Another Ominous Home Health Payment Threat That’s ‘Flying Under The Radar’

There have been plenty of conversations regarding the FY 2024 proposed home health payment rule from the U.S. Centers for Medicare & Medicaid Services (CMS).

However, one aspect of the rule that could be the “most impactful for home health providers moving forward” – according to VitalCaring President Luke James – is the temporary payment adjustments.

“I think it’s flying a little under the radar for some people,” James told Home Health Care News. “Certainly not for people who are heavily engaged in advocacy efforts – like NAHC, PQHH and others that are keeping a close eye on this – but this is something that everyone is going to have to come together on like never before.”


Led by James and CEO April Anthony, the Dallas-based VitalCaring’s network includes over 70 home health and hospice locations across six states.

Essentially, CMS continues to believe that home health providers were overpaid in 2020, 2021 and 2022 to the tune of $3.4 billion.

James said that because CMS chose not to implement all of their calculated permanent adjustments by 2023, its calculations will show an additional overpayment in 2023 once the agency has the full year’s worth of data.


“The temporary payment adjustment calculation will grow to be higher by next year’s rulemaking cycle,” James said.

All signs point to the agency attempting to claw that money back at some point via temporary payment adjustments.

Home health providers and advocates are already working hard to mitigate another 2.2% reduction to home health payments in 2024.

There has been senatorial help in this effort, with The Preserving Access to Home Health Act of 2023 introduced in late June. That has yet to be introduced in the House, however.

Additionally, the National Association for Home Care & Hospice has filed a lawsuit against CMS over the cuts.

“We continued our conversations, discussions and advocacy with CMS in hopes of seeing something happening in the proposed rule that was issued last week,” NAHC President William A. Dombi recently told HHCN. “When that rule came out, CMS absolutely stuck to its position on the budget neutrality calculation methodology. It was decided that we really had no other option left to try to deal with that other than to go to court.”

If the above-mentioned efforts are not successful, it won’t be just the short-term cuts that hurt home health providers. As James alluded to, CMS could also eventually claw back even more money from providers due to perceived “overpayments.”

In essence, if CMS’ methodology stands against industry, congressional and litigious efforts, more fuel could be thrown onto the rate-cutting fire down the line.

James pointed out that, in 2021, total expenditures paid out by CMS for home health services was about $17.1 billion.

Source: CMS

Total spending for home health services in 2022 was $16 billion, according to the Congressional Budget Office.

In its projections for 2024, the CBO estimates CMS spending will fall to $15 billion.

Source: CBO

“Using the $3.4 billion calculated temporary payment adjustment through 2022 compared against the CBO actual home health expenditures of $16 billion in 2022, that represents a 21.2% cut to annual Medicare home health spending,” James said. “If, as expected, the CMS calculated temporary payment adjustment grows in 2023 and the CBO baseline spend projection is accurate, then that cut as a percentage of annual Medicare home health spending only grows higher.”

Even if the cut does not get higher, 21.2% of 2022 spending is more than double the impact of the full permanent payment adjustment CMS has calculated and implemented through 2022, he added.

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