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Home Health Sector Blames ACA Pay Cuts For Big Job Losses In December

Published by Inside Health Policy
John Wilkerson
February 3, 2014

The home health sector lost more jobs in December than in any previous month over the past decade, according to the Partnership for Quality Home Healthcare, which blames the health law's 14 percent pay cut that phases in over the next four years.

Due to the ACA-driven pay cuts, which include adjustments to the national, standardized 60-day episode pay rate for home health services, Medicare home health funding will be reduced by 3.5 percent each year over the coming four years. CMS described the cuts as a 2.81 percent adjustment rather than a 3.5 percent cut. Industry argues that the law allowed CMS to cut pay by less.

The health care sector lost 3,700 jobs in December, the Partnership for Quality Home Healthcare states, basing its findings on the December jobs report by the Bureau of Labor Statistics. Before December, the home health firms hired more than were laid off in 125 of 131 preceding months.

"There is widespread concern that this loss in jobs is just the beginning," Partnership for Quality Home Healthcare CEO Eric Berger said.

Avalere Health projects that half a million jobs eventually could be lost if the pay cuts are not reversed.

Likewise, the National Association for Home Care & Hospice estimates that the pay cut will amount to $22 billion by the end of 2017. When CMS issued the final pay rule in early December, NAHC President Val Halamandaris said up to three-quarters of home health companies would have no profit margins by 2017.

Halamandaris said in December that NAHC might work with seniors' advocates to take the agency to court in a bid to reverse the cuts. It is unclear whether the group still plans to spearhead a lawsuit.

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