In its recent annual meeting, the Medicare Payment Advisory Commission (MedPAC) unanimously supported a 7% reduction in Medicare's 2024 base payment rate for home health agencies. The recommendation was made despite the fact that several commissioners highlighted the critical role played by home health care during the COVID-19 pandemic and the role it will continue to play in the future.

Based on its assessment of Medicare fee-for-service (FFS) home health care payment adequacy and potential updates, the commission found that freestanding home health agencies had an average Medicare profit margin of 24.9%.

There were several interesting data points discussed during the meeting, including: 

• Medicare FFS spending on home health services totaled $16.9 billion.
• Over 11,400 home health providers hold Medicare certification.
• 3 million Medicare beneficiaries accessed the home health benefit (8.3% of FFS beneficiaries).
• Utilization totaled approximately 9.3 million 30-day periods of care.
• Freestanding home health agencies provided 93% of the periods of care.
• 98% of beneficiaries live in ZIP codes with two or more home health agencies; 88% live in ZIP codes served by five (5) or more home health agencies.
• In-person visits averaged 8.8 per 30-day period.

The commission's recommendation to cut home health payments will be included in its March 2023 report to Congress.

Click here to read the meeting transcript.