dollar bill being cut

The Centers for Medicare & Medicaid Services said today it is implementing a 3.925% behavioral rate cut, a $635 million decrease, for calendar year 2023. This represents half of the full permanent adjustment of -7.85% (-7.69% in the proposed rule).

“We note that the overall impact of the -3.925% permanent behavioral assumption adjustment is -3.5%, as the permanent adjustment is only made to the 30-day payment rate and not the Low Utilization Payment Adjustment (LUPAs) per visit payment rates,” CMS said. 

CMS estimates that Medicare payments to home health agencies next year will increase in the aggregate by 0.7%, or $125 million, compared to CY 2022, based on the finalized policies. This increase reflects the effects of the 4% home health payment update percentage ($725 million increase), an estimated 3.5% decrease that reflects the effects of the prospective permanent behavioral assumption adjustment of -3.925% ($635 million decrease) that is being phased-in, and an estimated 0.2% increase that reflects the effects of an update to the fixed-dollar loss ratio (FDL) used in determining outlier payments ($35 million increase).

The final Medicare home health rule released today also addresses the comments received on the best approach to implement the statutorily required temporary payment adjustment for calendar years  2020 and 2021, CMS said. 

“Those comments will be considered for future rulemaking,” the agency said. 

Here are other aspects of the final rule:

  • It finalizes a permanent, budget-neutral 5% cap on negative wage index changes (regardless of the underlying reason for the decrease) for home health agencies to smooth year-to-year changes in the pre-floor/pre-reclassified hospital wage index.
  • For the Home Health Value-Based Purchasing (HHVBP) model, it is changing the home health agency 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; 
  • CMS is ending the temporary suspension of OASIS data collection on non-Medicare/non-Medicaid HHA patients. HHAs will be required to submit all-payer OASIS data for purposes of the HH Quality Reporting Program (QRP) beginning with the CY 2027 program year, with two quarters of data required for that program year.
  • It finalizes the home infusion therapy payment rate update for CY 2023 at 8.7%.

The story is developing. Please check back for updates.