William A. Dombi, President of the National Association for Home Care & Hospice (NAHC), led the defense of the home health industry at a hearing of the U.S. Senate Finance Committee Subcommittee on Health Care on September 19, telling lawmakers that proposed cuts to the home health payment rate by the Centers for Medicare & Medicaid Services (CMS) will threaten access for millions of Americans. (Click here to read Dombi's statement.)

“I’m really tired of talking about payment policy and payment rates but it’s still essential to do so,” Dombi told the subcommittee, carefully explaining how the home health proposed rule would cut payment rates by a permanent 5.653% in 2024.

“Combine that with the fact that there was a forecasting error in the inflation rate that led to rate changes for home health agencies, a shortage of 5.2% for the years ‘21 and ‘22 when, particularly, labor costs rose significantly,” said Dombi. “That’s now baked in permanently into the payment rate. So that 5% shortfall will continue ad infinitum.”

In response to claims that the proposed cuts are justified by large Medicare payment margins, as alleged by the Medicare Payment Advisory Commission (MedPAC), Dombi pointed out that such margins are deceptive at best.

“It is overall financial margins that really measure financial stability, not the incomplete analysis presented by MedPAC. Medicare margins — to the extent they exist — are subsidizing other payers like Medicaid and Medicare Advantage.”

Dombi concluded by urging the Senate to adopt the Preserving Access to Home Health Care Act, which would stop the proposed home health cuts and also compel MedPAC to take a more holistic view of the margins in the industry. (Click here to urge your members of Congress to pass the legislation. It takes only a few clicks of your mouse to send a message.)

Joining Dombi on the witness panel was Carrie Edwards, RN, director of home care services for Mary Lanning Healthcare, a hospital-based NAHC member, in rural Hastings, Nebraska.

She told the subcommittee her agency would have to close if the proposed cuts make it to a final rule. Her company’s home health division once serviced a 13-county, 60-mile area, but in March, it had to reduce its service area to a 40-mile radius due to home health cuts. In May, it had to reduce its service area to a 25-mile radius, leaving some counties without coverage from another provider.

This year, Mary Lanning Healthcare has declined 50% of its referrals.

“Our average daily census count reduced by more than 60% since the implementation of the new payment model, from an average of 88 patients in 2022 to a census count in September 2023 of 32,” said Edwards. “CMS’ actions are also having a direct impact on our ability to retain our existing workforce. We’ve had three registered nurses resign due to fear that the looming payment cuts being proposed by CMS will force our agency to close.”

Continued Edwards: “If this payment policy goes through with additional reductions I have no doubt that our agency would probably have to close. We’ve already reduced to the bare minimum that we possibly can right now and much further would indicate a closure.”

“We’re doing everything possible to remain operational,” Edwards said. “There are agencies throughout Nebraska and the country that are at serious risk of closure. If I can leave the committee with one takeaway from my testimony today, it’s that CMS and policymakers should be finding every way possible to make increased investments in Medicare home health services, instead of the current path of year-after-year payment cuts that are jeopardizing my agency’s ability to care for Medicare beneficiaries.”

Apart from the proposed home health rule, the panel also discussed rural access problems, hospital-at-home, accountable care, and durable medical equipment. 

Senators, who filled the chamber more than they normally do during a subcommittee hearing, a sign of how seriously they are taking the issue, were overwhelmingly sympathetic to points made by Dombi and Edwards. Notably absent were CMS and MedPAC.

“You can tell by the number of members here and their participation that this is an area of great interest to this committee,” said Senator Ben Cardin (D-MD). “We understand the importance of home health care. And we recognize that we have not achieved the level [of it] that we need for our country, or expect.” Added Cardin: “I would also suggest that the reimbursement structure has added to the challenges for people being able to get the home health care that they need.”

“For the life of me, I can never understand how as we move forward on health care policy,” said long-time home health friend Sen. Debbie Stabenow (D-MI). “One of the proposals is always somehow to cut home health care, even though people want more help at home health care, even though during the pandemic and now afterward, we’re seeing increased needs as a result of this.”

“Mr. Chairman, I will tell you, I think CMS should have been at this table today to talk about this payment policy and about this proposed rule,” Sen. Marsha Blackburn (R-TN) said. “We are hearing from our providers in Tennessee a tremendous amount of concern about the payment policy that CMS put in place in 2020 and how it is creating some instability and uncertainty in the process for these individuals, and I have visited with many who have looked at how next year’s payment rates proposed in June would make matters worse for these patients.”

“I’ve always thought that this was a pretty straightforward proposition,” said Senator Ron Wyden (D-OR), another long-time champion of home health care. “When people ask about the costs of designing home health care services, I always say … you can’t afford to pass up this kind of option — giving people more of what they want at less cost to taxpayers.”

Related News:

• In Wake of Encouraging Senate Hearing, Advocates Keep Pressure on Capitol Hill (McKnight's Home Care, 9/21/23)
• Lawmakers Back Home Health Providers, Condemn Payment Cuts in Symbolic Subcommittee Hearing (Home Health Care News, 9/19/23)
• CMS Proposes 2.2% Decrease to Home Health Provider Medicare Payments in 2024 (Home Health Care News, 6/30/23)