CMS Adds New Enrollment Requirements for All Providers Under HHPPS Proposed Rule

Note: This article has been updated to include industry comment and may be updated again. 

WASHINGTON—Overall Medicare payments to home health providers would increase 2.4%, or $420 million overall, under a proposed rule released by the Centers for Medicare & Medicaid Services (CMS) on July 1. 

The proposed rule would also give CMS broader leeway to revoke Medicare enrollment from a wide range of providers, including durable medical equipment (DME) and hospice providers along with home health agencies, and to retroactively claw back funds from those who aren’t compliant. 

The new anti-fraud measures included in the 2027 Home Health Prospective Payment System proposal would allow for:  

• Retroactive Revocations: Under current regulations, certain Medicare enrollment revocations become effective 30 days after the date that CMS or the CMS contractor mails notice of the revocation to the affected provider or supplier. However, other revocations take effect retroactively to the date the provider’s noncompliance began. The agency is proposing to make all revocation grounds retroactive. 
• Adding or Expanding Bases for Revocation or Denial: CMS is proposing to add several new grounds for revocation or denial of enrollment and to expand some of our existing grounds, including requiring that hospices, home health agencies and durable medical equipment suppliers must re-enroll in Medicare as a new provider if they experience certain changes in majority ownership.  

“These proposals would give CMS stronger tools to protect Medicare beneficiaries and taxpayer dollars from fraud, waste and abuse,” said CMS Administrator Mehmet Oz. “The Trump Administration is committed to ensuring only qualified providers and suppliers participate in Medicare while preserving access to high-quality care for patients across the country.”

In addition, CMS is proposing to expand the number of reasons for which the agency can take action against what it called “problematic providers,” including: 

• CMS could revoke a provider’s or supplier’s Medicare enrollment if the enrollment presents a high risk of fraud, waste and abuse because the provider/supplier is located within a limited geographic area that has an excessive number of providers and suppliers.
• CMS could deny or revoke a provider’s or supplier’s Medicare enrollment if they have been convicted of a misdemeanor related to sexual assault or financial misconduct within the past 10 years.

According to a fact sheet included with the announcement, CMS included an analysis of home health utilization. It also analyzes the difference between assumed versus actual behavior change on estimated aggregate expenditures for home health payments linked to changing the unit of payment to 30 days and implementing the Patient-Driven Groupings Model (PDGM) case-mix adjustment methodology. This rule analyzes the difference between assumed versus actual behavior change on estimated aggregate expenditures, discusses the permanent adjustments applied in previous years and proposes a temporary adjustment to the 2027 home health base payment rate of 3%. 

In addition, CMS is proposing to recalibrate the PDGM case-mix weights, update the fixed dollar loss for outlier payments and update the low utilization payment adjustment thresholds, functional impairment levels and comorbidity adjustment subgroups. 

The National Alliance for Care at Home praised the overall payment increase for home health agencies as a “positive step,” but said the application of a 3% temporary adjustment could jeopardize access to care in the home. In a recent letter, the Alliance encouraged CMS to eliminate all permanent and temporary adjustments due to problems in the data and analyses used to calculate payment rates.  

“While the proposed rate update results in increased payments relative to last year—a reflection of our continued advocacy and a much-needed reprieve for providers under the stress of increasing costs—the Alliance remains focused on working to stop unwarranted temporary adjustments that are based on a flawed methodology with underlying data integrity issues,” said Alliance CEO Jennifer Sheets.

LeadingAge said the payment increase and lack of a permanent behavioral adjustment spares home health agencies from an additional blow, but the moves don’t resolve agencies’ underlying financial strain. 

“The 2.4% update does not fully keep pace with current labor and operating cost pressures, which are keenly felt after years of payment cuts,” said LeadingAge President and CEO Katie Smith Sloan. “Compounding this impact is CMS’s proposal to both continue with temporary recoupments and to maintain the permanent behavioral adjustments based on CY2020-22 data—which should be re-examined and CMS should eliminate all permanent and temporary adjustments as a result. Without further changes, roughly $4.9 billion in temporary adjustment dollars remain to be collected in the coming years, which sets up a grim cumulative financial trajectory for the sector.” 

The Calfornia Hospital and Palliative Care Association called out the proposed 3% temporary PDGM recoupment adjustment, calling it a “real concern for legitimate providers already stretched thin.” 

The proposal also discusses the provision of palliative care services under the Medicare home health benefit. The Alliance said it appreciates CMS’s interest in considering the role palliative care plays in the Medicare home health benefit. And the organization said it was revewing several other proposals included in the propsal, including: 

• a request for information regarding the construction of a home health specific wage index

• updates to deadlines for the Home Health Quality Reporting Program 

• a shift to calendar-year OASIS and HHCAHPS reporting 

• the provider enrollment and revocation measures 

“The Alliance supports reasonable, targeted efforts to root out fraud, waste, and abuse, but will scrutinize whether these enforcement tools are applied fairly and do not create new burdens for legitimate providers,” the group said in a statement. 

The proposed rule can be viewed on the federal register at federalregister.gov/public-inspection/current.