President Donald Trump has opened the door to possible Medicare cuts, an alarming scenario for U.S. home health providers already facing a major reimbursement overhaul and increased compliance pressure from federal watchdogs.
Speaking during an interview with CNBC while attending the World Economic Forum in Davos, Switzerland, Trump suggested that he would consider cuts to Medicare and other entitlement programs during his second term. That mindset is a stark shift from his 2016 presidential campaign platform, which promised to protect Medicare and Social Security.
“At the right time, we will take a look at that,” Trump told CNBC. “You know, that’s actually the easiest of all things, if you look.”
Trump did not elaborate on what parts of Medicare his administration would theoretically target for spending cuts.
After multiple newsrooms covered his comments, a White House spokesperson told The Washington Post in a statement that the president is not actively pursuing benefit cuts, but that the administration would continue to seek ways to curb fraud, waste and abuse throughout government programs.
“President Trump is keeping his commitment to the most vulnerable Americans especially those who depend on Medicare and Social Security,” the statement noted.
Medicare spending reached $750.2 billion in 2018, according to the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. The Congressional Budget Office (CBO) projects Medicare spending to hit $1.3 trillion in 2029, accounting for 18.3% of the entire federal budget.
The spending rate on home health services is projected to surpass all other care categories moving forward, partly due to Medicare-beneficiary preferences and partly due to a rise in complex, chronic conditions. U.S. expenditures on home health care are estimated at $108.8 billion for 2018 and projected to hit an estimated $186.8 billion by 2027.
The president said recent economic growth could make it easier to cut government spending on Medicare and other entitlements.
“Well, we’re going — we’re going to look,” Trump said. “We also have assets that we’ve never had. I mean, we’ve never had growth like this.”
At this point in time, just the specter of Medicare cuts is likely enough to encourage home health providers to write to their members of Congress, many of whom are actually strong advocates of home health care. Under the Patient-Driven Groupings Model (PDGM), providers already face a possible 4.36% assumption-based behavioral adjustment.
“What CMS is doing is making an assumption that is very unfair,” Sen. Susan Collins (R-Maine) previously told Home Health Care News. “It’s making an assumption that most home health care providers are being overpaid. I just don’t believe that is the case.”
Meanwhile, the Medicare Payment Advisory Commission (MedPAC) is urging Congress to reduce the calendar year 2020 Medicare base payment rate for home health agencies by a whopping 7%.
The average home health agency gets about 55% of its funding from Medicare, according to MedPAC.
CMS’s final home health payment rule for 2020 released in October increased Medicare payments by an estimated 1.3% — or about $250 million. The increase reflected a 1.5% update required by the Bipartisan Budget Act of 2018, in addition to a mandated 0.2% decrease to rural add-on payments.
