Home health and hospice providers slammed the Medicare Payment Advisory Commission (MedPAC) Friday for playing Grinch in its recommendations to cut base payment rates for both home health and hospice agencies in calendar year 2024.
The commission’s draft recommendation to the Centers for Medicare & Medicaid Services would cut the home health base rate by 7% and the hospice aggregate by 20%.
National Association for Home Care & Hospice President and CEO William Dombi blasted MedPAC for using antiquated methodology for assessing what is needed to deliver care today, especially in home health.
“Beyond the need to correct its ongoing failure to account for all costs of care and its exclusion of an essential sector of home health agencies, MedPAC needs to recognize that home health agencies operate in an interdependent economic model that includes traditional Medicare, Medicare Advantage, and Medicaid,” Dombi told McKnight’s Home Care Daily Pulse in an email. “We call on MedPAC to account for ongoing CMS-sanctioned losses in Medicare Advantage and Medicaid that must be incorporated into its analysis on care access.”
MedPAC commission members unanimously supported the 7% rate cut to home health partly due to industry profit margins that neared 25% in 2021. The proposed rate cut would reduce overall margins to about 17%.
“I am just going to be very blunt: a 24.9% Medicare margin is obscene,” MedPAC Commissioner David Grabowski said during the panel’s Friday morning meeting.” I think a 7% cut is very much warranted. This will not harm beneficiary quality or access.”
Meanwhile, MedPAC has been unsuccessfully calling for the 20% aggregate cut to hospice every year since 2020. Although the commission noted that hospice margins were likely to decline from 14.2% in 2020 to 8% in 2023 due to increased inflation, it noted the number of providers continues to grow and access to capital remains strong.
Some commissioners also said they favored a possible redesign of the Medicare benefit to include palliative care. Commissioner Betty Rambur said the hospice benefit relies heavily on “overtreating patients at the end of life” and wanted CMS to design a benefit for the “new world of dying.”
The 17-member MedPAC is a nonpartisan agency that provides Congress with analysis and advice on the Medicare program. Earlier this year, MedPAC advised CMS to cut Medicare home health rates by 5% and the hospice aggregate by 20% for 2023. In June, CMS proposed a 4.2% rate cut to home health for next year, but reversed course in October by increasing the rate to 0.7%. CMS increased hospice rates 3.8% for 2023.
