After the Hospital: Ensuring Access to Quality Post-Acute Care

Health Care Costs and Drug PricingHouse Ways and Means Subcommittee on Health · March 11, 2025 · 119th Congress
The House Ways and Means Subcommittee on Health held this hearing to examine access to and reimbursement for post-acute care — home health, skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals (LTCHs) — that roughly 40% of hospitalized Medicare beneficiaries rely on after discharge. Begins at ▶ 0:29:44
Transcript
Highlights

Title

Post-Acute Care Access, Medicare Payment Reform, and Proposed Medicaid Cuts

Purpose

The House Ways and Means Subcommittee on Health held this hearing to examine access to and reimbursement for post-acute care — home health, skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals (LTCHs) — that roughly 40% of hospitalized Medicare beneficiaries rely on after discharge. Witnesses testified on payment system reform (including a proposed unified post-acute PPS), Medicare Advantage prior-authorization practices, staffing shortages, and nursing home staffing mandates, while Democrats used the hearing to warn about proposed $880 billion Medicaid cuts under consideration in budget reconciliation. Begins at▶ 0:29:44

Who spoke

• Chairman Vern Buchanan (R-FL)▶ 0:29:44: Opened by noting 40% of hospitalized Medicare beneficiaries use post-acute care▶ 0:29:44 and highlighted Rep. Carol Miller's bipartisan Hospice Recertification Flexibility Act allowing telehealth recertification▶ 0:30:45; later asked witness Jonathan Fleece about the keys to his organization's success▶ 2:26:35 and about pay-for-performance and preventative care▶ 2:29:06.

• Rep. Lloyd Doggett (D-TX), Ranking Member▶ 0:32:16: Said Medicaid covers two-thirds of nursing home residents and 60% of home- and community-based services and warned of an $880 billion proposed cut, largely from Medicaid▶ 0:32:46; argued Republicans plan to repeal minimum nursing-staff standards while cutting Medicaid funding▶ 0:33:17; later questioned Dongilli on Medicare Advantage discharge denials to LTCHs▶ 1:14:18.

• Dr. Dana Madison, Compassion Home Health Care▶ 0:40:58: Described home health payment history from cost-based reimbursement through PDGM and value-based purchasing▶ 0:41:29▶ 0:43:59; said MedPAC's reported 20% home health margins overstate true margins, which she put closer to 5% nationally▶ 0:45:01; noted rural staff often drive 400+ miles a week and the rural add-on payment was phased out in 2022▶ 0:42:29.

• Paul Dongilli, Jr., President/CEO, Madonna Rehabilitation Hospitals▶ 0:46:01: Shared a patient recovery story from Madonna's LTCH-to-rehab continuum▶ 0:46:31; said LTCH count fell from 438 in 2015 to 341 by July 2024▶ 0:47:32, and the high-cost outlier fixed-loss threshold doubled from about $38,000 to $77,000▶ 0:48:02; said Medicare Advantage plans deny nearly half of prior authorization requests for LTCH admission▶ 0:49:33, and later told the committee his LTCH margin fell from about 4% to -3% after the threshold doubled▶ 1:54:41.

• Jonathan Fleece, President/CEO, Empath Health▶ 0:51:03: Described Empath's hospice and home-based care model and a patient story on choosing hospice over hospitalization▶ 0:53:04; said hospice providers face excessive audits while some hospices avoid CMS quality-data reporting altogether▶ 0:55:36; later said Empath's home health division operates at a net loss and prior authorization delays sometimes mean "patients literally die during the discharge planning process"▶ 2:25:33.

• Lisa Grabert, MPH, Visiting Research Professor, Marquette University▶ 0:56:36: Said post-acute margins averaged 27% in 2022 (ranging 18%–39% by setting)▶ 0:57:38 and urged Congress to authorize a unified post-acute PPS, projected to save $80 billion over 10 years▶ 0:58:39; cited OIG findings that Medicare Advantage plans deny nearly half of LTCH prior authorization requests and uphold denials 75% of the time on appeal▶ 1:00:03.

