Home Healthcare Services NAICS 621610

May 1, 2025 - Congress Moves Forward On Legislation Containing Medicaid Cuts

• The US Congress is considering plans to cut Medicaid to help pay for tax cuts, according to health policy organization KFF. Congressional Republicans hope to pass the tax-cut legislation by July 4, according to CNN. A House of Representatives budget resolution targets $880 billion or more in potential reductions to federal Medicaid spending. Home healthcare services providers are dependent on third party payers, including Medicare, Medicaid, private insurance companies, and managed care organizations, as sources of revenue. Medicaid is the primary program providing comprehensive health and long-term care to one in five US residents and accounts for nearly $1 out of every $5 spent on health care. Reductions in Medicaid could have implications for enrollees, insurance plans, providers, and state budgets. • Medicare home health payments will increase 0.5% in 2025 under final rules issued by the Centers for Medicare and Medicaid Services (CMS). The increase is slight but CMS had proposed a 1.7% cut in June. The home health prospective payment system final rule reflects the continued implementation of the Patient-Driven Groupings Model. This formula bases reimbursements on patient characteristics rather than therapy hours and sets payments based on 30-day episodes instead of 60 days.
• Many Medicare beneficiaries are not getting the home health care that has been prescribed for them, according to the Association of Health Care Journalists (AHCJ). Fulfillment rates for home health referrals dropped from 66% to 59% between 2016 and 2022, according to a Commonwealth Fund analysis of Medicare claims data. Lack of appropriate services can lead to more frequent rehospitalizations within 30 days of discharge and increased morbidity and mortality, according to the AHCJ.

• Medicare home health payments will increase 0.5% in 2025 under final rules issued by the Centers for Medicare and Medicaid Services (CMS). The increase is slight but CMS had proposed a 1.7% cut in June. The home health prospective payment system final rule reflects the continued implementation of the Patient-Driven Groupings Model. This formula bases reimbursements on patient characteristics rather than therapy hours and sets payments based on 30-day episodes instead of 60 days.
• Home healthcare industry employment decreased slightly and average wages for nonsupervisory employees increased slightly during the first month of 2025, according to the US Bureau of Labor Statistics (BLS). Home healthcare services increased prices slightly during 2024, according to the BLS. Industry sales are forecast to increase at a 6.44% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.