The National Association for Home Care and Hospice (NAHC), the largest association of home care providers, has filed a lawsuit against the Department of Health and Human Services and the Centers for Medicare and Medicaid Services (CMS) to block Medicare rate cuts that are expected to total over $18 billion over the next decade.
Last Friday, CMS proposed a 2.2% reduction ($375 million) in Medicare payments for calendar year 2024. The reduction includes a 5.653% permanent rate cut for 30-day period payments related to the transition to the Patient-Driven Groupings Model payment system, which took effect in 2020. That compounds a 3.925% permanent rate reduction ($635 million) that took effect in 2023.
NAHC argues CMS’ calculations are flawed, and that the rate adjustment will worsen home care staffing shortages and patients’ access to care.
“We have done everything possible to get Medicare to understand the disastrous consequences of its actions,” said William A. Dombi, president of NAHC, in a statement. “We have presented hard facts, deep legal analyses and extensive data to Medicare that demonstrate the errors in its policies to no avail. As a last resort, we have filed this lawsuit to protect Medicare beneficiaries and the home health agencies that care for them.”
“Home health agencies again must withstand billions of dollars in payment cuts as cost of care continues to rise and still be expected to deliver the care to which our patients are entitled to as a Medicare benefit,” Ken Albert, NAHC chairman and CEO of Androscoggin Home HealthCare + Hospice, added in a statement.
The lawsuit, which has been filed in the U.S. District Court for the District of Columbia, seeks declaratory and injunctive relief including a reversal of the rate adjustments in the 2023 rule and requirement that Medicare implement the budget neutrality mandate consistent with the law.
‘Survival action’
In an interview with McKnight’s Home Care Daily Pulse on Thursday, Dombi called the lawsuit a “survival action” following last week’s proposed rule.
“It’s always a last resort to go to the courts, particularly against a government agency like Medicare,” he said. “While we continue to work the regulatory and the congressional forums available to us, we felt this was necessary to provide an effort at protection, because we see the home health benefit dwindling because of these rate cuts, these illegal and invalid rate cuts.”
The suit follows the recent introduction of a Senate bill, S. 2127, which would stop CMS from implementing Medicare cuts related to PDGM last year and this year.
Dombi said the cuts are antithetical to a policy swing toward home care.
“Everything from a hospital-at-home demonstration program on through indicates this is finally a recognition of the healthcare services at home,” he said. “So along with that big policy approach — that switch to care in the home — we see Medicare cutting and cutting and cutting.”
He acknowledged he was disappointed but not surprised about the reductions in the proposed rule.
“An $870 million payment rate cut in one year?” he asked hypothetically, referring to a proposed 5.1% decrease reflecting the permanent behavioral rate adjustment for all payments. “I don’t know how they can expect the home health community to withstand that … but we’re not going to be standing idle.”
This is a developing story. Please check back for updates.
