Sustainable Growth Rate Legislation Includes Two-Year Extension of Rural Add-on
The U.S. House of Representatives this Thursday will consider legislation on the floor to permanently repeal the Sustainable Growth Rate (SGR). The National Association for Home Care & Hospice (NAHC) has learned that this legislation will include a two-year extension of the Medicare Home Health Rural add-on at its current 3% level, which is set to expire at the end of this year.
As previously reported, the Rural Add-on extension has been one of NAHC’s top priorities for the SGR bill and it would be a huge victory for home care. However, the SGR legislation—as currently drafted—also includes some problematic provisions for home care and hospice, including a reduction in the annual inflation update and imposition of a surety bond on home health. In addition to keeping the rural add-on extension language in the bill, NAHC is working to mitigate the payment cut and remove the surety bond requirement from the legislation.
The legislation will extend the current 3 percent payment rate add-on for home health services delivered to residents of rural areas. This is exactly what NAHC recommended to Congress in its Legislative Blueprint for Action. Loss of the add-on would likely result in agencies having to turn away patients and even eliminate services in rural areas. The delivery of care in rural areas generally costs more than it does in urban areas due to a number of factors. Rural agencies endure fixed costs with fewer patients and visits, resulting in higher per-patient and per-visit costs. Rural agencies also tend to lack access to capital for technological advances that can improve efficiency. MedPAC has consistently found that rural agencies have profit margins below those of urban agencies. For those reasons and more, rural home health services have had a payment differential in one form or another for most of the last 25 years.
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