Home health agencies protest proposed cuts to payment rates in 2023

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Home health agencies wrote to the Centers for Medicare and Medicaid Services to protest the proposed 4.2% payment rate reduction in the 2023 Prospective Payment System Rate Update for Home Health and the proposed rule for home infusion therapy services.

The Partnership for Quality Home Health Care and LeadingAge denounce proposed permanent 7.69% reduction in Medicare payments to Medicare home health services beginning in 2023, plus clawback cuts totaling $2 billion starting in 2024 for services already provided in the first two years of the pandemic.

The proposed cuts equate to a $1.33 billion cut in home health care in 2023 alone, with total cuts of up to $18.15 billion over the next 10 years, the Partnership said.

LeadingAge told CMS that “if finalized as proposed, the reduction in Medicare home health payments by a total of 4.2%, including a 7.69% negative base payment adjustment, associated to an effort to claw back an additional $2 billion from home care providers, will have a devastating effect on seniors who rely on these services.


The Partnership informed CMS of the legal issues with the proposed rule and said it hoped the legal deficiencies identified would be addressed in the final rule.

He said he hired outside counsel from the law firm King & Spalding to assess the nature and extent of any legal vulnerabilities in the proposed rule that may violate separate statutory orders from Congress and other areas where it may be vulnerable to challenges under administrative law.

Partnership letter denounces rising labor and care delivery costs, technical issues with CMS payment methodology, CMS’s lack of transparency in data and information, and ongoing impacts of the COVID-19 pandemic. It includes a study of the 2022 work of Dobson | DaVanzo & Associates citing an insufficient supply of clinicians and staff turnover as well as unexpected salary increases and inflation.

LeadingAge asks CMS to delay permanent payment reductions for at least one year and not to implement any behavior-based temporary retrospective adjustments. CMS should not use behavioral assumptions to inform temporary retrospective adjustments until a methodology is developed to target adjustment to providers who are truly behavioral change outliers, the organization said. .

Congress introduced the Preserving Home Health Care Access Act of 2022, which would delay the 7.69% payment reduction proposed for 2023 and block additional clawback reductions that are scheduled to begin as early as 2024, according to the Partnership.


In the proposed rule, released in June, CMS estimated that Medicare payments to home health agencies in 2023 would decline a total of -4.2%, or -$810 million, from 2022.

This decrease reflects the effects of the proposed 2.9% update percentage of the home health care payment (an increase of $560 million), an estimated decrease of 6.9% which reflects the effects of the proposed prospective and permanent adjustment to the behavioral assumption of -7.69% (a decrease of $1.33 billion). and an estimated decrease of 0.2% reflecting the effects of a proposed update to the fixed dollar loss ratio used to determine outlying payments (a decrease of $40 million).

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