Early last week, CMS unveiled its new prospective payment system (PPS), which means that cuts to Medicare home health reimbursements for 2018 and a major overhaul of how home health care agencies could be paid in 2019 is underway.

This proposed change has a significant impact on the post acute industry. These changes impact all providers across the continuum of care. Each faces changing regulations, increased scrutiny, quality demands, decreased operating costs, and workforce challenges—likely resulting in declining revenue.

It is the most sweeping change since CMS implemented the PPS structure 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 can be significantly harmed through this proposed rule, with the greatest impacts seen in rural areas where patients may not have access to other care. We at McBee position ourselves very well to help our clients navigate this transformation and work 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 DordickMike Dordick, Executive Vice President, Principal

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


Keith BorochKeith Boroch, Assistant Vice President

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