President Releases 2013 Budget Includes Medicare & Medicaid Cuts and Home Health Copays

President Releases 2013 Budget Includes Medicare & Medicaid Cuts and Home Health Copays

February 14, 2012 03:12 PM


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Barbara D. Woolley
National Association for Home Care & Hospice
(202) 547-7424

WASHINGTON D.C. (Feb. 14, 2012) – The National Association for Home Care & Hospice (NAHC) strongly opposes the Administration’s proposed home health copayments and believe deficit reduction should not come in the form of a “sick tax” on the nation’s poorest and sickest. The President’s Budget also included a reduced Market Basket Index (inflation) updates in 2014 to 2021. The proposed update reductions of 1.1 percentage points each year affect all post-acute providers. These reductions would be in addition to the 2014 home health rate rebasing and the productivity adjustments starting in 2015.

Val J. Halamandaris, President of NAHC said “essential home health services are at risk. The Medicare home care benefit, only $17 billion in 2009, has been cut by $77 billion over the next ten years. As a result of these cuts 53 percent of all Medicare participating agencies will be under water in 2012 — that is, paid less than their costs by Medicare. Congress should therefore resist making additional cuts in home care for any reason, including postponement of a 27 percent cut in Medicare physician fees.”  In regards to the home health reimbursement rates for doctors through Medicare, Halamandaris said “the home health community supports reforms that will stabilize Medicare payments to physicians. However, the costs of these reforms should not be funded by indiscriminate across the board cuts to home health care.”

Since 2009, when it was a $17 billion industry, the Medicare home health benefit has been cut by a disproportionate $77 billion over the next 10 years.  The cumulative effect of these cuts has been to limit access to patients, pushing thousands of providers to the point of bankruptcy.  With the 78 million baby boomer generation reaching their 65th birthday at the rate of 10,000 per day for the next 19 years, the need for home health services will only increase. Home health keeps families together and is overwhelmingly what patients prefer. It is far more cost effective for Medicare than institutional options.

Congress included $39.7 billion in home health payment cuts under the Patient Protection and Affordable Care Act (PPACA) through 2019. It reduced the home health inflation update one percentage point for 2011, 2012, and 2013, mandated rebasing of home health payment rates beginning in 2014 with a 4-year phase-in, and imposed a productivity adjustment in the inflation update beginning in 2015 that will reduce the inflation update by an estimated 1 percentage point each year. While home health represents less than 4 percent of Medicare spending it took a disproportionate 10 percent in Medicare payment cuts used to pay for the Patient Protection and Affordable Care Act.

The Centers for Medicare and Medicaid Services (CMS) issued rules that cut home health payment rates by 2.75 percent in 2008, 2.75 percent in 2009, 2.75 percent in 2010, 3.79 percent in 2011, 3.79 in 2012, and 1.32 in 2013 — for total reductions of over 16 percent which was in addition to the PPACA rate cuts. The Congressional Budget Office (CBO) recently increased the projected impact of the cuts to more than $32 billion.

As a result of sequestration, Congress’s agreement reducing the federal budget deficit in August 2011, home health patients and providers have taken an additional 2 percent cut reducing payments over the next 10 years by $6 billion dollars.

About NAHC

The National Association for Home Care & Hospice (NAHC) is a non-profit organization that represents the nation’s 25,000 home care and hospice organizations. NAHC also advocates for the more than two million nurses, therapists, aides and other caregivers employed by such organizations to provide in-home services to some 12 million Americans each year who are infirm, chronically ill, disabled and dying. Along with its advocacy, NAHC provides information to help its members provide the highest quality of care and is committed to excellence in every respect. To learn more about NAHC visit