New Analysis: Proposed Government Regulation Will Result in Negative Medicare Margins for 59.7% Percent of Indiana’s Home Health Agencies

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In response to changes proposed by the Centers for Medicare and Medicaid Services (CMS) to the home health prospective payment system, the Indiana Association for Home & Hospice Care (IAHHC) today issued warnings that large adjustments to home health payments will have a significant and alarming impact on the financial viability of Indiana’s home health providers.

In response to changes proposed by the Centers for Medicare and Medicaid Services (CMS) to the home health prospective payment system, the Indiana Association for Home & Hospice Care (IAHHC) today issued warnings that large adjustments to home health payments will have a significant and alarming impact on the financial viability of Indiana’s home health providers. According to a new analysis by the National Association for Home Care & Hospice (NAHC), CMS’ proposed policy changes would lead to negative Medicare margins for 59.7 percent of all home health agencies in Indiana. This analysis, based on nearly 7000 financial reports submitted to the Medicare program, was reviewed and validated by the independent health care policy consulting firm, The Moran Company.

The analysis also found that the proposed payment cuts would have a particularly severe impact on rural providers and hospital-based home health agencies. The analysis found that 80.6 percent of rural providers and nearly 84.2 percent of hospital-based agencies will see negative Medicare margins if the CMS-proposed rate adjustments are finalized. To access the full analysis, visit http://www.nahc.org/media/090611_MORAN_HHPPS.pdf.

“Regulators have made assumptions about both patient population and acuity that are not accurate and don’t reflect reality of home health care,” said Todd Stallings, IAHHC Executive Director. “In its zeal to save short term dollars, CMS should take care not to run its most cost-effective providers out of business. Without home health, CMS will pay even more to provide care in facilities”.

CMS has recently proposed substantial payment adjustments that would decrease the base payment rate for home health services by 5.06 percent for 2012. While CMS contends that the adjustment is warranted on the basis that there has been only limited change in patient acuity in past years, IAHHC argues that there is strong evidence showing that patients are sicker than ever and in need of the extensive care that has markedly increased care costs.

Home health care has become increasingly important to millions of Indiana seniors who depend upon it for skilled post-acute care.

IAHHC is the voice of Indiana's home care providers. Our mission is to advance the cause of home care and hospice through leadership, collaboration, advocacy, and education. We represent all of home care: traditional home health nursing services, home-based and inpatient hospice care and non-medical services that allow Hoosiers to remain independent in their own homes. To learn more please visit http://www.iahhc.org.

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