On Oct. 31, 2022, the Centers for Medicare & Medicaid Services (CMS) released the Home Health Prospective Payment System (HHPPS) Final Rule for Calendar Year (CY) 2023, which included a permanent 7.85% payment cut to Medicare home health services.
While the Final Rule offered some minimal, short-term relief by instituting a phased-in payment permanent reduction of 3.925% for CY 2023, the cuts over the next 10 years are serious and will have significant implications and consequences for access to Medicare services for patients. In total, these cuts will reach over $18.15 billion in the next ten years. CMS also still plans to apply at least $3.5 billion in “clawback cuts” for Medicare services provided to patients during the COVID-19 pandemic.
To read the Partnership’s statement on the Final Rule, click here.
The home healthcare community is asking Congress to help stop additional cuts to reimbursement for Medicare home health services, which could be announced in mid-Summer by CMS in its yearly proposed payment rule.
Even with half of the expected cut implemented this year, Medicare home healthcare access is already showing signs of distress.
A major red flag is the referral rejection rate, which is the rate at which a home health agency -- due to workforce shortages or capacity constraints -- rejects a referral from a hospital for post-acute home healthcare. Alarmingly, the referral rejection rate for home health increased from 49% in 2020 to 71% in 2022. This means that fewer Medicare beneficiaries are able to access home health services, and hospitals are not able to smoothly transition patients to more appropriate care settings that are preferred by beneficiaries and less costly for Medicare. Further reimbursement reductions will compound these access problems, leading to more costly care and worse outcomes for patients.
Despite these signs of distress in access, the home healthcare community is bracing for the full 7.85% cut to be imposed on providers in January 2024. Cuts of this magnitude will threaten the ability of 3.2 million Medicare beneficiaries to receive life-saving clinical care in the home each year.
Congress must tell CMS to stop additional cuts to home health in 2024.
Recent polling, conducted by Morning Consult on behalf of the Partnership, found widespread and deep support for Medicare home healthcare services and the need to prevent Medicare home health cuts. Notably:
- 97% of Medicare beneficiaries want the federal government to maintain Medicare coverage for at-home health care services.
- 65% of voters oppose CMS implementing a cut to Medicare home health services.
- 92% of registered voters believe it is important for the federal government to maintain Medicare coverage for at-home health care to allow seniors to recover and rehabilitate at home. There is also wide bipartisan agreement among registered voters with 94% of Democrats and 93% of Republicans expressing their support for the Medicare home health program.
- Three in five voters (60%) and more than three in four (76%) voters 65+ would be less likely to support their Member of Congress if they were in favor of making these cuts to Medicare home health services.
More than three in four voters (78%) believe it is important for Congress to pass legislation to push back on CMS’ proposed payment cuts to Medicare home health services, including nine in ten voters 65+ (88%), Medicare beneficiaries (88 percent), and caregivers for 65+ adults (89%).