MedPAC’s Miss on Reality of Home Health Financial Reality Results in Suggested Cut in 2025 Proposed Rule

MarketScale

The March 2024 MedPAC report recommending a 7% payment reduction for home health agencies in 2025 has sparked significant concern within the industry. Why is this recommendation being met with such resistance, and what does the financial reality of home health agencies look like in contrast to these federal suggestions?

Are the MedPAC recommendations truly reflective of the financial state of home health agencies, and what are the broader implications for these essential services?

The latest episode of What the Home Health dives deep into the discrepancies between MedPAC’s report and the actual financial conditions faced by home health agencies. Hosted by Matthew Mulski, the discussion features Kalon Mitchell, an expert in healthcare IT and consulting. Kalon Mitchell leverages his extensive background in healthcare technology and business intelligence to shed light on these critical issues.
The two discuss…

Financial Discrepancies:

• Kalon Mitchell explains how cost report data divides into Medicare, Medicare Advantage, and Medicaid, highlighting that 52% of patients are Medicare Advantage but only contribute 36% of revenue.
• The discussion reveals why Medicare Advantage payments are significantly lower than traditional Medicare and the resulting impact on home health agencies.

MedPAC’s Assessment:

• MedPAC’s focus on Home Health Medicare margins alone is misleading. Kalon’s findings suggest that when considering all payer margins, home health agencies, on average, face negative profit margins, unlike hospitals.

Implications and Recommendations:

• Understanding the risks of MedPAC’s recommendations, the need for CMS and MedPAC to adopt an all-payer revenue approach for home health agencies is discussed.
• The importance of CMS increasing base payment rates to ensure the viability of home health agencies is emphasized.

Kalon Mitchell, the owner of Kalon BI Consulting, has a long history in Healthcare IT. He developed the first commercially available DRG grouper in 1985 and founded MedTranDirect in 1986, which created some of the first electronic billing software in the country. After selling his company to WellSky in 2018, Kalon has continued to work on developing business intelligence tools and researching regulatory issues in post-acute care.

Fewer Hospitalized Medicare Beneficiaries Are Receiving Recommended Home Health Care

Commonwealth Fund | By Marie Steele-Adjognon, Clarence Kelley, Lane Koenig
 
In 2022, more than 2.71 million hospitalized Medicare patients (21%) — both traditional Medicare and Medicare Advantage beneficiaries — received a referral for home health care. But research suggests many did not receive their needed care. Data from 2016 show that only 54 percent of hospitalized Medicare beneficiaries referred for home health care received it. Low fulfillment rates for home health referrals can lead to patients being readmitted to the hospital and sometimes death. In this blog post, we look at how many hospitalized Medicare patients received home health care, even when referred for it, and how those rates differ across beneficiaries’ gender, race, dual eligibility status, and geography.
 
Fewer Hospitalized Beneficiaries Referred to Home Health Receive Services
 
Overall home health referral fulfillment rates decreased from 66 percent to 59 percent between 2016 and 2022. This trend was observed before and during the COVID-19 public health emergency and occurred across all racial and ethnic groups. The overall decrease was largely driven by the significant decline (7.2 percentage points) in the rate for white beneficiaries. We observed racial and ethnic disparities in fulfillment rates over that period, although they narrowed slightly. Beneficiaries dually enrolled in Medicare and Medicaid had lower rates of home health referral fulfillment compared to those not dually enrolled. (All differences reported above were statistically significant at the 5 percent level.)
 
Geographic Disparities in Home Health Fulfillment Rates
 
We classified Medicare beneficiaries’ residence on an urban–rural spectrum. Home health referral fulfillment rates were 2 percentage points lower in rural areas compared to large metropolitan areas and 3 percentage points lower compared to medium-sized metropolitan areas in 2016, which were statistically significant at the 5 percent level. However, fulfillment rates fell most among beneficiaries in large metropolitan areas between 2016 and 2022 (7.3 percentage points). As a result, the discrepancy in home health fulfillment rates between large metropolitan areas and rural areas decreased.
 
