The Centers for Medicare & Medicaid Services is proposing a 2.9% home health payment update ($560 million) for calendar year 2023. This update is expected to lead to a 4.2% decrease ($810 million) in Medicare payments, the agency said Friday.
The update equates to an estimated 6.9% decrease that reflects the “effects of the proposed prospective, permanent behavioral assumption adjustment of -7.69% ($1.33 billion decrease), and an estimated 0.2% decrease that reflects the effects of a proposed update to the fixed-dollar loss ratio (FDL) used in determining outlier payments ($40 million decrease),” CMS said.
CMS also is proposing a 5% cap on negative wage index changes, regardless of the underlying reason for the decrease, for home health agencies.
National Association for Home Care & Hospice President William Dombi told McKnight’s Home Care Daily Pulse the payment cut is a big disappointment, saying it puts the stability of home health agencies at risk. He said CMS used a fatally flawed methodology for assessing whether the Patient Driven Groupings Model (PDGM) led to budget-neutral spending in 2020.
“With significantly rising costs for staff, transportation and more, home health agencies across the country cannot withstand the impact of the proposed rate cut,” Dombi said. “Reliable analyses proves that PDGM underpaid home health agencies. We will be taking all steps to protect the home health benefit as this proposed rule advances and have fully prepared for congressional action and more.“
The Partnership for Quality Home Healthcare also expressed dismay with the behavioral assumption adjustment of -7.69%.
“Considering that access to home-based care has become increasingly important to the health and safety of American seniors, it is very troubling that CMS would propose such steep rate cuts for next year and potentially even deeper cuts in the future,“ Joanne Cunningham, CEO of the Partnership, said. “If implemented as proposed, this payment adjustment will jeopardize the stability of this vital sector and risk seniors’ access to Medicare home health services.”
CMS commented that it used a repricing method to come up with the 7.69% behavioral assumption cut. The repricing method calculates what the Medicare program would have spent had the PDGM not been implemented in CYs 2020 and 2021, “assuming that HHAs would have provided home health services in the same way they do under the PDGM, compared to what actual home health expenditures were under the PDGM in CY 2020 and CY 2021.”
CMS noted that it is not proposing a temporary payment adjustment in CY 2023. But it is soliciting comments on how best to implement a temporary payment adjustment, “estimated to be $2 billion for excess estimates in CYs 2020 and 2021.”
Home health providers are accustomed to sour news related to PDGM payments. The home health final rule for 2022 included a 4.36% behavioral rate cut affiliated with PDGM.
Among other changes in the 2023 proposed rule, CMS is proposing to end the suspension of non-Medicare/non-Medicaid data for home health agency patients. And for the expanded Home Health Value-Based Purchasing Program (HHVBP), CMS wants to change the HHA baseline year from CY 2019 to CY 2022 for existing HHAs with a Medicare certification date prior to Jan. 1, 2019, and from 2021 to 2022 for HHAs with a Medicare certification date prior to Jan. 1, 2022, starting in the CY 2023 performance year.
It also is seeking stakeholder feedback on its work around health equity measure development for the Home Health QRP and the potential future application of health equity in the Expanded HHVBP model’s scoring and payment methodologies.
This is a developing story. Please check back for updates.