medical expenses

A bipartisan team of lawmakers is urging the Centers for Medicare and Medicaid Services to draw up a home health payment rule for next year that ensures payments under the Patient-Driven Groupings Model (PDGM) are fair to providers and extend high-quality care to patients.

In a letter to CMS, Sen. Debbie Stabenow (D-MI), Sen. Todd Young (R-IN), Rep. Terri Sewell (D-AL) and Rep. Vern Buchanon (R-FL) questioned whether the upcoming rule will properly evaluate whether PDGM was budget-neutral in 2020.

“We are concerned that CMS may not be able to reliably determine whether any change in aggregate payments in 2020 was caused by provider behavior, the impacts of COVID-19 or other aspects of the new payment system,” the lawmakers wrote. “To the extent such a determination is possible, we believe CMS should consider applying pre-PDGM provider behaviors to establish the estimated spending that would have occurred in the absence of PDGM.”  

Last year, home care providers unsuccessfully tried to block a 4.36% behavioral rate cut adjustment in the 2022 home health rule. The Partnership for Quality Home Healthcare of home healthcare leaders said the reduction was based on “flawed assumptions, data and methodology.” The bipartisan group of lawmakers urged CMS to carefully consider data and comments stakeholders submitted to last year’s rule. 

CMS implemented the new PDGM payment rule back in 2020. The Bipartisan Budget Act of 2018 required the new payment model to be budget-neutral — meaning it wouldn’t cost CMS any more or less. CMS could make payment adjustments in the first year based on the assumption that agencies might change their behavior in order to receive better payments. In 2020, CMS said payments under PDGM were 6% higher than under the previous payment model due to an increase in the weighted case mix. It delayed the behavioral rate cut until 2021 due to the impact of the COVID-19 pandemic.

CMS likely will release its proposed home health rule for 2023 at the end of June. The industry is hoping for a payment increase due to new inflationary pressures across the U.S. economy, which includes rising labor costs.