Using the Robert Graham Center Social Deprivation Index (SDI), we divided counties into three groups. The SDI is a geographic composite measure of demographic characteristics (poverty; education achievement; single-parent households; rented, overcrowded housing; car ownership; and employment) used to quantify the socioeconomic variation in health outcomes across the United States. The first group represents counties with the least deprivation and the last represents those with the greatest deprivation. We observe lower home health referral fulfillment rates in beneficiary counties with higher social deprivation, likely because home health requires social and in-home support, which may be more lacking in deprived areas. This pattern remained consistent across years, as home health referral fulfillment rates fell similarly across groups. We then examined fulfillment rates by racial and ethnic groups within SDI groups. Black beneficiaries had the lowest home health fulfillment rate within all three groups, followed by Hispanic beneficiaries. Among Hispanic beneficiaries, the rate of home health referral fulfillment varies greatly across SDI groups — a 3.3 percentage-point difference between the least deprivation and the midrange and a 9.1 percentage-point difference between the least deprivation and the most…

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US Spending on Home Care Lags Behind Comparable Countries, Report Finds

McKnight’s Home Care | By Adam Healy

In nearly every healthcare sector, the US outspends comparable countries by a significant margin. However, long-term care, which includes home- and community-based services, is the only segment in which peer nations beat the US in health spending, according to a new report by KFF and the Peterson Center on Healthcare.
 
KFF and the Peterson Center compared US healthcare spending in 2021 with that of Austria, Belgium, Canada, France, Germany, the Netherlands, Sweden, Switzerland and the United Kingdom. They found that US spending on inpatient care, outpatient care, preventive services and prescription drugs far outpaced that of the other countries, while its spending on long-term care services fell short.
 
These comparable countries, on average, spent $1,301 per person on long-term care services like nursing home and home- and community-based services. Meanwhile, the US spent only $924 per person. While US spending on long-term care declined 4.9% between 2020 and 2021, it increased by 4.3%, on average, in comparable countries.
 
In total, the US spends $12,197 per person each year on healthcare, whereas the other countries spend only $6,514. The greatest share of domestic health spending is on inpatient and outpatient care; the US spent $7,500 per person in this segment, which is more than twice as much as the comparable nations.
 
And though the US spends more on healthcare than peer nations, American patients generally experience worse outcomes, the report noted. US patients are less likely to see a doctor, have a long hospital stay or be able to make a medical appointment quickly, according to the report. There are also fewer physicians per capita in the US compared with comparable countries, which can reduce some patients’ access to care.
 
However, the Centers for Medicare & Medicaid Services expects long-term care spending to increase in the coming years. In a June report, CMS projected home health spending to grow by 7.1% between 2025 and 2026.

Injuries That Can Keep Olympians from the Gold

MedicalXpress | By Carole Tanzer Miller

U.S. gymnast Simone Biles vowed to continue her quest for Olympic gold after injuring her calf in a qualifying round at the Paris games.

Meanwhile, a thigh injury forced French soccer captain Wendie Renardout out of competition in a loss to Canada.

And the L.A. Clippers' Kawhi Leonard was forced to sit out the games entirely due to inflammation in his right knee, which was injured twice before.

While Olympic athletes can make their sports look effortless, constant overuse of muscles and tendons can lead to big-time injuries that do more than cost them a medal, according to an orthopedic expert from Baylor College of Medicine. And the risks run through all sports—from gymnastics and distance running to swimming.

Biles' comeback after withdrawing from the 2020 Tokyo games has been a major focus of U.S. fans during the 2024 games. She's competing in four events—vault, floor, beam and all-around.

"Gymnasts are subjected to tremendous physical demands, and the repetitive nature of their trainings and performances increase the risk of injuries throughout the body," said Dr. Jet Liu, an assistant professor of orthopedic surgery at Baylor in Houston, who detailed the most common injuries in popular Olympic sports.

For gymnasts, knee sprains, strains and torn ACL ligaments can result from high-impact jumps, flips and dismounts, he said. Ankle injuries are a common consequence of landings and dismounts, while wrist strains, fractures and pains often result from weight-bearing handstands and cartwheels.

Liu said gymnasts might also experience rotator cuff injuries from high-impact landings and repetitive overhead movements from swinging on the bars.

"Proper technique, conditioning and preventive measures are essential to minimize these risks and ensure the longevity of their careers," he said.

Basketball is a high-impact sport in which ankle and foot injuries are common, Liu said. When ligaments supporting the ankle stretch too much or tear, typically during sudden shifts or bad landings, sprains result.

Jumping and quick sprints can lead to ruptured Achilles tendons. Knee injuries—including a ruptured ACL or torn miniscus—often require surgery. Overuse and repetitive stress from jumping can lead to a form of tendonitis often called jumper's knee. Shoulder dislocations are rare but a very real risk…

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