The U.S. Centers for Medicare & Medicaid Services (CMS) released its CY 2025 home health final payment rule Friday.

It comes with an estimated aggregate increase to 2025 home health payments of 0.5%, or $85 million, compared to 2024 aggregate payments. But another permanent cut will be implemented in the new year.

“CMS estimates that Medicare payments to HHAs in CY 2025 would increase in the aggregate by 0.5%, or $85 million, compared to CY 2024,” the agency wrote in its fact sheet. “This rule finalizes a permanent prospective adjustment of -1.975% (half of the calculated permanent adjustment of -3.95%) to the CY 2025 home health payment rate to account for the impact of implementing the Patient-Driven Groupings Model (PDGM). … For CY 2023 and CY 2024, CMS previously applied a 3.925% reduction and a 2.890% reduction, respectively, which were half of the estimated required permanent adjustments.”

In June, CMS proposed a 1.7% decrease in payments for 2025, or an about $280 million aggregate reduction compared to 2024 levels. Within that proposal was also a permanent prospective adjustment to the CY 2025 home health payment rate of -4.067%.

As detailed above, CMS is finalizing a permanent prospective adjustment of -1.975% to the CY 2025 home health payment rate, short of what was proposed in the spring.

It is the third straight year that CMS has implemented permanent cuts to home health payments.

“Somehow CMS sees reduced access to home health services, the closures of hundreds of home health agencies, tens of millions fewer home health visits, and a reduction in overall Medicare spending on home health services as ‘budget neutral,’” National Alliance for Care at Home CEO Steven Landers said in a statement shared with Home Health Care News. “While decreasing the proposed permanent rate cut and withholding the massive temporary adjustment may slow the decline of the home health benefit a bit, we need CMS to reverse course on its dismantling of these essential services through its payment model. A net increase in Medicare spending projected for 2025 does not address the several years of unwarranted rate cuts and the shortfall in recognizing the significant inflationary pressures and cost increases that have been incurred. In no way can CMS defend its actions as ‘budget neutral.’ Home health access is a life and death issue for vulnerable homebound beneficiaries.”

The full fact sheet on the final rule can be viewed here.

Providers began to weigh in on Friday as well, including AccentCare, one of the largest home health organizations in the country.

“CMS continues its efforts to compromise the Medicare home health benefit, resulting in a substantial decline in access to high-quality, cost-effective home care,” an AccentCare spokesperson told HHCN. “Although the administration has repeatedly expressed support for home care, CMS’ decision to impose further cuts to home health payments suggests otherwise. Congress directed CMS to reform the home health payment system and maintain budget neutrality during that process. Yet, year after year, CMS has failed to follow the rules. It is time for Congress to step in and prevent the further erosion of the Medicare home health benefit.”

Based in Dallas, AccentCare has more than 250 locations across 32 states and the District of Columbia.

Other changes included

CMS finalized a number of other changes in the rule, some payment-related, and some not.

For one, CMS said it is finalizing updates to the Conditions of Participation (CoPs) to reduce “avoidable care delays.” It will do so by setting a standard for home health providers, the agency said, to ensure that referring entities and prospective patients can select the “most appropriate” provider based on their care needs.

That standard will now require home health providers to develop, implement and maintain – through an annual review – a “patient acceptance-to-service policy” that is applied to each prospective patient.

“We are finalizing a requirement that the policy must address, at a minimum, the following criteria related to the HHA’s capacity to provide patient care: the anticipated needs of the referred prospective patient, the HHA’s caseload and case mix, the HHA’s staffing levels, and the skills and competencies of the HHA staff,” CMS wrote.

Referral rejection rates have skyrocketed in home health care over recent years, mostly due to home health providers’ inability to staff cases. Providers generally blame home health cuts in traditional Medicare, as well as inadequate Medicare Advantage payment, for those rejection rates.

“This final rule does not prevent HHAs from maintaining their existing acceptance-to-service policies; rather, it is intended to complement them,” CMS continued. “Additionally, CMS is finalizing that HHAs must make available to the public accurate information regarding the services offered by the HHA and any service limitations related to types of specialty services, service duration, or service frequency.”

CMS also finalized changes to Low-Utilization Payment Adjustments (LUPAs) and OASIS.

“With sufficient recent claims data available, and to establish equitable compensation for all home health services, CMS proposed to establish a definitive occupational therapy (OT) specific LUPA add-on factor and discontinue the temporary use of the physical therapy (PT) LUPA add-on factor as a proxy,” CMS wrote. “We are finalizing the establishment of the OT LUPA add-on factor with the same methodology used to establish the skilled nursing (SN), physical therapy (PT), and speech-language pathology (SLP) LUPA add-on factors.”

In regards to OASIS, CMS is finalizing a “crosswalk for mapping OASIS-D data elements to the equivalent OASIS-E data elements.”

OASIS-E was implemented on Jan. 1, 2023, and lined up with the nationwide expansion of the Home Health Value-Based Purchasing (HHVBP) Model.

Broadly, CMS is updating its systems for OASIS-E moving forward. In addition, 13 items on the OASIS-E are “no longer required to be asked at a follow-up visit.”

Finally, CMS introduced additional oversight measures for the home health industry, which has been marred by a few bad actors over the years.

“CMS is adding providers and suppliers that are reactivating their Medicare billing privileges to the categories of new providers and suppliers subject to a provisional period of enhanced oversight (PPEO),” the agency wrote. “CMS may impose a PPEO for 30 days to one year for new providers and suppliers. The goal of a PPEO is to reduce and prevent fraud, waste and abuse.”