienced either a decrease or no change in the number of home health agencies treating 10 or more patients in 2024, the report said. The same year, 83% of counties saw a decrease in the number of home health admissions and 87% saw a decrease in the number of home health visits provided to Medicare fee-for-service beneficiaries. These decreases suggest a broader trend: Between 2017 and 2023, home health visits per patient day dropped more than 17%.
 
Rural realities

Rural counties are typically worse off when it comes to home health access, according to Trella Health. Roughly half of US counties have five or fewer home health agencies serving 10 or more patients per 1,000 square miles, according to the report. In contrast, urban areas such as Manhattan, NY, are home to hundreds of home health agencies per 1,000 square miles, it said.

Meanwhile, the nation’s population of older adults is increasing rapidly, which will further strain home health providers’ ability to deliver care to patients.

“Our analysis of Medicare fee-for-service claims indicates a concerning trend: decreasing accessibility to skilled home health care at a time when we are experiencing the largest growth in the Medicare population,” Carter Bakkum, senior data analyst at Trella, said Monday in a statement. “This report underscores the urgent need for healthcare leaders to address these disparities and ensure that Medicare beneficiaries receive the care they need.”
 
Access factors

Growing consolidation in the home care market, as well as stubborn recruitment and retention issues facing providers, may be contributing to patients’ access issues, the report said. Trella Health noted that increasingly inaccessible home healthcare can negatively affect beneficiaries’ health outcomes and care satisfaction. The report’s authors urged home care stakeholders to work together to improve access to care.

“Declines in agency presence, admissions, utilization and visits, combined with urban-rural disparities, highlight the need for targeted interventions to ensure equitable access to high-quality care for all beneficiaries,” the report said. “Stakeholders must collaborate to address these challenges, prioritizing policies and practices that support accessibility and sustainability in home health care delivery.”

The report comes on the heels of a meeting of the Medicare Payment Advisory Commission, which found that home health patient access has declined since 2020 but still remains strong. The health of the sector led MedPAC to recommend a cut of 7% to home health’s base payment rate.