tci Medicare Compliance & Reimbursement - 2004 Issue 2

Home Care: MEDPAC PEGS HHA PROFIT MARGIN AT 17%

Home care benefit drops chronically ill patients, research shows.  If the Medicare Payment Advisory Commission gets its way, home health agencies could see no inflation update to their 2005 payment rates. After industry complaints about last year's profit margin estimates of 22 percent for 2001 and 23 percent for 2003, MedPAC researchers gathered cost data from more HHA cost reports to generate 2004's estimate. Using data from about 3,500 freestanding agencies' cost reports, MedPAC estimates agencies' Medicare payments will be 17 percent more than their costs in 2004. The margin suggests "more than adequate payments for Medicare...

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