CMS Proposes 4% Payment Cut for Home Health

WASHINGTON—The Centers for Medicare & Medicaid Services (CMS) has proposed a more than 4% cut to home health payments next year, a move that advocates say will continue to harm patients and providers. 

CMS issued its proposed 2025 final rule for the home health prospective payment system (HH PPS) on Thursday, June 26, and in it suggests permanently adjusting rates downward 4.067% to account for what it called the impact of implementing the Patient-Driven Groupings Model (PDGM). 

“This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment,” CMS wrote in a news release. “For CY 2023 and CY 2024, CMS previously applied a 3.925% reduction and a 2.890% reduction, respectively, which were half of the estimated required permanent adjustment.”

The National Association for Homecare and Hospice has argued that reducing payments due to PDGM is based on a flawed methodology—even suing the agency (the lawsuit was dismissed). 

NAHC President William A. Dombi said in a statement that the new proposed payment rates continue the “ongoing and predictable rate reductions” that home health agencies (HHAs) have faced since 2020. 

“Congress must step in immediately to put an end to this dismantling of the Medicare home health benefit,” Dombi said. “The value of home health services is not only undeniable; it has been proven by CMS in its analysis and expansion of the highly successful Home Health Value Purchasing demonstration project. We call on Congress to correct what CMS has done and prevent the growing harm to the millions of highly vulnerable home health patients that depend and will depend in the future on this essential Medicare benefit.” 

Katie Smith Sloan, president and CEO of LeadingAge, also said the cuts would hit care providers hard, especially in terms of recruiting and retaining nurses in a competitive hiring environment. 

“Without staff, there is no care; ultimately, older adults and families will suffer,” she said. “The lack of consideration for the full care continuum and current demand for (registered nurses) is one example of how the Biden administration’s payment approach is simply at odds with its rhetoric in support of aging services and long-term care.” 

An active bill, S 2137, the Preserving Access to Home Health Act, would eliminate the rate cuts if enacted. 

In addition to the payment rates, the proposed final rule would: 

• recalibrate PDGM case-mix weights
• update the fixed dollar loss (FDL) for outlier payments
• update the low utilization payment adjustment (LUPA) thresholds, functional impairment levels, and comorbidity adjustment subgroups for calendar year (CY) 2025
• establish a home health occupational therapy (OT) LUPA add-on factor and update other LUPA add-on factors 

The rule also proposes to adopt the core-based statistical area (CBSA) delineations for the home health wage index using the 2020 Decennial Census. Additionally, this rule includes a proposed rate update for the CY 2025 intravenous immune globulin (IVIG) items and services’ payment under the IVIG benefit. It discusses how the CY 2025 payment rate update for the negative pressure wound therapy disposable device (dNPWT) will be applied. 

CMS is also proposing updates to the Home Health Quality Reporting Program (HHQRP), including the collection of four new items as standard patient assessment data elements in the social determinants of health category, and asking for input on future measures. 

The rule also requests information on 

• potential future performance measures for the expanded Home Health Value-Based Purchasing Model 
• the possibility of rehabilitative therapists conducting some comprehensive case assessments
• HHA scope of services and the communications between patients’ physicians and allowed practitioners and reviewing the plan of care 

You can find the full fact sheet here.