How Congress can stave off a crisis in home care

By THOMAS RYAN
Guest Columnist

The next Congress will inherit a healthcare disaster.

Across America, companies that provide vital medical equipment to Medicare patients in their homes are drastically cutting services – or shutting their doors completely. Without action, millions of seniors could lose access to oxygen tanks, wheelchairs, and other essential equipment that keeps them healthy at home.

At the start of 2024, Medicare slashed payments for a major segment of home medical equipment providers by 20 percent. These rates – already too low before this year’s cuts – now fall catastrophically short of market realities. A perfect storm of supply chain disruptions, rising fuel costs for equipment delivery and service calls, and a nationwide shortage of trained technicians has sent operating costs soaring. Other payers – including private Medicare Advantage plans, commercial insurers, and Medicaid – have followed Medicare and cut their rates as well.

For hundreds of small businesses that provide home care to seniors, the math no longer works. Congress must act to restore Medicare reimbursement for homecare to pre-2024 levels.

A July 2024 survey of providers reveals the scope of the emergency. More than nine in 10 companies have had to make operational changes to keep their doors open. Two-thirds are no longer able to provide certain essential medical equipment to Medicare patients. One in three providers reports dipping into personal savings just to keep serving their communities.

When these companies close, they leave behind healthcare deserts where patients have no alternative sources for oxygen tanks, hospital beds, or wheelchair repairs. One provider’s stark warning echoes across the industry: “We are to the point if reimbursement doesn’t increase soon, we will be shutting our doors and leaving 15,000 patients without a provider.”

What makes these reimbursement cuts so baffling is their ignorance of basic health economics. Caring for patients at home reduces visits to the hospital, which cost more than $3,000 per day, on average.

Or consider the costs of long-term institutional care. The average cost of a stay in an assisted living facility is $5,300 a month. For patients who require nursing home care, the tab can run nearly $10,000 a month.

Home medical equipment that can allow people to receive care at home – like home-oxygen systems and mobility aids – can save patients and their families tens of thousands of dollars.

This crisis comes at precisely the wrong moment. McKinsey estimates that up to $265 billion worth of care services for Medicare beneficiaries could move from facilities to homes by 2025, representing a massive transformation in how we deliver health care. As America’s senior population grows, we should be strengthening home-based care – not undermining it.

Every day of inaction deprives more seniors of the option to stay in their homes, where they’d prefer to be – and increases the risk that additional providers will have to close their doors permanently.

Congress must act to restore adequate reimbursement for home medical equipment. The independence and dignity of millions of Americans hang in the balance.

Thomas Ryan is president and CEO of the American Association for Homecare (aahomecare.org). A version of this piece originally appeared in Medical Economics.