Obama’s 2015 Budget Proposes $98 Billion More of Home Health Cuts

The home health industry is potentially facing up to nearly $200 billion of reimbursement cuts in the next 10 years.

President Obama’s 2015 budget proposal, released Tuesday, contains home health copayments for Medicare beneficiaries along with cuts to post-acute care provider reimbursements for the next decade.

The proposed budget suggests reducing the Market Basket Index updates for post-acute care providers—including home health providers—by 1.1% each year from 2015 to 2024.

Doing so would reduce reimbursements by nearly $98 billion throughout that timeframe, and would come in addition to the 2014 rebasing of home health and home health productivity adjustments that lower payment rates by more than 14% starting in 2015.

“These proposals from the President are essentially repeats from last year’s budget,” said Val Halamandaris, president of the National Association for Home Care & Hospice, in a statement decrying the proposals. “Congress refused to enact these suggestions last year and we hope for the same response to this year’s budget. Medicare reforms should never be funded by making indiscriminate across-the-board cuts to home health care or by shifting costs to our most vulnerable citizens through copays.”

Both the co-payment proposal and reducing the amount reimbursements are adjusted each year for inflation puts essential home health services at risk, he said.

The previously announced rebasing of home health payments will cut Medicare spending on home health services by more than $100 billion in the next 10 years and is expected to result in home health providers receiving reimbursements less than their costs.

More than four in 10 Medicare-licensed home health agencies are projected to be underwater in 2014 as a result of the rebasing, rising to 60% by 2017, Halamandaris said.

“Congress should therefore reject any additional cuts and any home health copay whether the reason is postponement or elimination of scheduled cuts in physician fees or deficit reduction,” he said.

If President Obama’s home health proposals all take effect, they could cumulatively serve to push thousands of providers to the brink of bankruptcy, thereby limiting patients’ access to home care, says the NAHC, and forcing them into care options that may end up costing the federal government more money.

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