CHAP Synopsis of Calendar Year 2025 Home Health Prospective Payment System

The proposed Calendar Year (CY) 2025 Home Health Prospective Payment System (HH PPS) Rate Update; HH Quality Reporting Program Requirements; HH Value-Based Purchasing Expanded Model Requirements; Home Intravenous Immune Globulin (IVIG) Items and Services Rate Update; and Other Medicare Policies proposed rule (CMS-1803-P) was posted on the Federal Register Public Inspection desk on 6/2/2024. The comment period is 60 days from the publish date in the Federal Register. Instructions for submitting comments are included at the beginning of the rule.  Providers are strongly encouraged to review the rule in its entirety and submit comments to CMS. The process to submit comments is outlined at the beginning of the rule. 

Click to read the highlights of the proposed rule.  

[Updated] CMS Proposed Over 4% Cut to Home Health Medicare Payments in 2025

Home Health News | By Andrew Donlan

The U.S. Centers for Medicare & Medicaid Services (CMS) published its FY 2025 home health proposed payment rule [last]Wednesday. With it, the agency signaled that more significant cuts could be on the way for providers.

To rebalance the Patient-Driven Groupings Model (PDGM) and make it budget neutral, at least according to its internal methodology, CMS is proposing a permanent prospective adjustment to the CY 2025 home health payment rate of -4.067%.

For CY 2023 and CY 2024, CMS previously applied a 3.925% reduction and a 2.890% reduction, respectively.

“This adjustment accounts for differences between assumed behavior changes and actual behavior changes on estimated aggregate expenditures due to the CY 2020 implementation of the PDGM and the change to a 30-day unit of payment,” CMS wrote in a fact sheet on the proposed rule.

The CMS proposed rule includes a CY 2025 home health payment update of 2.5%, which is offset by an estimated 3.6% decrease related to the PDGM rebalancing and an estimated 0.6% decrease that reflects a proposed fixed dollar loss…

Continued cuts

Over the last few years, CMS has generally proposed large cuts, then finalized smaller cuts. But even when the cut is lowered between the proposed and final rule, providers lose out on those finalized cuts.

So, for instance, even a 1.7% cut may not appear very large. But an over 4% permanent cut is extremely significant.

Additionally, CMS also mentioned the clawbacks it intends to collect from the industry for perceived past overpayments. