Why There’s Now A ‘Good Expectation’ That Home Health Medicare Cuts Will Be Mitigated

Home health providers have been hearing about the bipartisan support they have in Washington, D.C., for a long time. But last week, they were able to see it in a way that they hadn’t been able to before.

That’s at least the case for those that live streamed – or attended in person – the Senate Finance Committee’s Subcommittee on Health Care’s Sept. 19 hearing on home health care.

Sen. Ron Wyden (D-OR) – the chair of the Senate Finance Committee – remarked that the country “can’t afford not to” invest in home health care. Sen. Ben Cardin (D-MA) – the chair of the subcommittee on health care – said that “reimbursement challenges have added to the challenges for people being able to get the home health care they need.” Sen. Steve Daines (R-MT) said that lawmakers needed to be “certain that patients are able to receive the right care, at the right time, in the right setting, with appropriate payment.”

The hearing could not have come at a better time. The final home health payment rule from the Centers for Medicare & Medicaid Services (CMS) is due in just over a month. The agency’s CY2024 home health proposed rule again included cuts.

Since the June proposed rule, home health provider leaders and advocates have been fighting hard against those cuts.

It was evident at the hearing that their voices are being heard.

“We are hearing from our providers in Tennessee, and there’s a tremendous amount of concern about the payment policy,” Sen. Marsha Blackburn (R-TN) said during the hearing. “It is creating some instability and uncertainty. … I have visited with many who have looked at how next year’s payment rates were proposed in June, and how it would make matters worse for these patients.”

Home health providers have experienced regulatory ups and downs for as long as they’ve been in business. But that’s especially been the case over the last two years.

Since the CY2023 proposed rule, there’s never been more positive momentum in Washington, D.C., for providers than there is right now.

I talked to two of the top advocate voices – National Association for Home Care & Hospice (NAHC) President William A. Dombi and Partnership for Quality Home Healthcare CEO Joanne Cunningham – this week to dive deeper into that momentum.

This exclusive, members-only HHCN+ Update is about how near-term home health payment expectations have taken a turn for the better.

‘An emotional high’

Dombi was one of the witnesses at the hearing. During a nearly 7-minute testimony, he laid out the issues that most home health providers are currently facing. 

Those included reimbursement challenges caused by both CMS and Medicare Advantage (MA) plans, extreme staffing shortfalls and the referral rejection rates that have skyrocketed as a result of both of those issues.

“Home health spending today is virtually the same as it was in 1997, despite 24 years of cost inflation,” Dombi said during the hearing. “In 1997, the Congressional Budget Office estimated that 10 years later $40 billion per year would be spent on home health services. It’s still under $17 billion per year. It’s a telltale that we cannot continue to see happening. In comparison, inpatient hospital spending rose from $80 billion to $130 billion, while skilled nursing facility care – what home health is trying to avoid – rose from $11 billion to $27.2 billion.”

A week later, he joined me on an episode of HHCN+ Talks, which will be released next week.

Dombi called the home health industry’s struggles “obvious and ominous” during the hearing. But afterward, he was met with a positive “emotional high” – a rare feeling for a home health advocate these days.

“I left that hearing on an emotional high,” he told me. “It really increased my respect for the senators, in terms of the level of awareness and understanding they had already on home health services, and the values that they’ve seen from them, both on a personal level as well as on the professional side of things.”

While lawmakers have regularly showed support for home health care, the past few weeks have felt different.

They were not only well educated on home health services and the struggles providers face, but they also seemed to be squarely in agreement with the advocates during the hearing.

“It was just a really good discussion,” Cunningham told me on an episode of HHCN’s Disrupt podcast, which is set to be released this week. “The best part about it was just how brightly it shined a light into how important care in the home is, and, in particular, how the Medicare home health program is such a lifeline for for older Americans. … The hearing was just a great showcase of just how important that is.”

The Preserving Access to Home Health Act of 2023 has already been introduced in the Senate and the House. It would block CMS’ home health cuts, while also forcing the Medicare Payment Advisory Commission (MedPAC) to take a more holistic view of home health providers’ financials – including MA payments to paint a fuller, better picture of overall margins.

NAHC has also filed a lawsuit against CMS over the home health cuts.

Advocacy, legislation and litigious action has been the three-pronged approach.

The hearing seemed to merge the advocacy and legislative approaches. And while the statements during it were great, deliberate action after the fact is what providers are waiting for.

Having the Preserving Access to Home Health Act pass would be ideal, Dombi said, but could be a heavy lift for lawmakers to get done by year end.

“So, in addition, we’re getting members of Congress to connect with the CMS administrator, the HHS secretary and the White House to say, ‘Look, we may not be able to get done what we’d like to with some reforms in home health, but you can help us by putting a pause on these 2024 rate cuts,’” he said.

It’s not always easy to get a projection on what may happen in the future, especially when it comes to CMS and home health payments.

But Dombi, who “never has been accused of being a Pollyannaish,” according to him, is feeling more confident than he may have been a month ago. 

“I’m not trying to put on a phony face of positivity here,” he said. “But I think, seriously, that there is a good expectation for mitigation of the cuts. It’s pedal to the metal, though, from our end of it relative to pushing on the advocacy side to try to see that happen.”

Cunningham, on the other hand, has likely been accused of being an optimist more than once in her life. But she is in alignment.

“You know, I’m always optimistic,” she said. “I talked to a lot of policymakers on the Hill, and I think there’s a lot of support for home health care. There’s an understanding of how important it is. And it does make me more hopeful.”