The Centers for Medicare & Medicaid Services is proposing a 2.2% reduction, or $375 million, in home health payments for calendar year 2024, the agency disclosed in an unpublished proposed rule that is expected to be officially published in the Federal Register on July 10.
The $375 million decrease reflects the effects of the Patient-Driven Groupings Model (PDGM) permanent behavioral rate adjustment of -5.1% ($870 million), a 2.7% payment update ($460 million) and an estimate 0.2% increase ($35 million) related to the effect of an updated FDL.
Home care providers reacted to the proposed rule with outrage.
“We continue to strenuously disagree with the budget neutrality methodology that CMS employed to arrive at the rate adjustments,” National Association for Home Care & Hospice President William A. Dombi said in a statement. “Overall spending on Medicare home health is down, fewer patients are receiving care, patient referrals are being rejected because providers cannot afford to provide the care needed within the payment rates, and providers have closed their doors or restricted service territory to reduce care costs.”
He referred to CMS’ budget neutrality methodology as “fatally flawed.”
Persisting with the methodology “will have a direct and permanent effect on access to care,” he said. “When you add in the impact of shortchanging home health agencies on an accurate cost inflation update of 5.2% over the last two years, the loss of care access is natural and foreseeable.”
Partnership for Quality Home Healthcare CEO Joanne Cunningham also voiced disapproval.
“The Partnership has repeatedly expressed concerns with CMS’ actions aimed at cutting Medicare home health reimbursement, primarily because of the serious impacts on access to the home-based care that patients and families overwhelmingly prefer,” Cunningham said in a statement. “The home health provider community is gravely concerned that CMS’s proposed actions for 2024 will only continue to degrade beneficiary access to home healthcare services.”
The Partnership noted that CMS reduced the standard payment amount for a 30-day home health episode from $2,031.64 in 2022 to $2,010.69 in 2023. Now CMS is proposing a further reduction to $1,974.38 for 2024. Overall, the Partnership estimates cuts will total more than $18 billion over the next decade.
Katie Smith Sloan, president and CEO of LeadingAge, which represents nonprofit home health and other long-term care providers, said the proposed 2.2% cut “will hurt.”
“Reduced payment will limit members’ ability to recruit, hire and retain staff in a very tight labor market — and without staff, there is no care,” she said in a statement. “This proposed rule contradicts the Biden administration’s oft-stated commitment to ensuring access to home and community-based care and threatens to harm those who most need home health: older adults and families.”
Providers now are turning to newly introduced legislation as a solution. In anticipation of a proposed rate reduction, last week, Debbie Stabenow (D-MI) and Susan Collins (R-ME) introduced S. 2.137, which would block CMS from implementing Medicare cuts related to PDGM. Half of the permanent behavioral adjustment, -3.925% ($635 million), went into effect this year.
This is a developing story. Please check back for updates.
