Payment Cuts Are Having A Compounding, Dire Effect On The Home Health Industry

Home health providers’ fight against cuts to fee-for-service Medicare payment has become a year-by-year battle. But the yearly cuts are compounding, which is exactly what industry advocates are trying to illustrate to Congress prior to the next payment rule proposal. 

Since the adoption of the Patient-Driven Groupings Model (PDGM) in 2020, the Centers for Medicare & Medicaid Services (CMS) has cut home health payment by $19 billion through 2029, according to a new analysis conducted by the Partnership for Quality Home Healthcare (PQHH) and the National Association for Home Care & Hospice (NAHC).

Many of the cuts CMS has implemented are permanent, and multiple cuts on top of each other moving forward – plus unsatisfactory adjustments for inflation – are putting significant pressure on providers.


For instance, CMS finalized a 0.8% increase to aggregate payments for 2024 last fall. But in actuality, the agency implemented another permanent prospective adjustment of -2.890%. The year prior, a -3.925% cut was implemented.

Future cuts paint a bleak outlook for providers, which is what NAHC and PQHH are trying to educate lawmakers on.

“One of things we wanted to make sure that we could showcase to Congressional allies was how much home health really has been cut,” PQHH CEO Joanne Cunningham told Home Health Care News. “Providers are suffering and feeling such stress, and having difficulty maintaining their status to deliver care and fulfill their missions. We started off PDGM with a sizable cut. The cuts that have been implemented since then are permanent, they don’t go away. The chart illustrates the stacking effect of these cuts. Then, we projected what we know is coming with future cuts.”


Though this year will be a hectic one in Washington, D.C., due to it being an election year, Cunningham believes that will actually work in providers’ favor.

It will mean that lawmakers have their ears to the ground on the most pressing issues facing their constituents, she said.

“This is the causation,” Cunningham said. “And why we’re seeing the access-to-care issues that patients are experiencing.”

As Cunningham noted, CMS has stated that it will continue to phase in cuts moving forward.

Providers are set to get far less reimbursement for their services in the future.

All the while, more of their patients than ever are under Medicare Advantage (MA) plans. MA tends to already pay far less for home health services compared to fee-for-service Medicare.

“It’s concerning,” Cunningham said. “And it is something that is contrary to what most policymakers want, what most Americans want, what most Medicare beneficiaries want and families want. It is a disconnect. But the good news is that lawmakers seem to understand that.”

What’s more, CMS has also teased future payment clawbacks for perceived overpayments to providers in the past.

Specifically, CMS believes it overpaid by $873 million in 2020, $1.2 billion in 2021 and $1.4 billion in 2022.

Those clawbacks would throw gas onto an already uncontrollable fire for providers.

“The clawbacks are unconscionable,” Cunningham said. “These will be essentially clawbacks for payments that providers received for care that was delivered to patients in prior years. It is unthinkable that any policymaker would want to destabilize the Medicare home health program by instituting those clawback cuts.”

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