The home health industry is facing significant and ongoing Medicare reimbursement reductions. Providers are bracing for further cuts to be announced by the Centers for Medicare & Medicaid Services (CMS) in the upcoming rulemaking. The finalized 7.85% permanent cut in 2022 translates to over $1 billion in annual cuts starting in 2024 and continuing indefinitely. Shockingly, more than half of Medicare-certified home health agencies are projected to operate at a loss, severely impacting patient access to care.

We urgently need Congress to intervene and demand CMS halt these cuts. The anticipated total cuts over the next decade exceed $18 billion, surpassing CMS' initial proposal. CMS finalized these cuts last year despite substantial opposition from patients, providers, and lawmakers. Medicare providers and the patients they serve, including the elderly, disabled, and chronically ill, rely on traditional Medicare fee-for-service (FFS) payments to cover their care costs. Medicare FFS margins offset below-cost home health services payment rates, benefiting Medicare Advantage enrollees and Medicaid beneficiaries. While this system is not ideal, it has ensured that Medicare and Medicaid recipients receive high-quality home health services.

Home health services are overwhelmingly preferred by Medicare beneficiaries, providing vital support to avoid hospitalization and nursing home stays. The immediate impact of recent cuts is already evident, with the Medicare Payment Advisory Commission (MedPAC) estimating a 7% drop in Medicare FFS operating margins, and overall payer margins expected to drop to single-digit lows with just the 2023 cuts in effect. If the anticipated full rate reduction is implemented, the average overall margin will fall below zero, seriously jeopardizing access to home health services, particularly in rural and underserved communities. 

Despite compelling evidence and recommendations from home health leaders, CMS has ignored the flaws in its methodology and is in violation of its statutory authority when justifying these cuts. For two rulemaking cycles, CMS has stubbornly stuck to its approach, causing significant disruption and uncertainty surrounding this vital benefit.

Now is the time for Congress to take action and demand that CMS rescind these additional cuts to home health in 2024. These cuts will threaten 3.2 million Medicare beneficiaries' ability to receive life-saving clinical care in their homes each year. We must prioritize the health and well-being of our elderly, disabled, and chronically ill patients, ensuring they have uninterrupted access to the care they need and deserve.

Fortunately, Congress is taking action with the recent introduction of the Preserving Access to Home Health Act of 2023 (S.2137). This legislation would prevent CMS from implementing the 7.85% reduction in 2024 and from making temporary adjustments (i.e., clawbacks) to services already provided to Medicare patients during the pandemic.

To protect the future viability of the Medicare home health program, the Preserving Access to Home Health Act must be implemented immediately. Click here to send an email to your Senators today urging them to support this critical legislation!