Home health agencies would lose $810 million under CMS’s proposed rule

The proposal “will protect the sustainability of the Medicare program for future generations,” CMS says.

Medicare payments to home health agencies are estimated to decline 4.2% — or $810 million — from 2022, based on policies under a rule proposed by the Centers for Medicare and Medicaid Services (CMS).

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

CMS this week released the proposed Prospective Payment System (PPS) Rate Update Rule for calendar year 2023, which would update Medicare payment policies and rates for home health agencies. . This rule includes proposals and routine updates to the Medicare Home Health PPS and home infusion therapy service payment rates for calendar year 2023, consistent with existing regulatory and statutory requirements.

This rule also provides a permanent and budget-neutral approach to smooth year-to-year variations in the pre-floor/pre-reclassified hospital wage index to achieve the policy objective of increased wage predictability. home care payments.

Specifically, this rule proposes a permanent cap of 5% on negative changes in the wage index, regardless of the underlying reason for the decrease, for home health agencies.

The rule also proposes a recalibration of customer weights. Each of the 432 payment groups under the Patient-Oriented Grouping Model (PDGM) is associated with a case group weight and a Low Utilization Payment Adjustment (LUPA) threshold, and CMS policy consists of recalibrating case cluster weights and LUPA thresholds annually using the most comprehensive usage data available at the time of rule development.

In this proposed rule, CMS proposes to recalibrate case group weightings, including functional levels and comorbidity adjustment subgroups, and LUPA thresholds using 2021 data to more accurately pay types of patients that home health agencies serve.

The actions in this proposed rule would “help improve patient care and also protect the sustainability of the Medicare program for future generations by serving as a responsible steward of public funds,” according to CMS.

Carol Davis is the Nursing Editor at HealthLeaders, an HCPro brand.