Proposed Payment Rule Could Hamper Home Health Agencies, NAHC Says

WASHINGTON—The Centers for Medicare & Medicaid’s (CMS) proposed rate reductions for home health could be devastating for agencies if they are codified, said Bill Dombi, president of the National Association for Home Care & Hospice (NAHC). Even worse, CMS has left a door open to demand some $3 billion in clawbacks for prior years of what it interprets as over-payments.  

“This is the thing that has created sleepless nights for all of us,” Dombi said on a webinar NAHC held July 11 to explain the details of the proposed rule. “When you see these numbers they add up.”  

Fortunately, CMS has held off for the moment on adding the clawback to its proposed rule, but the agency “has the power to determine the time and manner” that it might do so in the future, Dombi said.

NAHC has filed suit against CMS and the Department of Health and Human Services over the issue, saying the agency’s methodology for calculating “budget neutrality” is incorrect because it should be based on what would have happened had the Patient-Driven Groupings Model (PDGM) not gone into effect.  

“It’s not only illogical, but illegal as well,” Dombi said. “When we’ve done the calculation we’ve concluded that providers of home health services have truly been underpaid on a budget neutrality basis.”

Altogether, he said, home health agencies (HHAs) are facing a spending decrease of about $375 million in 2024 alone under the proposed rule. But because there is a longer-term negative adjustment of 5.653% for CMS’s behavioral adjustment, there is actually a multi-year reduction in home health spending closer to $870 million. And an inflation adjustment of 2.7% won’t be adequate, he added.

“The inflation figure is likely to get the reaction, ‘That’s it?’” Dombi said. “Your costs have gone up significantly more than 2.7%.”

Dombi explained that the PDGM was a game changer for home health agencies and overlapped with another major shift that came with the COVID-19 pandemic. As a result of those and other factors the number of Medicare-participating home health agencies has declined by a little over 200 between 2019 and 2023; excluding California, which has experienced an anomalous spike, the drop actually tops 400. HHAs are already struggling with staffing woes and shrinking payments from increasingly popular Medicare Advantage programs and have little margin for cuts. 

NAHC is calling on the industry to make comments on the proposed rule and also plans to continue work in Congress to potentially block CMS from implementing a permanent rate back to the beginning of PDGM. Meanwhile, he said, the court case could take months or even years to resolve.

“We never look at litigation lightly, it’s always a last resort,” he said.

On the webinar, Mary Carr, NAHC’s vice president for regulatory affairs, also broke down several other components of the rule, including:

• Disposable negative pressure wound (NPW) therapy: The proposed rule now bundles payment for NPW services and devices, separated from home health services, is “very confusing,” she said.
• The home health quality reporting program (QRP): “I personally was a little surprised to see as many changes as CMS is proposing here,” Carr said. That includes adding two new measures—a discharge functional score and the percentage of patients who are up to date on their COVID-19 vaccinations—and removing the long process measure, among other changes.
• The home health value-based purchasing program (HHVBP): CMS is changing the baseline to 2023 and making other adjustments.
• Intravenous immunoglobulin (IVIG) therapy: CMS wants to make the demonstration program permanent; under the rule, starting in January 2024, if an agency cannot provide a patient with IVIG, that patient must be discharged and seek treatment elsewhere. “If you have a patient who has an immune deficiency diagnosis, your antennas should go up,” Carr said. “If you’re not providing it today, you’re unlikely to be able to provide it in January.”
• Lymphedema treatment: This is a new Part B therapy category in addition to the durable medical equipment (DME) benefit. “What is unclear is how does this fit in with home health,” Carr said, and HHAs need to be sure this doesn’t show up on the consolidated billing list for home health.