Alliance Says CMS Home Health Proposed Rule Falls Short on Payments, Protecting Access to Care

ALEXANDRIA, Virginia—While next year’s planned home health Medicare rates do include a welcome full annual payment update, the overall proposed rule doesn’t do enough to undo prior harm or protect access to care across the country, the National Alliance for Care at Home said in public comments on the rule. 

The public comment period for the Centers for Medicare & Medicaid Services’ (CMS) 2027 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics and Supplies Competitive Bidding Program Updates closed August 31, and more than 650 comments were posted on the Federal Register, including those by the Alliance. 

In its comments, the Alliance noted that it appreciates that, for the first time since 2022, CMS proposed a full annual payment update, does not propose to apply a new permanent adjustment and acknowledges that behavior changes reflected in 2023 and later claims are attributable to confounding factors rather than to the patient-driven groupings model. However, the comment also emphasizes that “these decisions do not undo the harm already built into the payment rate, nor do they do enough to protect access to care across the country,” the organization said in a news release. 

The letter stated that four consecutive years of permanent adjustments have reduced the 30-day rate by 9.37% or over $1.5 billion annually. CMS also proposed to continue the -3% temporary adjustment, collecting approximately $500 million against a calculated balance of $4.9 billion. The Alliance said it estimates the permanent adjustments will produce aggregate reductions of $18.9 billion from 2020 through 2030.  

“A single positive update does not restore a base rate reduced by 9.37% that will continue to be cut by roughly 3% annually for the next decade,” the Alliance said. “The confounding factors CMS correctly identified for CY 2023 and later were present earlier, and the methodology that produced the adjustments still embedded in the rate remains flawed. Unequivocally, more must be done to defend access to home health in the face of years of payment cuts paired with rising costs and increased demand.”

The letter also detailed the Alliance’s recommendations related to the broad set of enrollment proposals impacting the entire Medicare provider and supplier community. The Alliance said it supports CMS’s goal of removing bad actors, yet expressed concern that many of these proposals do not distinguish bad actors from legitimate providers operating in good faith. As proposed, CMS could deny or revoke a legitimate provider’s enrollment based on a neighbor’s conduct, a shared address, a vendor relationship or an innocent administrative error. The Alliance said revocations should be weighed carefully considering the impact they have not only on the provider, but also beneficiaries served.

The American Health Care Association and National Center for Assisted Living echoed those concerns in its public comments, asking CMS to focus more closely on high-risk providers and to clearly distinguish between intentional misconduct and accidental errors. 

The Alliance said it is committed to ongoing collaboration with CMS to achieve a payment system that supports the true cost of delivering high-quality care in the home and provider enrollment and program integrity measures that distinguish between bad actors and providers operating in good faith. Demand for care at home is rising, and studies show home-based care is the preferred option for those who need it. 

The Alliance also urged CMS not to finalize the proposed temporary adjustment for 2027 and to provide a sufficient rate update that supports quality care delivery. The Alliance also urged CMS to remove provider and supplier enrollment proposals that will have serious and deleterious impacts on beneficiaries and providers alike.