Medicare-certified home health agency supply continued to grow in 2024, but much of that expansion was concentrated in California — particularly Los Angeles County, an area previously identified by the California state auditor as a major hotspot for hospice fraud, waste and abuse — according to the Medicare Payment Advisory Commission (MedPAC).
California, and Los Angeles County in particular, has also become the poster child for home health care fraud.
“Excluding California, the supply of home health agencies declined by about 1% between 2019 and 2024,” MedPAC’s July 2026 Data Book read.
The number of Medicare-certified home health agencies reached 12,234 in 2024, up from 12,057 in 2023. That marked a 1.5% increase year over year.
MedPAC also tracked home health utilization and found that, while the number of Medicare fee-for-service beneficiaries using home health fell 2.1% in 2024, home health utilization remained relatively steady when accounting for the decline in fee-for-service enrollment.
The decline in home health-utilizing Medicare fee-for-service beneficiaries is driven at least in part by an overall decline in the number of beneficiaries enrolled in fee-for-service Medicare, according to the data book. The downward trend of fee-for-service home health utilization, which has continued over several years, is due to the number of beneficiaries enrolled in Medicare Advantage and decreases in per capita fee-for-service hospitalizations, which are a common source of home health referrals.
Medicare Advantage penetration continues to be a source of pressure for the home health industry, as Medicare Advantage often pays home health providers significantly less than fee-for-service Medicare.
While noting the rise in Medicare Advantage enrollment, the MedPAC data book noted that fee-for-service Medicare margins for freestanding home health agencies remained high in 2024, with an aggregate margin of 21.2%.
“The 2024 margin is consistent with the historically high margins the home health industry has experienced since the prospective payment system (PPS) was implemented in 2000,” the data book stated. “The margins from 2001 and 2023 averaged 17.2%, indicating that most agencies have been paid well in excess of their costs for more than 20 years.”
For-profit agencies’ fee-for-service Medicare margins came in at 23.1% in 2024, while nonprofit agencies’ margins came in at 12.2%.
MedPAC has previously recommended cuts to the Medicare home health base payment rate, citing high margins. Hillary Loeffler, vice president of policy and regulatory affairs at the National Alliance for Care at Home (the Alliance), has previously told Home Health Care News that continued rate pressures can create instability in the home health industry, including reduced access to care.
In 2024, the average number of in-person visits per home health user was 24.6, holding steady across 2022, 2023 and 2024.
MedPAC’s data book also aligned with previous research on the source of home health admissions: that most Medicare home health admissions were from the community, rather than preceded by a hospitalization or institutional PAC stay. In 2024, 75% of home health periods were initiated from the community, while only 25% were initiated after a hospitalization or institutional PAC stay.