Biden Administration Urges Judge To Throw Out NAHC’s Home Health Payment Lawsuit

In July, the National Association for Home Care & Hospice (NAHC) filed a lawsuit against the U.S. Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of Health and Human Services over home health payment cuts. 

On Dec. 15, the Biden administration responded by asking a federal judge to throw out that lawsuit, in a move that NAHC considered a predictable outcome.

“The government’s position in responding to the NAHC lawsuit, as set out in its December 15 brief, was fully expected,” NAHC President William A. Dombi said in a statement shared with Home Health Care News. “Virtually every lawsuit against Medicare includes an effort to dismiss the case on the grounds that the court does not have the power to adjudicate the complaints.”


The lawsuit, pertaining to CMS’ home health payment methodologies, was put forth when NAHC felt like it had “no other option left.” After continued advocacy in Washington, D.C., and attempts at legislation over the previous two years, NAHC felt legal means had to be pursued.

In 2022, CMS finalized permanent cuts to home health payments. It did the same in 2023.

HHCN has previously broken down some of the viable legal arguments against CMS’ continued cuts to home health payments.


“We continued our conversations, discussions and advocacy with CMS in hopes of seeing something happening in the proposed rule that was issued last week,” Dombi said in July when the lawsuit was filed. “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.”

Broadly, NAHC is alleging that CMS and HHS have applied an invalid and unlawful approach to determining home health payments.

“We would be looking to the court to provide some guidance on what that compliant methodology would be,” Dombi also said in July. “In our own analysis, we believe that providers of home health have been underpaid as it relates to budget neutrality. At minimum, we would expect to see the rate cuts from 2023, that were permanent readjustments to the base rate, and the one proposed for 2024, along with the temporary adjustments … to go away. The end product of that is that we would have a stable system to deliver home health services to Medicare beneficiaries.”

A breakdown of the brief

There are a few takeaways from HHS’ plea to a federal judge to get the lawsuit thrown out.

– “As a threshold matter, this case should be dismissed for lack of subject-matter jurisdiction. In 42 U.S.C. § 1395fff(d), Congress expressly provided that ‘[t]here shall be no administrative or judicial review’ of challenges to certain aspects of the administration of the Home Health Prospective Payment System.”

– “Even if review were not precluded, the Court lacks jurisdiction for the independent reason that NAHC’s members have failed to exhaust their administrative remedies, as they must to obtain judicial review under the Medicare statute. Under 42 U.S.C. § 405(h), incorporated into the Medicare statute by 42 U.S.C. § 1395ii, ‘[f]ederal subject matter jurisdiction over claims arising under the Medicare statute is permitted only upon the completion of the administrative process outlined in that statute and its implementing regulations.’”

While those are more high-level legal arguments, HHS also took aim at NAHC’s argument specifically.

– “NAHC’s insistence that CMS is required to pay home health agencies that same projected $16.6 billion each year for some indeterminate amount of time is not supported by the statute. Nor does it make sense. If overall usage of home health services in Medicare drops precipitously or home health agencies decide to provide fewer services for the same spell of illness, under NAHC’s theory, CMS should still pay home health agencies collectively $16.6 billion — a windfall for the industry. But under that same theory, if home health agencies provide more services for the same spell of illness, then CMS should still pay $16.6 billion — which would presumably draw a challenge from industry on opposite grounds.”

As mentioned previously, NAHC and Dombi were expecting this initial response.

“Medicare is simply trying to avoid getting the court to focus on the actual merits of our lawsuit,” Dombi said Tuesday. “We will have our day in court where we will establish that Medicare has violated the law with the payment rate cuts. That law requires that the PDGM payments result in ‘budget neutral’ spending on home health services. Reduced Medicare spending, never-ending roadblocks to access to care, and closures of home health agencies does not equal budget neutrality for patients or providers.”

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