November 1, 2023

Medicare Hikes, Then Trims, Home Health Payments for 2024

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Bloomberg Government

Medicare payments to home health agencies will increase 0.8%, or $140 million, in 2024 under a final rule released Wednesday by the Biden administration.

The payment rule (RIN: 0938-AV03) from the Centers for Medicare & Medicaid Services calls for an inflationary increase of 3%, or $525 million, next year, while also imposing a 2.6% permanent pay cut of $455 million based on the assumption that home health agencies will alter their future billing and coding activity to maximize reimbursements. The rule also finalizes a 0.4%, or $70 million, increase in the fixed-dollar loss ratio for outlier payments, in which Medicare helps offset provider losses due to extraordinarily expensive cases.

But the rule also determined that the CMS previously paid home health agencies more under a new payment system adopted in 2020 than it would have under the old system. To recoup those past overpayments, the agency is finalizing a pay cut of roughly 2.9% in 2024.

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