• Eric Carlson, Justice in Aging▶ 1:02:11: Warned that $880 billion in Energy and Commerce cuts would fall largely on Medicaid, harming the 9.3 million Medicare beneficiaries who also rely on Medicaid for long-term care▶ 1:02:41; said University of Pennsylvania researchers estimate CMS's minimum staffing rule would save 13,000 lives annually▶ 1:06:13; testified nursing home industry profits exceeded 10% for 22 consecutive years per MedPAC▶ 1:17:20.

• Rep. Adrian Smith (R-NE)▶ 1:07:44: Noted Nebraska has only three LTCHs, all in the eastern part of the state▶ 0:08:14; described his Post-Acute Care Access Act addressing IVIG treatment reimbursement gaps▶ 1:09:14 and a planned bill for a skilled-nursing-facility-at-home option▶ 1:10:15.

• Rep. Mike Kelly (R-PA)▶ 1:19:53: Ceded his time to fellow member Dr. Murphy to discuss regulatory burden in post-acute care.

• A committee member (Dr. Murphy)▶ 1:21:23: Criticized CMS regulatory complexity, said he would "fire a third" of CMS staff▶ 1:22:23; cited 360 North Carolina patients medically cleared for discharge who waited an average of 73 days for post-acute placement▶ 1:24:25; said two-thirds of Medicare beneficiaries stuck waiting in hospitals are in Medicare Advantage plans [2:18:29 corrected: 1:26:26].

• Rep. Mike Thompson (D-CA)▶ 1:29:58: Said 63% of long-term care patients rely on Medicaid and cited local data — 26 facilities, 8,000 patients, 8,500 jobs — at risk from proposed cuts▶ 1:30:28; entered a news article on Elon Musk and Social Security cuts into the record▶ 1:33:29.

• Rep. Judy Chu (D-CA)▶ 1:35:31: Cited California costs of $83,000/year for out-of-home care and $147,000 for nursing home stays without Medicaid▶ 1:37:02; read constituent stories from Chi Kuang and Bailey▶ 1:38:03.

• Rep. Kevin Hearn (R-OK)▶ 1:41:05: Discussed his bill, HR 1924 (Securing Access to Care for Seniors in Critical Condition Act), with Rep. Boyle to modernize LTCH payment▶ 1:41:35; asked Grabert and Dongilli about payment reform priorities▶ 1:42:35.

• Rep. Dwight Evans (D-PA)▶ 1:46:37: Asked Carlson how Medicaid supports patients who are also Medicare enrollees needing post-acute care▶ 1:46:37.

• Rep. Carol Miller (R-WV)▶ 1:50:09: Discussed her Hospice Recertification Flexibility Act and Patient Access to Long-Term Care Hospitals Act, which would cap the high-cost outlier threshold at $50,000▶ 1:53:41.

• Rep. Brian Fitzpatrick (R-PA)▶ 1:56:12: Asked witnesses about staffing shortages' effects on care access▶ 1:56:42 and about the 2013 LTCH admission criteria (3-day ICU stay or 96 hours on a ventilator)▶ 1:59:16.

• Rep. Kelly Morrison / "Mr. Horoho" (D)▶ 2:00:47: Called the reconciliation bill the "screw America bill," said it would cut Medicaid alongside a $4.5 trillion tax cut, and warned of impacts on long-term care workers▶ 2:01:18.

• Rep. David Kustoff (R-TN)▶ 2:06:52: Asked Fleece about workforce pipelines from CNA to nursing roles▶ 2:07:22 and Dongilli about how deficiency-related loss of CNA training ability would hurt rural facilities▶ 2:08:53.

• Rep. Blake Moore (R-UT)▶ 2:11:54: Asked Grabert whether MedPAC's home health access measure is flawed▶ 2:11:54 and Fleece about telehealth best practices▶ 2:12:56.

