The Medicare Advantage (MA) final rule for 2025 released this week offered what all stakeholders agree is an underwhelming update. Its implications, by contrast, might have an overwhelming impact on home care providers.

The reason why is that MA already pays home care providers poorly — a fraction of what fee-for-service Medicare pays. This update just gives MA plans another excuse to underpay home care providers, experts told McKnight’s Home Care Daily Pulse.

“It’s not good for those providers when there really are no very clear enforceable standards on what a fair payment rate would be,” William Dombi, president of the National Association for Home Care & Hospice, said. “This is becoming close to a crisis level of concern because the [MA] enrollments continue to rise and the margins in the traditional Medicare program continue to deteriorate.”

Noted Mollie Gurian, vice president of home-based and HCBS policy at LeadingAge, “When the plans think that they are not getting the money that they need, that downward pressure will trickle down.”

And the plans certainly are not happy.

“Clearly, the MA community has gone ballistic about it,” Dombi said.

On its face, the update appears to be an improvement. The Centers for Medicare & Medicaid Services touted it as a 3.7% increase. However, the update includes a hidden 0.16% reduction in the benchmark rate. It is this cut that has providers and plans reeling.

In terms of recourse for inadequate MA payments, home care providers have limited options, Dombi said. They can elect not to be in-network with certain MA plans or they can refuse to take patients in certain plans’ networks. The latter is fair game, he said. 

“Even in-network, they don’t have to accept all referrals in the plan,” he explained. “Most plans’ contracts do not require a ‘take all referrals’ standard. Home health has a superseding responsibility that you only take patients you can safely and effectively provide care to.”

It may be legitimate, but it’s not a choice an ethical home care provider wants to make.

CMS math

In somewhat related news, home care providers, can expect a similarly vexing rate calculation when the home health proposed rule comes out sometime this summer. If you’ll recall, the 2024 home health final rule included a net 0.8% increase but a devastating -2.890% permanent behavioral assumption adjustment.

Dombi is bracing for a further permanent adjustment reduction and an increase in the temporary adjustment, which could be billions, in the upcoming home health proposed rule. The proposed rule, in fact, may be so strikingly similar to last year’s that he advised one journalist to just change last year’s headline.

Hardly a sign of progress.

Liza Berger is editor of McKnight’s Home Care. Email her at [email protected].