Home Health Providers Take Aim At CMS’ ‘Black Box’ Approach To Policymaking

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Enough time has passed since the CY 2024 home health payment rule was finalized for providers to dive into its details, mull them over and respond.

Though the rule is more favorable than the proposal the U.S. Centers for Medicare & Medicaid Services (CMS) first introduced in June, home health providers are not pleased with the final outcome.

CMS didn’t address – and in some cases furthered – the concerns that many providers and industry stakeholders raised in the months and weeks leading up to the rule’s finalization.


The rule comes with a 0.8%, or $140 million, aggregate increase to home health payments. In June, CMS proposed a 2.2% aggregate decrease for 2024, which would have been an aggregate decrease of $375 million.

Plus, the rule finalized a -2.890% adjustment, which is half of the cut originally proposed back in June.

“My initial reaction was that where we landed was an improvement over what was proposed,” Choice Health at Home CEO David Jackson told Home Health Care News. “I believe home health provides substantial economic upside for the Medicare program and for the beneficiaries. I continue to disagree with the methodology, as far as how it’s viewed as budget neutral.”


When the rule was first released, some providers felt that relief. But that quickly wore off.

“I quickly came to the stark realization that CMS still was continuing with deep cuts — albeit they were kicking them down the road — despite the prevalence of respected third-party data highlighting that cuts have made problems with access to care a reality, not just an assumption,” David Totaro, chief government affairs officer at Bayada Home Health Care, told HHCN.

Similar to Totaro and Jackson, other providers have voiced pushback to what they believe is CMS doubling down on its intention to implement the permanent adjustment cuts in the coming years.

Providers pointed out that even though the rule reduces a portion of the overall cut that CMS will be collecting next year, the total amount of the cut actually increased in the rule.

“According to their language in the rule, it is likely to increase again next year, when they continue to run these permanent adjustment calculations,” Andrew Baird, vice president of government affairs and policy counsel at Enhabit Inc. (NYSE: EHAB), told HHCN. “The fact that a smaller percentage of the cuts will be applied just in 2024 really is not much comfort, compared to CMS’ much larger commitment to a multi-year policy of continued permanent adjustment cuts.”

One of the more troubling aspects of the rule, cited by a number of providers, was what they believe is CMS’ flat out rejection of data and evidence, regarding patient access to home health, as well as the rising cost of care.

During the public comment period, a number of providers, industry stakeholders and advocacy associations cited data that painted a bleak picture of the struggles providers were already facing, and the ways that additional cuts would further disrupt access to care.

“It’s such a concerning posture from our regulators, because it just further creates this notion of a black box of policy generation, where only CMS insights and information are valid inputs in the overall process,” Baird said. “It really, ultimately, sort of begs the question, will any stakeholder data, will any stakeholder evidence, ever be sufficient for consideration by CMS in this process?”

Totaro also described CMS as seemingly “dismissive” of the data they received from various members of the home health industry. He also noted that CMS has yet to address the fact that home health care is underfunded.

“Instead, they are continuing to push a policy that proposes deep cuts year after year because of their interpretation of budget neutrality, creating serious long-term implications for the entire industry,” Totaro said. “Let’s not be fooled — while the net impact of the 2024 rule is a positive gain of 0.8%, it is solely due to a woefully low market basket update of 3.0%.”

Totaro offered mild praise for CMS’ continued focus on health equities, however.

“It’s good to know that we have the same goals and objectives to ensure that all marginalized populations have access to health policies, but that we just differ on how to get there,” he said.

Looking ahead, providers are determining what the final rule’s impacts will mean for business.

At Bayada, this may mean limiting investment into certain areas of the business, according to Totaro.

“In the short term, a 0.8% increase will not cover the increased expenses that we all have faced in the past year,” he said. “Longer term, the fact is that businesses hate indecision. With nearly $4 billion in clawback cuts still pending, without any idea when they might occur, our business will be hesitant to invest in innovation and expansion.”

For Enhabit, the focus will be on managing resources as efficiently and responsibly as possible while waiting to see what the fallout will be.

“At Enhabit, we’re going to continue delivering what we promise, which is providing a better way to care for every single patient wherever they call home in this country,” Baird said.

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