I read kind of a scary article on the Healthcare Market Resources website (www.healthmr.com) entitled Medicate Policy Makers Threaten the Viability of Home Care and Hospice.  The article is thorough and well-written.  I encourage you to read it in its entirelty if you run a home health or hospice business, but I'll do my best to give you the executuve summary here.

• Reimbursements are being cut by 11% over 4 years.
• Many agencies don't have 11% in margin and the cuts will make thriving businesses become insolvent
• This is being done deliberately for two reasons:
  1. Medicare can better overse a smaller number of agencies and reduce or eliminate fraud
  2. The number of new start-ups in home health make Medicare think that the business model is too attractive presently
• Hospice payments will be reuced for patients who live beyond 180 days (presently this is 38% of expenses)
• Hospice care is likely to move to Medicare advantage (whereas today it is mostly fee-for-service).  This is expected to drive the payers to negotiate better deals with hospices
• Dual-eligibles (people eligible for both Medicare and Medicaid) will likely end up with aligned payment structures that further reduce reimbursement

What must Home Health and Hospice do to Survive?

The article focuses on two suggestions to help agencies survive, as follows:

1. Get Bigger: The article suggests that it will be necessary to merge and become larger in order to spread overhead costs over a broader number of patients.
2. Get involved in Care Transition and Long Term Care services that ultimately save costs for Accountable Care Organizations (ACOs)

Here at Ankota, we have software for managing care transitions, including the ability to receive referrals electronically from hospitals and ACOs.  We also believe that home health agencies should look into providing ongoing non-medical care (private pay and programs including Medicaid and local programs) and chronic illness care (reimbursed by ACOs).  

Ankota provides software to improve the delivery of care outside the hospital, focusing on efficiency and care coordination. Ankota's primary focus is on Care Transitions for Reeadmisison avoidance and on management of Private Duty non-medical home care. To learn more, please visit www.ankota.com or contact Ankota.