MedPAC Advises Cutting Home Health Payments by 7 Percent, Freezing Hospice Payments in '26

McKnight’s Home Care / By Liza Berger
 
The Medicare Payment Advisory Commission (MedPAC) on Friday issued draft recommendations that entail cutting payments to home health agencies by 7% and freezing hospice payments in 2026. The body, which advises Congress on Medicare payment issues, issued the same recommendations last year.
 
Providers, once again, were not pleased.
 
“The recent recommendations by MedPAC regarding Medicare home health and hospice policy are misguided and deeply troubling,” Steve Landers, MD, CEO of the National Alliance for Care at Home, said in a statement to McKnight’s Home Care Daily Pulse. “Medicare hospice spending has not kept up with labor inflation in the past five years and the typical length of stay and proportion of beneficiaries accessing hospice has stagnated. With respect to home health, the recommendation for drastic cuts is based on a flawed analysis of agency margins that fails to account for all payers and the true financial health of the home health system.”
 
Robust payment adequacy indicators

The commission found the payment adequacy frameworks of home health and hospice healthy in terms of four indicators: beneficiaries’ access to care, quality of care, access to capital and Medicare payment and costs. In his home health report to the body, commission member Evan Christman noted that access is strong despite the steady decline in the share of fee-for-service hospital inpatients discharged to home health — from 20.1% in 2020 to 18.2% in the first 10 months of 2023.
 
“Though home health utilization after discharge has fallen in recent years, it appears that beneficiaries needing post-hospital home health are able to access it at a rate that is actually higher than before the pandemic,” he said.
 
Christman also found that home health had a robust margin of 20.2% in 2023, and the 2025 projected margin is 19%.
 
Typically, MedPAC’s home health recommendations have struck a negative chord with providers, which believe they are being stretched financially with continued cuts from Medicare and that they have to use Medicare funds to subsidize the poor rates of Medicaid and Medicare Advantage. The Centers for Medicare and Medicaid Services continues to include negative permanent behavioral adjustments in its yearly update to account for the switch to the new Patient-Driven Groupings Model payment system.
 
Access to home healthcare was a point of discussion among commission members following the home health presentation…

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OIG Issues MA Plan Fraud Alert

Alliance Daily

The Office of Inspector General (OIG), U.S. Department of Health and Human Services, has issued a Special Fraud Alert warning about certain marketing schemes involving the Medicare Advantage (MA) program. These schemes involve questionable payments and referrals between Medicare Advantage plans, health care professionals ( HCPs) , and third-party marketers such as agents and brokers.

The Special Fraud Alert focuses on two types of remuneration that have been the subject of recent settlements under the False Claims Act and that implicate the Federal anti-kickback statute: (1) payments from Medicare Advantage Organizations (MAOs) to HCPs or their staff relating to MA plan marketing and enrollment; and (2) payments from HCPs (including payments from corporations that contract with or employ HCPs and payments from management services organizations with which HCPs contract) to agents, brokers, and others in exchange for referring Medicare enrollees to a particular HCP.

One area of risk involves MAOs, directly or indirectly, paying remuneration to HCPs or their staff in exchange for referring patients to the MAOs’ plans. For example, MAOs have provided gift cards or in-kind payments to HCPs and their office staff in exchange for those HCPs or their staff referring or recommending individuals for enrollment in a particular MA plan. In some cases, these tactics have resulted in individuals, sometimes without their consent, being enrolled in an MA plan when they wanted to stay in Original Medicare or another MA plan. Additionally, an MAO may use these payments to HCPs or their staff to selectively target individuals for enrollment that benefits the MAO

A second area of risk involves payments from HCPs to agents and brokers, such as payments from an HCP to agents and brokers to recommend that HCP to a particular MA enrollee or to refer the enrollee to the HCP. In some cases, HCPs make these payments to refer Medicare enrollees to the HCP to become designated as the primary care provider for the enrollee at their particular MA plan, which can carry a substantial financial benefit for the HCP. Enrollees are often unaware of these financial arrangements and may rely on the recommendation of an agent or broker in making HCP selection.

Abusive arrangements involving MAOs, agents, brokers, and HCPs may also lead to criminal, civil, or administrative liability under several Federal laws.

The OIG has developed a list of suspect characteristics related to arrangements involving the types of marketing activities described above. These characteristics, taken together or separately, could suggest that an arrangement presents a heightened risk of fraud and abuse.

• MAOs, agents, brokers, or any other individual or entity offering or paying HCPs or their staff remuneration (such as bonuses or gift cards) in exchange for referring or recommending patients to a particular MAO or MA plan.
  
  
• MAOs, agents, brokers, or any other individual or entity offering or paying HCPs remuneration that is disguised as payment for legitimate services but is actually intended to be payment for the HCPs’ referral of individuals to a particular MA plan.
  
  
• MAOs, agents, brokers, or any other individual or entity offering or paying HCPs or their staff remuneration in exchange for sharing patient information that may be used by the MAOs to market to potential enrollees.
  
