Dollar being cut with scissors

A routine Centers for Medicare & Medicaid Services webinar Wednesday with home health providers put the CMS on the hot seat over an upcoming behavioral adjustment for home health next year.

During the virtual overview of the home health final rule, agency owners and stakeholders excoriated CMS Home Health and Hospice Division Director Brian Slater over the 7.85% behavioral cut, which partially went into effect in the current year. They argued the second half of the cut should be shelved due to rising inflation and labor costs.

“It doesn’t seem like the rate update addressed all the massive cost increases that have been occurring since 2021 and even in 2022,” Steven Landers, MD, president and CEO of Visiting Nurses Association Health Group, said during a question-and-answer session following the presentation. “For example the IRS mileage rate that we use to reimburse our clinicians — and home health clinicians drive tens of millions of miles a year — went up 12% from last year to this year. Labor costs for nurses and home health aides are up and in some places you can’t even find folks.”

In January, CMS implemented a 3.925% behavioral rate cut, a $635 million decrease, for calendar year 2023. The reduction represented half of the full permanent adjustment of -7.85%. Slater explained that an actuary estimates the costs of inputs that will help determine home health rates and CMS “adopts what number” the actuary puts forward. 

Partnership for Quality Home Healthcare CEO Joanne Cunningham urged CMS officials following the presentation to get more robust information about how rising inflation and staff shortages are affecting home health agencies. Cunningham told McKnight’s Home Care Daily Pulse staffing shortages due to rising labor costs are making it harder for hospitals to release patients to home health, driving up overall healthcare costs.

“We are seeing a larger percentage of home health firms increasingly denying cases,” Cunningham said. “We are seeing an uptick each quarter of home health agencies that are not able to take those cases largely because of staff.”

The National Association for Home Care & Hospice weighed in on the webinar. It criticized CMS for failing to demonstrate how changes in provider behavior affected spending under the Patient-Driven Groupings Model (PDGM) and the calculation of revised payment rates for calendar year 2023.

“CMS must withhold any further rate cuts to avoid the flaws of PDGM combining with uncontrolled cost inflation to destroy access to one of the few Medicare benefits that brings savings to the Medicare program,” NAHC President William Dombi said in a statement.

Cunningham said imposing the additional cut would not be a “wise policy position” given constraints on home health agencies already. However, she was doubtful CMS will shelve the cut.

Related Articles