New Administration Report Highlights Threat Facing Vulnerable Medicare Seniors

January 6, 2014
Contact: Ellen Almond

New Administration Report Highlights Threat Facing Vulnerable Medicare Seniors

Estimates of lower spending include deep cuts to vital Medicare benefits, including patient-preferred Medicare home health services

Washington, DC – In response to the report released today by the Centers for Medicare and Medicaid Services (CMS) claiming a reduction in health spending due to the Affordable Care Act (ACA), national home health leaders warned that this claim is based in part on deep Medicare cuts that directly impact the nation’s most vulnerable senior and disabled populations. These cuts, which went into effect on New Year's Day and will be imposed over the course of the next four years (2014-2017), threaten patient access to skilled home health services for millions of homebound seniors.

CMS recently announced cuts to Medicare home health payments by 3.5 percent annually for four years – the maximum allowable under the Affordable Care Act (ACA) – thereby imposing an unprecedented total cut of 14 percent. The Centers for Medicare and Medicaid Services (CMS), within their Final Rule, concedes that these deep cuts will leave “approximately 40 percent” of all home health providers with negative margins by CY 2017.

“We commend the Administration for seeking to reduce health spending, but are deeply concerned that the significant cut to home health services is the wrong approach,” stated Eric Berger, CEO of the Partnership for Quality Home Healthcare. “The Administration itself has conceded that 'approximately 40 percent' of all home health providers will operate at a loss as a result of the recent rebasing cut and, therefore, face bankruptcy and closure. The unprecedented impact of this cut will reduce access to low-cost in-home healthcare services and force seniors into more costly institutional settings, which will in fact increase healthcare spending. The Administration may be able to claim lower spending today but at what cost?"

The Medicare home health benefit is overwhelmingly preferred by older Americans and is the lowest-cost treatment option available to ailing seniors. Medicare home health services are delivered to approximately 3.5 million Medicare beneficiaries, who are documented as being poorer, older, sicker, and more likely from a minority population than other Medicare beneficiaries.

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