MedPAC votes for a 7% Home Health Rate Cut

Following their recommendation which was drafted back in 2022, The Medicare Payment Advisory Commission (MedPAC) unanimously voted to reduce Medicare base payment rate for home health care by 7% for CY 2024. 

One of the intentions for the said reduction is to decrease government spending by $750 million to $2 billion in a span of one year. Consequently, this also means that the home health industry’s profit margin will be reduced to 17% from 24.9%. 

MedPAC Commissioner David Grabowski expressed that “24.9% Medicare margin is obscene”, and further claimed that a 7% cut should not harm beneficiary quality. This was opposed by the National Association for Home Care & Hospice President and CEO Wiliam Dombi who said that MedPAC is still using outdated methodologies to assess what is needed for home health services today. According to Dombi, “A 7% reduction in Medicare payment rates virtually guarantees a loss of care access for all individuals needing home health services.”

What is MedPAC?

The Medicare Payment Advisory Commission, or MedPAC, was established by the Balanced Budget Act of 1997 (P.L. 1050-33). It is an independent agency tasked to provide the us congress with advice and analysis regarding the Medicare program and also provides information on issues affecting Medicare.

Impact on home health providers

While there is still much discourse on how the rate cut will actually affect the quality of service of the home health industry, home health agencies should definitely brace themselves for an expected profit reduction. Agencies can either absorb the reduction outright or make internal adjustments in order to maintain current profit margins. But with patients’ health on the line, any internal adjustments made by home health agencies to mitigate losses should not be at the cost of quality service.

What home health providers can do

Like any other businesses, home health providers can reduce costs by outsourcing eligible administrative tasks. While nurses, doctors, physical therapists, care providers, and other workers in the medical field are profit-generators, back-end roles such as encoders, order processors, and customer service representatives are overhead expenses. Outsourcing these back-end roles can reduce labor costs by up to 90%.

Where to outsource administrative tasks

The Philippines serves as a popular hub for business process outsourcing (BPO). You can learn more about the advantages of outsourcing to the Philippines by checking out one of our articles. Partnering with a reputable BPO provider is key to adapting to economic changes. BPO providers such as Luckwell Solutions offer staffing services specializing in the home health field. The company is headquartered in Hayward California with its outsourced team operating from the Philippines. Luckwell Solutions understands the staffing needs of the home health industry and has highly trained specialists for tasks like patient intake coordination, medical data entry, physician’s order processing, authorization processing, and other related administrative tasks. Luckwell Solutions also offers consultation services for starting enterprises. Speak to one of our representatives to learn how you can partner with Luckwell Solutions today.

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