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The Centers for Medicare & Medicaid Services (CMS) issued a regulation raising home healthcare payments by 0.8%, or $140 million, for the year 2024.
The unpublished rule stated, “The $140 million increase in estimated payments for CY 2024 reflects the effects of the CY 2024 home health payment update percentage of 3% ($525 million increase), an estimated 2.6% decrease that reflects the effects of the permanent behavioral assumption adjustment ($455 million) and an estimated 0.4% increase that reflects the effects of an updated FDL ($70 million increase).”
CMS believes that this rate increase is necessary to comply with statutory payment authority for home health care.
The Biden administration recommended a 2.2% reduction in payments to home health agencies in July. This equates to a decrease of almost $375 million from 2023’s payment levels. It also recommended decreasing home health fees by $460 million. Since this drop may have been “too burdensome” for many suppliers, CMS has instead settled on a cut of -2.89% for home health services.
The Federal Register will announce the proposed rule on November 13, and it will go into effect on January 1, 2024.
Several organizations that support home health care have voiced concerns about the national impact of the rule’s final implications.
CEO Joanne Cunningham expressed that both patients and healthcare professionals have articulated the existing challenges in accessing and delivering home health services. These challenges stem from years of ongoing Medicare reductions, a significant deficit in staffing, and the persistent increase in inflation.
Cunningham conveyed a sense of perplexity about the disconnect in this situation. Given the escalating costs associated with labor and inflation, coupled with the nationwide healthcare workforce dilemma that home health providers are grappling with, any reduction in funding for home health services would only worsen the difficulties. To provide perspective, the rule’s finalization only grants a year-over-year increase in the base rate of less than $1 per day for the care of Medicare’s most critically ill patients. She added that while CMS is slightly postponing the commencement of the permanent reduction for the upcoming year, these financial cutbacks will still impact the home health sector in the subsequent years.
The Partnership claimed to have informed CMS of quantitative and anecdotal evidence demonstrating patients’ access difficulties and predicting further issues as a result of the proposed modifications. Cunningham pleaded with legislators to prevent funding cuts to home health care.
According to NAHC President William A. Dombi, their firm disagreement with CMS’s rate setting decisions, specifically the budget neutrality methodology employed by CMS for determining the rate adjustments, remains unwavering. He acknowledged that CMS has diminished the initially proposed rate reduction for 2024.
However, he also pointed out the trend of reduced spending on Medicare home health services. Since 2018, there has been a significant decrease in the number of patients receiving care, amounting to 500,000 fewer annually. Furthermore, patient referrals are experiencing a rejection rate exceeding 50% because service providers find it financially unsustainable to offer the necessary care within the existing payment rates. Consequently, numerous providers have either ceased operations or limited their service areas in an effort to control care-related expenses.