Home Health Agencies Blast Proposed 2023 Cuts, May Go To Hill

Home health providers are set to ask Congress for relief from CMS’ proposed pay cuts for home health agencies for 2023 — almost 8% of which are based on what the agency sees as changes in behavior tied to the 2020 pay system for the sector — as they say the cuts undermine patient care. CMS is also looking to find ways to recoup what it says are $2 billion in excess payments through the new payment system for 2020 and 2021.

“What we see in the proposed rule is the equivalent of a declaration of war against home health agencies and the 3 plus million patients they serve. To believe this will have no impact on patients is to live in a bubble,” Bill Dombi, president of the National Association for Home Care and Hospice, said in a statement.

He added that the group will be “taking all steps to protect the home health benefit as this proposed rule advances and have fully prepared for Congressional action and more.”

CMS on Friday (June 17) released the proposed 2023 home health pay rule, which includes an overall 4.2% pay cut compared to 2022. That includes an annual pay bump of just under 3%, which providers say isn’t high enough to take into account inflation and the rising costs of transportation to patients’ homes, as well as a permanent cut of about 7.7% to the 30-day pay rate for 2023 for a behavioral assumption adjustment under the Patient-Driven Groupings Model.

That pay system went into effect in 2020, and the Bipartisan Budget Act of 2018 required its implementation be budget neutral — and for CMS to take into account the role of changing provider behavior under the new model, which was meant to put less emphasis on therapy. The law also required CMS to annually determine the impact of behavior changes, including how expected behavior differs from actual behavior changes, from 2020 through 2026, and to make the necessary pay adjustments so providers are paid the same under PDGM that they would have been under the previous pay model.

Friday’s rule proposes a repricing method, which calculates what the Medicare program would have spent had the PDGM not been implemented in 2020 and 2021, assuming home health agencies would have provided home health services in the same way they do under the PDGM, compared to what actual home health expenditures were under the PDGM in 2020 and 2021. The result is the permanent 7.7% pay cut to the 30-day episode payment, and CMS also says it is getting feedback on a temporary cut to account for $2 billion in excess pay in 2020 and 2021.

CMS proposed to recalibrate the PDGM case-mix weights using 2021 data, as well.

“The stability of home health care is at risk because of CMS proposing the application of a fatally flawed methodology for assessing whether the PDGM payment model led to budget neutral spending in 2020 and later years,” Dombi said.

Joanne Cunningham, CEO of the Partnership for Quality Home Healthcare, said cuts of this magnitude will inevitably affect home health care access, especially in rural areas or those that are harder to reach.

Cunningham said the cut was not a surprise, given that CMS had given the industry a head’s up on its thinking in prior rules, but the sector was hopeful that home health agencies would see a different result. The partnership says the group is deeply disappointed that CMS didn’t take into account technical recommendations the group made, but instead appears to have stuck to its previous methodology for calculating home health pay adjustments, which the group says is flawed.

“While we will continue to analyze the impacts of the Proposed Rule and CMS’ methodology for rationalizing these adjustments, it is disappointing that the agency chose to disregard the thoughtful and data-driven technical recommendations the community has discussed with CMS,” added Cunningham in a statement.

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