The Centers for Medicare and Medicaid Services (CMS) has released the 2024 proposed rule for home health payment rates. The proposed rule includes significant changes in reimbursement, including deep cuts. While the rule will not be finalized until November 2023, it’s important for providers to understand the proposed rule’s content and prepare for potential change.
Shortly after the proposed rule was announced, the National Association for Home Care and Hospice (NAHC) filed a lawsuit against CMS and the U.S. Department of Health and Human Services arguing that the cuts and the methodology used to determine them are unlawful. That lawsuit is ongoing and will likely not have an immediate impact on the proposed rule, so providers should prepare for the rule to go into effect as it stands.
Arlene Maxim, RN, HCS-C, Axxess’ Senior Vice President of Clinical Services, answered some common questions about the proposed rule and how it may affect the home health industry.
EG: What specific payment cuts are included in this proposed rule?
AM: Over the past few weeks, we have heard about the deep cuts CMS intends to make in the already depleted funds (and rising costs in care) within the care at home industry. We are currently facing a $375 million cut to all Medicare payments in 2024. That would be a 2.2% cut for Medicare fee-for-service payments.
Per CMS: “This rule proposes a permanent, prospective adjustment to the CY 2024 home health payment rate to account for the impact of the implementation of the Patient-Driven Groupings Model (PDGM). This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the implementation of the PDGM and 30-day unit of payment as required by the Bipartisan Budget Act of 2018.”
EG: What was MedPAC’s role in the creation of this rule?
AM: The Medicare Payment Advisory Commission (MedPAC) is an independent congressional agency established to advise the U.S. Congress on issues affecting the Medicare program. Among its responsibilities MedPAC makes recommendations to Congress on Medicare’s traditional fee-for-service program, such as increases or decreases in the Medicare payment structure.
In a report released in March of 2023, analysis by the committee resulted in this overall MedPAC finding: “Medicare’s payments for home health services are too high, and these excess payments diminish the service’s value as a substitute for more costly services.”
EG: How does MedPAC determine these findings?
AM: One of the documents used in the analysis of our industry are the cost reports we submit every year. Prior to the home health prospective payment system (PPS), cost reporting was a meticulous process. Most providers hired the best and the brightest accountants to complete those reports since our payment depended on accurate, specific and comprehensive data collected during the previous year.
When PPS began in 2000, cost reports were no longer used for payment of any kind. While home health organizations were still required to submit them, the accuracy of the reports was rarely challenged. As a result, the industry often turned to the most cost-effective cost report preparers – those with the lowest rates – and rarely paid attention to the final content. This practice, in part, has cost us dearly.
MedPAC uses the data in every one of these reports for their analysis of our industry. While this is not the only information relied on, the degree of significance cannot be ignored. For years, independent consultants and accountants have warned us about this practice and the consequences associated with sloppy cost reporting.
EG: How should home health providers change their practices to provide better data?
AM: With value-based purchasing (VBP) risks coupled with the devastating possibilities from these major cuts, we have to recognize “the elephant in the room” and how we must assess our individual operations policies. One place to start is investing in the services of the many talented cost report preparers. It is important that we assess the data we are submitting and the toll it may have taken in CMS making these deep cuts.
EG: How can providers learn more about the proposed rule and upcoming changes?
AM: Axxess is hosting a webinar on Wednesday, August 3, to offer a high-level financial and clinical analysis of the major provisions in the proposed rule. We will discuss the proposed rule’s impact on providers and access to patient care, legislative and advocacy strategies, and clinical and operational action items home health providers can implement today to help minimize the looming financial impact on your business. Register for the webinar today.
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