MedPac seems to come out with their recommendations a few times a year and each time, it reinforces the point that the advisory committee is not working within the reality of homecare today. The committee’s determinations are derived from cost report data which, as we know, does not include all typical business operating expenses – mainly marketing expenses, wages and associated payroll taxes. If agencies were allowed to include marketing expenses, the likelihood of high profit margins would not exist.
In a December 11, 2015 presentation, MedPac outlines that, based on Cost Report data, agencies are still earning positive net incomes that are too high. Additionally, because of the constant growth of larger, national agencies, MedPac believes that all agencies are able to access loans and lines of credit or other credit facilities in order to support operations and growth. However, for smaller, locally owned agencies, this isn’t always the case.
Once again, MedPac proves how out of touch with reality the committee is. The members should be forced to learn cost reporting methodology and then understand the difference between a small provider and a larger, national organization. These educational values imposed upon MedPac members would likely create a better understanding and better environment in which agencies can operate.
The members may also see that larger national organizations based on size aren’t always best and that small providers are the ones who usually take care of those in need who may not have the best insurance. It is likely no shock to you, but the national companies are after only one thing – Medicare patients. Their constant desire for such patients usually shines a negative light on the industry when coupled with agencies who follow their own set of rules and think they can do whatever they want.