Former CMS Administrator Seema Verma speaking at Heritage Foundation conference

To convince the Centers for Medicare & Medicaid Services to walk back its proposed home health rate cut, providers need evidence. That is according to Seema Verma, former CMS administrator.

“It has to be data-driven,” she said Wednesday at the closing session of the Home Care Innovation and Investment Conference at the Fairmont Hotel in Chicago. Providers should present the agency concrete proof of why they disagree with CMS’ analysis. “I think it’s got to be numbers-driven,” she added.  

CMS stunned providers late last week with its proposed 4.2%, or $810 million, Medicare home health payment reduction for calendar year 2023. The cut reflects a steep and controversial 7.69% decrease in the behavioral assumption adjustment to the Patient-Driven Groupings Model.

Verma explained Wednesday that rate setting at CMS is “nondecisional,” meaning there is not an opening for outside influence. Actuaries run cost reports, and CMS acts on that data.

“I think in this case and in every case they are sort of looking at it very myopically,” she said.

Prove value

While CMS is not able to look at home health “holistically,” providers have an opportunity to prove their value — lower costs and keep people out of the hospital — with other payers. These include Medicare Advantage and other arrangements where they are taking risk, she said.

In this regard, providers need to take initiative, she said.

“It’s incumbent on providers to get into the value game,” Verma said, echoing comments she made in February.

Providers have to show them the value proposition of having better outcomes and for less money. To get data, invest in great software and analytics. Then use it when constructing agreements.

“Don’t wait for the opportunity to come to you; create them,” she advised.


Verma also talked Wednesday about the number of payment models — over 50 — at the Center for Medicare and Medicaid Innovation. The number is not sustainable, she said. Smaller models likely will not continue. Home health has the opportunity to be a part of larger models at the local level. She was bullish about the continuation of the Home Health Value-Based Purchasing Model, which is growing to include all 50 states next year.

“That one I could definitely see being expanded,” she said.

She also expressed hope that hospital-at-home will be a “candidate for another model.” CMS extended the use of hospital-at-home at the beginning of the pandemic as part of the Hospitals Without Walls waiver program.

Verma noted that voluntary models are not as successful in demonstrating savings and increasing quality as mandatory models. She also said she does not believe a burst of new activity at CMMI will pick up soon due to the sheer number of models CMMI is testing and the impact of the pandemic.