VNAs of Vermont seek $1.2M to raise Medicaid home‑health rates to 90% of Medicare

Jill Olsen, executive director of the VNAs of Vermont, told the House Health Care Committee that Vermont’s home health agencies play a critical role taking complex patients home after hospitalization and that the sector remains financially stressed by lower Medicaid reimbursement, rising staffing and travel costs, and recent federal Medicare payment changes.

"What I always say about home health, particularly in a place like Vermont, is really everyone that we're taking care of is someone who would otherwise be in a more expensive setting," Olsen said, explaining that home health averts hospital or nursing‑home care for many patients and that agencies currently receive about 14 percent of hospital discharges.

Nut graf: VNAs of Vermont asked the committee for an increase to bring Medicaid skilled home‑health reimbursement to roughly 90 percent of full Medicare rates (the group reported a current comparison of approximately 67 percent) and estimated the FY2026 general‑fund cost at about $1.2 million. The request would also increase pediatric palliative and high‑technology rates that historically move with the skilled skilled home‑health rate.

Olsen described structural pressures: a January 2020 Medicare payment model change followed by phased reductions has reduced standard Medicare rates for home health; concurrently, many patients have moved to Medicare Advantage plans that frequently reimburse below standard Medicare. She warned that Centers for Medicare & Medicaid Services (CMS) retains authority to apply retroactive “clawbacks” to earlier rate changes and that the aggregated financial pressure increases risk of further agency closures.

Olsen said Vermont’s home health sector faces higher operating costs tied to long travel distances in rural areas, mileage and “windshield time” that agencies pay but do not receive direct reimbursement for, and high contract traveler costs. She described one agency closure the prior March and said that because Vermont uses a designated‑territory system another agency assumed that territory; nonetheless, the closure shows fiscal vulnerability when an agency’s payer mix is heavily Medicaid.

The VNAs reported that 86 percent of home‑health beneficiaries have three or more chronic conditions, underscoring the complexity of the caseload. Olsen said the committee has previously increased Medicaid rates and that the association requests an additional increase now to reach 90 percent of Medicare; the association provided analysis mapping the Medicaid per‑visit schedule to Medicare’s more complex episodic payment matrix and offered to share supporting spreadsheets with committee staff.

Ending: Olsen asked the committee to consider the $1.2 million request and signaled continued engagement with administration staff, DIVA and federal stakeholders to track Medicare payment policy and manage federal risks.