dollar bill being cut; the proposed rule by CMS would cute rates by nearly 10%

In a pre-comment letter to the Centers for Medicare & Medicaid Services, two major home care organizations sought to “sound the alarm” for the agency about the impact of proposed home health reductions. They outlined the perceived damage that proposed reimbursement cuts will have on agencies’ ability to provide quality care to patients.

The proposed cuts “must not be finalized,” the National Association for Home Care & Hospice (NAHC) and the Partnership for Quality Home Healthcare said in the letter dated July 28 to CMS Administrator Chiquita Brooks-LaSure. “Doing so risks irreparable fracturing of the foundation of skilled home healthcare in America and the erosion of seniors’ ability to receive care in their home.”

In June, CMS proposed a 2.2% reduction, or $375 million, in home health payments for calendar year 2024. As part of this, it includes a 5.653% permanent rate cut for 30-day period payments related to the transition to the Patient-Driven Groupings Model (PDGM) payment system, which took effect in 2020. A 3.925% reduction went into effect in 2023. With the growing cost of providing care, an expensive economy and a dire shortage of home care workers, the organizations predict care access and quality will take a severe hit.

To illustrate their concerns, NAHC and the Partnership offered statistics that show the increasingly tough environment that HHAs operate in. PDGM, in their estimation, has reduced home care access, and referral rejections reached their highest point ever in December 2022, 76%. Just over 12% of rejected referrals are due to staffing issues, according to the letter. 

“These patients who are not taken into the care of an HHA do not simply disappear,” the groups said in the letter. “Rather, they often are instead directed to institutional settings that cost far more and are typically a non-preferred care setting. Patients who cannot access home health may also go home without adequate support.”

Citing research from healthcare analysis firm CareJourney, they noted that home health services have shown to lead to lower mortality rates and rates of readmission, compared to patients who do not receive needed home care following hospital discharge. 

On July 6, NAHC sued CMS for its methodology in determining the rate adjustment. The letter reasserts that the impact of proposed cuts, as well as the shift to PDGM and growing Medicare Advantage enrollment, will further limit HHAs’ ability to provide patients needed care.

“NAHC and the Partnership strongly encourage CMS to exercise discretion to reverse, delay, or at the very least significantly moderate the cuts it has proposed for CY 2024 and to work together with providers to ensure access to a sustainable home health benefit for beneficiaries,” the letter stated in its conclusion. “The future viability of the Medicare Home Health Program depends on it.