At a Glance: Decoding the CMS 2023 Home Health Final Payment Rule

The U.S. Centers for Medicare & Medicaid Services (CMS) recently released its FY 2023 Home Health Final Payment Rule on October 31, 2022. What’s in the new rule and what does it mean for providers?

Primary Impacts

The CMS final rule for 2023 includes an estimated increase to 2023 home health payments of 0.7 percent, or $125 million, compared with 2022.

According to the CMS final rule fact sheet, CMS is also “finalizing a methodology to determine the impact of differences of assumed and actual behavior changes on aggregate expenditures, as well as a permanent prospective payment adjustment to the home health 30-day period payment rate to account for any increases or decreases in aggregate expenditures.” These changes are driven by PDGM and the Bipartisan Budget Act of 2018.

CMS had previously proposed a cut of 4.2 percent to 2023 payments, which would have been one of the steepest Medicare cuts in years. The previously proposed cuts were the first part of a total 7.69 percent payment cut to Medicare home health services beginning in 2023, as well as clawback cuts totaling $2 billion beginning in 2024 for services already provided during the first two years of the pandemic.

An analysis by the National Association for Home Care & Hospice (NAHC) found that 51 percent of agencies were in danger of going in the red under the proposed payment cuts. After strong opposition from home health providers and advocacy organizations citing the impact on older adults and their bottom line, CMS has reversed course—at least for now.

Quality and Innovation

The new final rule ends temporary suspension of OASIS data collection on non-Medicare and non-Medicaid patients, and HHVBP will be implemented nationwide starting on January 1, 2023, as expected.

CMS will also begin collecting information on the use of telecommunications technology on home health claims in order to analyze the characteristics of beneficiaries utilizing remote services. This could provide insight into the social determinants of health, which influence who benefits most from those services and what barriers exist for differing subsets of patients. CMS will collect voluntarily starting on January 1, 2023, and collecting becomes mandatory on July 1, 2023. Program instruction will be issued in January of 2023.

Pushback and Concerns

Despite the reversal by CMS of its initially proposed steep payment cuts, many home health agencies and advocacy groups have expressed concern about the methodology used to arrive at the rate adjustments in the 2023 final rule.

According to Home Health Care News, NAHC released a statement disagreeing with that methodology. “In no way are these adjustments consistent with logic or the Medicare law on budget neutrality in the transition from the 2019 payment model to PDGM in 2020,” said NAHC President William A. Dombi.

Home Health Care News also reported pushback from AccentCare CEO Steve Rodgers, who said, “The final rule should be viewed for what it is, which is nothing more than CMS adjusting payments for home health services by applying post-2020 provider behaviors to pre-2020 reimbursement methods. Rather than ensuring the payment amounts are budget neutral, CMS’ actions constitute an unauthorized rebasing of the home health payment amount, which will lead to patient access issues for the Medicare benefits they are entitled to under law.”¹

The Bottom Line

The CMS 2023 final rule is better news for home health agencies than initially expected, but major concerns exist about whether the CMS payment adjustment methodology is consistent with the Medicare law on budget neutrality and will allow proper access to care over the long term.