Industry Update: Understanding the Home Health Final Rule 2024

On November 1, 2023, CMS released their CY 2024 Home Health Final Rule, which included updates and policy changes for home health agencies effective January 1, 2024. Here’s our takeaways from the home health final rule 2024 and its implications for home health agencies.

Better Than the Proposed Rule

Home health payments saw a significant rate improvement in the Proposed Rule, finalizing a modest increase of 0.8 percent, or $180 million overall, compared with home health payments in 2023. Home health services base pay will increase from $2,010.69 in 2023 to $2,038.13 in 2024. The Final Rule also partially mitigated the proposed permanent -5.65 percent behavioral adjustment, but still finalized a -2.89 percent permanent downward adjustment. 

The increase to reimbursement is being met with opposition from home health agencies due to rising labor costs, inflation and other financial pressures that continue to challenge the industry. Advocates are continuing to push Congress to move away from the Balanced Budget Act and enact legislation that pays fairly for home-based services by supporting the “Preserving Access to Home Health Act of 2023” (House bill, Senate bill). 

Updates to the Home Health Value-Based Purchasing Program (HHVBP)

CMS continues to develop value-based purchasing for home health in the Final Rule, recently releasing information on the demonstration model’s performance in nine states before the national roll-out in 2023. The study showed that HHVBP saved 1.9 percent, or $1.38 billion, relative to the non-demonstration states, which is an important success metric.

CMS finalized three changes in HHVBP taking effect January 1, 2025, which will:

• Replace the two Total Normalized Composite Measures (for self-care and mobility) with the Discharge Function Score 
• Replace the OASIS-based ‘Discharge to Community’ (DTC) measure with the claims-based ‘Discharge to Community-Post Acute Care’ (PAC) measure for home health agencies
• Replace the claims-based ‘Acute Care Hospitalization During the First 60 Days of Home Health Use’ and the ‘Emergency Department Use Without Hospitalization During the First 60 Days of Home Health’ measures with the claims-based ‘Potentially Preventable Hospitalization’ measure

CMS also included a reminder for HHAs and other stakeholders that public reporting of HHVBP performance data and payment adjustments will begin in December 2024.   

Updates to Quality Measures 

CMS finalized two new quality measures in the home health Final Rule 2024, impacting the Home Health Quality Reporting Program (HHQRP) starting January 1, 2025:

• COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date (Patient/Resident COVID-19 Vaccine) measure
• Functional Discharge Score (DC Function) 

Hospice Special Focus Program

CMS also finalized a Special Focus Program for hospice. This would consider the lowest performing 10 percent of Hospices for participation in the program, which aims to improve the quality of patient care for Medicare beneficiaries. 

Read more changes in the rule at the 2024 Home Health Final Rule and Fact Sheet at the federal register, and check back here for more home-based care regulatory updates as we approach the new year.