February 29, 2024

Home Health Leaders Call on CMS to Address Threats to Home Health Care and Halt Reimbursement Cuts

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WASHINGTON, DC – The Partnership for Quality Home Healthcare (the Partnership), together with the National Association for Home Care & Hospice (NAHC), sent a letter to the Centers for Medicare & Medicaid Services (CMS) this week calling for an end to the continued cuts to Medicare home health reimbursement rates. Years of ongoing rate reductions, including the most recent -2.89% cut for CY2024, continue to pose a critical threat to patient access and care delivery in the home setting—a critical benefit utilized by millions of Medicare beneficiaries every year.

In their letter to CMS, the Partnership and NAHC outline the negative impact to patient access that successive cuts related to the Patient Driven Groupings Model (PDGM) have caused. The letter cautions against another cut that CMS projected for CY2025 in last year’s final home health rule, as well as CMS’ plan to “clawback” billions of dollars through “temporary adjustments,” which threaten to disrupt the nation’s home health system by compounding the cuts. “The new system is not budget neutral, and CMS’ rate setting methodology has produced successive significant reductions in home health payment rates totaling $20 billion in aggregate expenditures to date,” states the joint letter to CMS Administrator Chiquita Brooks-LaSure.

The groups highlight the extensive consequences of these rate cuts, as millions of Medicare beneficiaries rely on the Medicare home health benefit for skilled nursing and rehabilitation services in the comfort and safety of their homes to recover from a hospital stay or manage a serious chronic condition.

“Both NAHC and the Partnership fear that if CMS does not act to curb these harmful reimbursement cuts, the resulting erosion of the Medicare home health benefit will mean that millions of beneficiaries will be unable to receive critical health services in the home and have no alternative than to seek care in higher cost institutional settings,” the letter states.

This letter calls for a suspension of further payment reductions and engagement with stakeholders to establish a fair and sustainable payment system that reflects the increasing costs of care and addresses the specific needs of Medicare beneficiaries. The Partnership urges CMS to reconsider its approach for the fiscal year 2025, emphasizing that the continued financial pressure, exacerbated by inflation and economic factors, is making it increasingly difficult for providers to maintain the quality and scope of services, especially in rural areas.

“We ask that CMS use its existing authority and suspend further reductions to home health payments in CY 2025 and allow the annual payment update to be applied in a way that addresses increases in the cost of care. CMS should engage with home health stakeholders and Congress to resolve the current crisis and downward spiral in reimbursement. This will help to stabilize the home health benefit in the near term for both providers and the beneficiaries that depend on it every day and allow for a long-term solution that reverses the ongoing erosion of this important Medicare benefit,” wrote the Partnership and NAHC.

To read the full PQHH-NAHC letter to CMS, click here.