Home health next in line for CMS reimbursement cuts

Home health agency stocks shook late last week in response to massive proposed cuts to home health reimbursements. The Centers for Medicare & Medicaid Services (CMS) is calling for a 1.5 percent decrease for 2014, as part of a 3.5 percent annual “rebasing” reduction for 60-day episodes from 2014 through 2017, according to a proposed rule submitted to the Federal Register.

In addition, the proposed rule (CMS-1450-P) calls for adjustments to the per-visit rates and adds new measures for recently hospitalized home health patients and new requirements for quality reporting. Home health agencies will see a financial hit of $290 million because of the payment rate revisions, CMS estimates in the proposed rule.

CMS often creates aggressive proposed rules that are then scaled back after the comment period, analysts told the Wall Street Journal. The final rule is not expected until November 1, but the hefty rate cut in the proposal was enough to crash home care stock prices late last week. Several publicly traded home health companies, including Amedisys, Gentiva and LHC Group, saw stocks plummet by 18-21 percent on Friday, but had recovered approximately half their ground by Monday noon.

Topics: Executive Leadership , Medicare/Medicaid