A Major Overhaul to How Home Health Agencies are Paid

Home Health Prospective Payment SystemEarly last week, CMS unveiled its new home health prospective payment system (HH PPS). As a result, home health agencies could see cuts to reimbursements for 2018 and a major overhaul to how they are paid in 2019.

Consequently, the home health prospective payment system has a significant impact on the post acute industry.  These changes impact all provider across the continuum of care. No matter if the provider is a health care system, hospital, home health, home care, hospice, skilled nursing home, sub-acute facility, or long-term care; each is faced with changing regulations, increased scrutiny, quality demands, decreased operating costs, and workforce challenges—likely resulting in declining revenue.

It is the most sweeping change since the PPS structure was implemented in August of 2000.

With the CMS focused on bundled payments and value-based purchasing, the current environment has caused non-health system or hospital-affiliated home health agencies to question their long-term relevance and value proposition. These providers are finding with the continual development of “preferred provider networks” issued by health systems that they are losing access to traditional referral sources.

There is a risk that agencies will be significantly harmed through this proposed rule with the greatest impacts being seen in rural areas where patients may not have access to other care.  McBee is positioned very well to help our clients navigate this time of transformation and will be working closely with NAHC and the Partnership for Quality Home Healthcare to challenge the proposed change.

Learn more about the CMS Proposed Payment Changes for Medicare Home Health Agencies.


About The Contributors


Mike Dordick, Executive Vice President, Principal–McBee

Mike has more than 20 years experience in health care financial and management consulting. He leads McBee’s Post Acute Division and works with home health and hospice providers to improve clinical outcomes, increase cash flow, and develop best practices in operations.


Keith Boroch, Assistant Vice President–McBee

Keith Boroch leads the Post Acute Consulting Practice. Keith has more than 30 years of strategic, operational, and financial management experience in health care and financial service environments.