Partnership Submits Comments to CMS on Proposed HH PPS Rule for CY 2023

WASHINGTON – The Partnership for Quality Home Healthcare submitted detailed comments to the Centers for Medicare & Medicaid Services (CMS) in response to the Proposed Rule to update the Home Health Perspective Payment System (HH PPS) for CY 2023. The Partnership’s comments raise a comprehensive set of concerns with Medicare’s proposed policy updates for 2023, which include a permanent 7.69 percent payment cut to Medicare home health services beginning in 2023, as well as clawback cuts totaling $2 billion beginning in 2024 for services already provided during the first two years of the pandemic and the potential for additional cuts in subsequent years. According to estimates, the proposed cuts equate to a $1.33 billion cut from home healthcare in 2023 alone, with the total cuts reaching up to $18.15 billion over the next ten years.

The Partnership’s letter includes specific comments and recommendations related to CMS’ proposed changes to Medicare home health. Specifically, the letter highlights key factors that influence the analysis of the proposed rule, including increased labor and care delivery costs, technical concerns with CMS’ payment methodology, CMS’ lack of transparency in data and information, and ongoing COVID-19 pandemic impacts. Further, the Partnership offers alternative methodological approaches to home health payment, which it believes results in a more accurate and less biased approach.

“CMS’ proposed permanent and temporary adjustments will be devastating to home health providers and the patients they serve, particularly at a time when the Medicare program and its beneficiaries need a viable and sustainable benefit for in-home skilled services for both fee-for-service and Medicare Advantage,” the comment letter states. “The Partnership recommends that CMS withdraw its proposal applying permanent and temporary adjustments to the home health payment rates in CY 2023 and propose a new methodology in future rulemaking, such as the first alternative outlined in this comment letter, that aligns with the statutory requirements.”

The Partnership’s comments also include a 2022 labor study from Dobson|DaVanzo & Associates, LLC, which concludes that home health providers are currently facing increased demand for services, severe staffing shortages due to an insufficient supply of clinicians and staff turnover from employer competition, and new challenges resulting from unexpected wage increases and inflation.

“With inflationary pressures from the economy and staffing challenges within the healthcare sector, home health agencies have limited options to respond. As the [DDA] study points out, a majority of Partnership members are faced with having to turn away referrals due to the inability to maintain staffing. To address this, our members have had to increase hourly rates and offer competitive compensation through offering incentives, such as signing bonuses, performance bonuses, tuition assistance, and student loan payments,” the comment letter states.

As part of its comprehensive analysis of the proposed rule, the Partnership also engaged outside counsel from the King & Spalding law firm to assess the nature and extent of any legal vulnerabilities within it. In so doing, counsel noted several areas where the proposed rule violates distinct statutory commands from Congress and other areas where it may be vulnerable to challenges under administrative law. The Partnership is advising CMS of these concerns in its comments and is hopeful that the legal deficiencies identified will be corrected in the final rule.

“We urge CMS to address what we believe to be fundamental legal and methodological flaws in its assessment of budget neutrality for PDGM, to ensure that payments in 2023 and beyond will support Medicare beneficiaries’ access to the skilled services they need in their homes. CMS’ proposed approach results in an unstable and adverse reimbursement environment for the next decade that will undermine CMS’ own efforts to advance health equity and quality through value-based purchasing, post-acute payment reform, and other initiatives,” the letter concludes.

To address the cuts proposed by Medicare, bipartisan lawmakers in Congress have introduced the Preserving Access to Home Health Act of 2022 (S.4605/H.R. 8581), which would delay the 7.69 percent payment cut proposed for 2023 and block the additional clawback cuts that are set to begin as soon as 2024, allowing for continued work between the industry and CMS to address concerns related to the CMS approach to determining budget neutrality of the home health payment system. The legislation is strongly supported by the Partnership and leaders across the home health sector.

To read the Partnership comment letter and supporting documents, click here.

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