[Updated] CMS Proposes 2.2% Decrease To Home Health Provider Medicare Payments in 2024

The U.S. Centers for Medicare & Medicaid Services (CMS) published its FY 2024 home health proposed payment rule Friday.

For next year, CMS is proposing to decrease aggregate home health payments by 2.2%, or an estimated $375 million less compared to 2023 levels. The draft is expected to be officially published in the Federal Register on July 10.

The news is an expected but disappointing development for home health providers.


“The $375 million decrease in estimated payments for CY 2024 reflects the effects of the CY 2024 proposed home health payment update percentage of 2.7% ($460 million increase), an estimated 5.1% decrease that reflects the effects of the permanent behavioral assumption adjustment (-$870 million) and an estimated 0.2% increase that reflects the effects of an updated FDL ($35 million increase),” CMS wrote in the draft.

A -3.925% permanent rate adjustment was already implemented in 2023.

Yet another round of payment cuts are likely to have devastating effects on the home health industry at large.


“We continue to strenuously disagree with the budget neutrality methodology that CMS employed to arrive at the rate adjustments,” William A. Dombi, the president of the National Association for Home Care & Hospice (NAHC), said in a statement shared with Home Health Care News. “Overall spending on Medicare home health is down, fewer patients are receiving care, patient referrals are being rejected because providers cannot afford to provide the care needed within the payment rates, and providers have closed their doors or restricted service territory to reduce care costs. If the rate was truly budget neutral, we would not see these actions occurring.”

In order to curb future rate cuts – including in 2024 – Sens. Debbie Stabenow (D-Mich.) and Susan Collins (R-Maine) introduced the Preserving Access to Home Health Act of 2023 earlier this month.

If passed, the bill would strip CMS of some of its payment-rate setting power. It would also force The Medicare Payment Advisory Commission (MedPAC) to consider Medicare Advantage (MA) payment rates in its reports.

“We now turn to Congress to correct what CMS has done and prevent the impending harm to the millions of highly vulnerable home health patients that depend and will depend in the future on this essential Medicare benefit,” Dombi said.

Other takeaways

The proposed rule draft, released on Friday morning, may have been prematurely released. A source told HHCN that lawmakers were unaware of the rule’s specifics when it was posted.

Generally, CMS sends background memos and other materials to them beforehand.

Outside of the payment specifics, CMS also proposed changes to the Home Health Value-Based Purchasing (HHVBP) Model.

Specifically, the agency is proposing to remove five and add three quality measures to the applicable measure set beginning in 2025. The three additions are around discharge function scores, discharges to the community and potentially preventable hospitalizations during home health care coverage.

CMS is additionally proposing changes to HHVBP’s baseline year.

“We are proposing to update the Model baseline year from CY 2022 to CY 2023 starting in the CY 2025 performance year to enable CMS to measure competing HHA’s performance on benchmarks and achievement thresholds that are more current for all applicable,” CMS wrote.  

There are also proposed changes to wound care included, specifically regarding the use of disposable devices.

Beginning in 2024, payment for those devices would be made separately from the nursing and therapy services associated with furnishing the device.

“Claims for the separate payment amount of an applicable dNPWT device using Healthcare Common Procedure Coding System (HCPCS) code A9272 would be reported on claims submitted using the TOB 32x,” NAHC wrote in an analysis of the rule. “That is, claims with a date of service on or after January 1, 2024 for an applicable dNPWT device will no longer be submitted on TOB 34X.”

Home health providers were also hoping that CMS would make good on what they believe were forecast errors in 2022 and 2023. CMS, however, has been unwilling to rectify those errors.

“That error will impact base rates permanently if not corrected,” NAHC wrote.

Reactions to the rule

Home health advocates were universally upset with the proposed rule on Friday.

LeadingAge CEO Katie Smith Sloan called the rule proposal a “direct contradiction” to the Biden administration’s stated goal of ensuring home-based care access to seniors.

“Our mission-driven, nonprofit members are navigating continued, substantial challenges: workforce shortages and inflation-fueled price hikes that increase operating costs,” Sloan said in a statement shared with HHCN. “While in this proposed rule CMS did not include any recoupments from 2020 and 2021 payments, the agency did calculate a market basket rate update using cost report data from 2021 – and in doing so failed to capture the impact of the past 24 months’ increases in labor, transportation and other business-related costs. Providers’ operating environment is tough. A 2.2% cut will hurt. Reduced payment will limit members’ ability to recruit, hire, and retain staff in a very tight labor market – and without staff, there is no care.”

Joanne Cunningham, the CEO of the Partnership for Quality Home Healthcare (PQHH), also pointed out that CMS’ payment rate updates are not keeping up with home health agencies’ rising operating costs.

“CMS’s market basket projections are not keeping up with the real-world costs to home healthcare providers, and home health agencies cannot absorb compounding cuts in this environment,” she said in a statement shared with HHCN. “This latest round of proposed cuts will further exacerbate an already fragile economic environment in the home health sector.”

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