  
• MAOs, agents, brokers, or any other individual or entity offering or paying remuneration to HCPs that is contingent upon or varies based on the demographics or health status of individuals enrolled or referred for enrollment in an MA plan.
  
  
• MAOs, agents, brokers, or any other individual or entity offering or paying remuneration to HCPs that varies based on the number of individuals referred for enrollment in an MA plan.
  
  
• HCPs offering or paying remuneration to an agent, broker, or other third party that is contingent upon or varies based on the demographics or health status of individuals enrolled or referred for enrollment in an MA plan.
  
  
• HCPs offering or paying remuneration to an agent, broker, or other third party to recommend that HCP to a Medicare enrollee or refer an enrollee to the HCP.
  
  
• HCPs offering or paying remuneration to an agent, broker, or other third party that varies with the number of individuals referred to the HCP.

These practices, alone or in combination, represent potentially abusive practices that could

implicate various fraud and abuse laws. Additionally, these types of suspect practices could result in various harms to Medicare enrollees and should be scrutinized closely by any parties to such arrangements.

DOGE Has a Plan for Medicare, Medicaid. Will it Work?

Politico / By Ben Leonard and Chelsea Cirruzzo

Presented by the Coalition to Strengthen America’s Healthcare
 
UNPACKING DOGE CLAIMS — Biotech entrepreneur Vivek Ramaswamy, co-leader of President-elect Donald Trump’s Department of Government Efficiency, is eyeing Medicare and Medicaid as potential sources to cut federal spending by trillions, Ben reports.
The goal of DOGE — an outside group that will recommend spending and regulation cuts — is a tall task that would likely involve cutting entitlement programs to extract significant savings. Ramaswamy said last week on CNBC that “hundreds of billions of dollars in savings” could come from just “basic program integrity measures” in Medicare, Medicaid and Social Security.

He’s generally in the right ballpark for the numbers. HHS estimated that, in fiscal year 2024, Medicare and Medicaid accounted for about $86 billion in improper payments, and other estimates peg fraud and waste higher annually.
 
But the devil’s in the details. 
 
Jessica Farb, managing director of the Government Accountability Office’s health care team, noted that most of the improper payments in HHS’ estimates are due to insufficient documentation.

“If these documentation errors were corrected, it is very possible that these payments would no longer be considered improper and therefore there would not be any ‘savings’ to the programs,” Farb said, adding that she doesn’t know what estimates Ramaswamy was using. “Improper payment rate is not an estimate of fraud or waste.”

Controlling fraud might be more difficult than Ramaswamy suggests because many before him have pointed to curbing fraud, waste and abuse as a way to control government spending. Experts on health care fraud say there are ways to reduce it.

“Internal controls are extremely important in trying to deter fraudulent activity from occurring, and to be honest, the government has the worst system of any organization,” Patrick Malloy, program coordinator at the University of New Haven’s health care fraud, waste and abuse program, told Pulse.

He suggested the government could follow the private sector by auditing its waste control processes annually and reporting on their findings. Fraud in private organizations is generally about 5 percent of revenues, he said, compared with up to 15 percent in government.

Still, others are more skeptical that Ramaswamy’s vision could be achieved…

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Home-Based Care Providers, Advocates React To Passage Of Elizabeth Dole Act

Home Health Care News / By Audrie Martin
 
On Dec. 13, the U.S. Senate unanimously approved an amended version of the Senator Elizabeth Dole 21st Century Veterans Healthcare and Benefits Improvement Act. This landmark legislation includes various measures to make home care more accessible to veterans. The bill is now awaiting President Biden’s signature to become law.

For almost two years, the Elizabeth Dole Foundation has worked with a coalition of organizations to promote this bipartisan package of legislation.

“Our leaders in Congress have shown that America can still come together to support those who have served our nation and their families,” Elizabeth Dole Foundation CEO Steve Schwab said in a statement. “This bill was not only passed with broad bipartisan support, but it is also the most comprehensive veterans’ legislation this Congress has passed. It includes significant, far-reaching benefits and reforms that will be transformative for the wider veterans’ community and essential in helping our nation’s military and veteran caregivers succeed.”

The Foundation ensured that caregivers and their families were prioritized in the legislation, which includes more than 90 sections addressing issues such as long-term care, mental health resources, education, job training and modernization of the Department of Veteran’s Affairs (VA). The Elizabeth Dole Home Care Act, a bill within the larger package, will allow severely ill and aging veterans to recover at home by increasing their caregivers’ access to support services…

 …In addition to comprehensive updates focusing on mental and behavioral health support, education and training programs, and benefit reforms, the act includes essential long-term care provisions that would establish a pilot program through the VA to offer assisted living options for aging and disabled veterans.

Currently, the VA can only allocate 65% of the cost of providing nursing home care to a veteran on home- and community-based care. This bill permits the VA to increase spending on this type of care.

The bill would require the Undersecretary of Health to review each program administered by the Office of Geriatric and Extended Care and the Caregiver Support Program Office to ensure consistency in program management, eliminate service gaps at medical centers and ensure proper coordination…

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