CMS Cuts Home Healthcare Spending 14% Over Next 4 Years

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Cuts in healthcare spending under the Patient Protection and Affordable Care Act will reduce Medicare home health payments 3.5 percent per year through 2017.

The percentage cuts, which went into effect Jan. 1, are the maximum allowed under the PPACA. CMS estimates the cuts, which total 14 percent between 2014 and 2017, will contribute to negative margins for approximately 7 percent of home health providers, bringing the total proportion of home health providers operating with negative margins to 40 percent by fiscal year 2017, according to the final rule, which allso suggests the cuts will incentivize more accurate billing and leaner operations.

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According to the Partnership for Quality Home Healthcare, Medicare home health benefits are the lowest-cost treatment option for the 3.5 million Medicare beneficiaries across the U.S.

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