The Centers for Medicare and Medicaid Services has tossed a plan to reduce home health reimbursements by $810 million next year and will give providers a 0.7% pay increase that amounts to $125 million.
CMS published on Monday the final rule setting Medicare fees for home health services next year. Home health industry groups strenuously objected to the proposed cuts and threatened to sue if CMS carried them out.
In a proposed rule published in June, CMS contended the cuts were necessary to correct $2 billion overpayments made in 2020 and 2021 while it implemented the Patient-Driven Groupings Model, a new payment methodology, in 2020. The Patient-Driven Groupings Model bases reimbursement on patient characteristics instead of the number of therapy hours provided.
Instead, CMS will phase in payment reductions to anticipate home health providers billing for the highest-paying codes under the Patient-Driven Groupings Model. “We recognize the potential hardship of implementing the proposed full permanent adjustment in a single year,” the agency wrote in the final rule.
The Partnership for Quality Home Healthcare is reviewing the final rule, according to a spokesperson. Industry groups including the partnership have supported a bipartisan bill, the Preserving Access to Home Health Act of 2022, which would delay home health payment cuts until 2026.
The final rule also caps the amount CMS may decrease Medicare wage index payment reductions to 5%. In addition, the regulation establishes the benchmarking framework for the expanded Home Health Value-Based Purchasing Model. Regardless of whether a home health agency became Medicare certified, they will use Jan. 1, 2022 as their baseline year.
CMS also is requiring home health agencies to submit outcome and assessment data for non-Medicare and non-Medicaid patients starting in 2025. CMS previously suspended data collection.