What the Home Health Rule Means For Providers & Patients

Despite the concerns expressed by more than 200 bipartisan Members of Congress, leading senior advocacy organizations, patients, and providers, the Centers for Medicare and Medicaid Services (CMS) chose to cut Medicare home health payments to the fullest extent allowed by the Affordable Care Act. These cuts, at 3.5% per year, total an unprecedented cut to Medicare home health funding of 14% between 2014-2017.

Cuts of this magnitude have never been seen before. CMS itself admits that approximately 40 percent of all home health agencies will experience negative Medicare margins by the time these cuts fully take effect in 2017.

These cuts directly impact homebound seniors in rural and underserved communities who are among the Medicare program’s oldest, sickest, and poorest beneficiaries. Because home healthcare providers care for Medicare’s most vulnerable patients, adequate Medicare funding is especially critical.  In home health – unlike other healthcare sectors – private pay and Medicaid can’t be used to offset Medicare losses. Therefore, net losses in nearly half the nation’s home health agencies will inevitably lead to closures across the country, compromising the care nearly 3.5 million vulnerable seniors depend on to remain in their homes.

While the Final Rule could have devastating consequences for the home health sector, Health and Human Services Secretary Kathleen Sebelius has the authority to revise the rebasing cut to protect seniors’ access to home health.  The Secretary should update the rule because:

• The cut directly targets 3.5 million homebound seniors, who are older, sicker, poorer, and more likely to be a minority than the typical Medicare beneficiary.
• Approximately 40 percent of all home health agencies will experiences negative Medicare margins by the time these cuts fully take effect in 2017.
• Negative Medicare home health margins will lead to closure of provider facilities, therefore limiting beneficiary access to patient-preferred home health.

Without action from the Secretary, access to clinically advanced, cost-effective and patient preferred care is in real danger.