Senate Bill Launched to Freeze Proposed Home Health Payment Cuts

LAS VEGAS (July 26, 2022)—Two senators have co-sponsored legislation that would prevent proposed Medicare rate cuts for home health agencies, and a companion in the House is expected to follow later this week, the National Association for Homecare and Hospice (NAHC) announced.

The Preserving Access to Home Health Act blocks the Centers for Medicare & Medicaid Services (CMS) from instituting a nearly 8% reduction to the base payment rate as called for in a proposed rule for home health services for calendar year 2023. In the proposal, CMS said it was responding to changes made due to the implementation of the Patient-Driven Groupings Model (PDGM) and a move to 30-day payment periods. But NAHC believes that CMS is not in compliance with the law in proposing the rate cut.

“We firmly believe that CMS’s methodology is non-compliant with what the law requires,” NAHC President Bill Dombi said. That’s because in creating PDGM, CMS was authorized to make adjustments to the base payment rates to account for behavioral assumptions, he explained. CMS was also authorized to make additional adjustments to maintain budget neutrality between projections of what would have been spent under the former prospective payment system and what has been spent under PDGM.

In last year’s rulemaking CMS indicated it would need about a 6% cut in payment rates to meet budget neutrality but elected not to institute it due the ongoing COVID-19 pandemic. For 2023, the agency has proposed a 7.69% budget neutrality cut and said it overpaid by $2 billion in previous years.

NAHC said the potential cuts—plus a paltry 3% response to inflation in the proposed rule—mean that 44% of all home health agencies would operate at a loss in the year the rate cut takes effect.

“This is a very difficult time to reduce payment rates when you’ve got high inflation out there,” Dombi said—especially when home health agencies are facing unprecedented hiring pressures.

Dombi said NAHC and its Capitol Hill allies put a great deal of strategy into designing the bill and its timing. It was created to be budget neutral in hopes of getting a “go ahead” score from the Congressional Budget Office. It extends the payment freeze through 2026 but requires any make-up payments then discovered to be paid by 2032 in order to keep everything within the current 10-year budget cycle. And it focuses solely on the payment issue, not on other adjustments in the proposed rule.

Timing was also important in designing bill, S 4605, Dombi said. It was launched with two heavy-hitting co-sponsors, Michigan Democrat Sen. Debbie Stabenow, who is the chairwoman of the Senate Subcommittee on Healthcare, and Maine Republican Sen. Susan Collins. The intention is to get it moving before Congress recesses for the summer and before public comment closes on the proposed rule Aug. 16. That means the move could help influence CMS, Dombi said. And if it doesn’t, there are opportunities to attach the move to larger legislative actions, including a budget reconciliation bill or possibly post-election legislation that would tie up other loose ends regarding the public health emergency, including telehealth access.

“That may be our best chance of having this cross the finish line before Jan. 1,” said Dombi, who also added that advocates aren’t putting all their eggs in the legislative basket.

In the meantime, NAHC is working to create a wave of co-sponsors and calling on members of the industry to contact their senators and representatives to ask them to sign on. 

“We’re not looking for certain targeted people to become co-sponsors, we’re looking for vast numbers of people,” Dombi said. “We do hope that by the time they return after Labor Day, there will be in waiting dozens of senators and maybe hundreds of members of the Hose. People may say that’s wishful thinking but you have to go into this with a goal and that’s our goal.”