|Sources: MedPAC Report to the Congress: Medicare Payment Policy, March 2014 and 2016 and MedPAC June 2014 and June 2015 Data Book.|
|All Freestanding HHAs||10.8%|
Freestanding home health agencies had an aggregate margin of 10.8 percent in 2014. MedPAC
estimates the marginal profit of HHAs to be 13.3 percent in 2014, about 20 percent higher than the overall Medicare margin.
“[MedPAC] includes hospital-based HHAs in the analysis of inpatient hospital margins because these agencies operate in the financial context of hospital operations. Margins for hospital-based agencies in 2014 were -22.4 percent. The lower margins of hospital-based agencies are chiefly because of higher costs, some of which may be due to overhead costs allocated to the HHA from their parent hospitals.
“On the basis of these policies and assumptions, [MedPAC] projects a margin of 8.8 percent in 2016. This projection assumes that the sequester reduction of 2 percent remains in effect through 2016.”
Sources: MedPAC Report to the Congress: Medicare Payment Policy, March 2014 and 2016 and MedPAC June 2014 and June 2015 Data Book.