• Rep. Linda Sánchez (D-CA)▶ 2:15:28: Discussed the bipartisan Credit for Caring Act reintroduced with Rep. Carey▶ 2:15:58; noted three of five nursing home residents rely on Medicaid▶ 2:16:28; cited about 40% of LTCH prior-authorization denials are overturned on appeal, per Dongilli▶ 2:21:00.

• Rep. Greg Steube (R-FL)▶ 2:21:30: Cited a 17% decline in home health agencies since 2019 (7,793 to 6,468 excluding California)▶ 2:21:30; asked Fleece about reimbursement sustainability, noting Empath's home health division operates at a net loss▶ 2:23:32.

• Rep. Don Beyer (D-VA)▶ 2:36:40: Discussed his Bureau for Older Workers bill and warned that a related appropriations measure cuts $280 million from Alzheimer's research and other programs affecting older Americans▶ 2:37:40; asked Carlson whether Medicaid could survive the proposed cuts▶ 2:39:42.

• Rep. Brad Schneider / "Mr. Suasi" (D)▶ 2:40:43: Proposed a public-private catastrophic long-term-care insurance program funded by projected Medicaid savings▶ 2:43:14; asked Carlson and Madison for their views▶ 2:44:45.

Key moments

• Doggett said the proposed $880 billion Commerce Committee cuts are 93% Medicaid and 7% CHIP, with Medicare spending set aside per CBO▶ 0:35:48.

• Madison said MedPAC's reported ~20% home health margins overstate reality and true margins are closer to 5% nationally when all costs are counted▶ 0:45:01.

• Dongilli said the LTCH high-cost outlier fixed-loss threshold doubled from about $38,000 (FY23) to $77,000 (FY25), and that his facility's LTCH margin fell from about 4% to -3% as a result▶ 0:48:02▶ 1:54:41.

• Grabert testified average post-acute marginal profits were 27% in 2022 (home health 27%, nursing homes 27%, rehab hospitals 39%, LTCHs 18%) and urged authorization of a unified post-acute PPS projected to save $80 billion over 10 years▶ 0:57:38▶ 0:58:39.

• Carlson cited University of Pennsylvania research estimating CMS's minimum nursing home staffing rule would save 13,000 lives annually, while noting phase-in periods run to 2027–2029 for rural facilities and hardship exemptions exist▶ 1:06:13▶ 1:06:43.

• Dongilli said Medicare Advantage plans deny prior authorization for LTCH admission roughly half the time versus immediate acceptance for traditional Medicare patients, illustrated with a paired-patient example▶ 0:49:33▶ 1:45:06.

• Dr. Murphy cited 360 North Carolina patients medically cleared for discharge but stuck an average of 73 days awaiting post-acute placement, with 51% waiting over a month and 25% waiting three months to two years▶ 1:24:25▶ 1:25:26.

• Thompson quoted Chairman Buchanan's own prior markup statement warning that without adequate staffing, rural nursing homes "will have no choice but to reduce the number of residents they admit or shut down altogether," then argued the proposed Medicaid cuts would trigger exactly that outcome▶ 2:19:29.

• Sánchez elicited from Dongilli that roughly 40% of denied LTCH prior-authorization requests are overturned on appeal▶ 2:21:00.

• Fleece said Empath's home health division currently operates at a net loss and that prior-authorization delays under Medicare Advantage sometimes mean "patients literally die during the discharge planning process"▶ 2:23:32▶ 2:25:33.

Metadata

CommitteeHouse Ways and Means Subcommittee on Health
Chamber / CongressHouse · 119th Congress
DateMarch 11, 2025
TypeHearing
Witnesses
Jonathan Fleece — President and CEO, Empath Health
Paul Dongilli, Jr.
Dr. Dana Madison — Compassion Home Health Care
Eric Carlson — Director of Long-Term Services and Supports Advocacy, Justice in Aging
Lisa Grabert, MPH — Visiting Research Professor, Marquette University
Videoyoutube
Transcript273 caption blocks · 20,850 words · 2:45:57 runtime
EventCongress.gov 118003