Assessing the Impact of the Affordable Care Act Reimbursement Policy on the Medicare Home Health Care Market and Implications for Beneficiaries

Abstract

The current study examined the impact of the recent Affordable Care Act (ACA) reimbursement cuts on the Medicare Home Health Care (HHC) market. First, the number of new agencies, number of agencies that exited the market, and the number of active agencies were counted, 2010-2017, in order to determine the rate of change between time periods. Next, the difference in average HHC staff count was determined. Then, using logistic regression, the odds of agency termination and the odds of agency decrease in staff by agency characteristics, was determined for both periods. Finally, qualitative interviews were conducted with 13 HHC directors to further explore their experiences during the reimbursement cuts. Free standing agencies had 1.35 times the odds of exiting from the HHC market post ACA cuts compared to institution-based agencies. There were no differences in the odds of exiting the HHC market between for-profit and non-profit agencies. Agencies in the New York, Atlanta, and Chicago regions had a greater likelihood of exiting the HHC market post ACA cuts. Small agencies had two times the odds of exiting and agencies with one or more branch had less than half the odds of exiting from the HHC market. The average number of all staff was similar before and after the ACA cuts; however, office staff and home health aides experienced the greatest decrease in number. Agencies that were for-profit, free-standing, small, and/or with one or more branch were more likely to decrease staff post the ACA cuts. Agencies in the New York, Atlanta, Chicago, Dallas and Kansas regions were more likely to decrease staff. Similar to existing research, the strategies used to manage the reimbursement cuts either focused on reducing the amount of service to patients, the intensity of service, or on cutting costs for supplies, staff travel and support services. In addition, agencies indicated relying more heavily on informal caregivers. Overall, the policy effects varied by geographic region and had greater impact on more vulnerable agencies and staff that were non-skilled. Strategies utilized during this time had the potential to negatively impact access to and quality of care for Medicare beneficiaries.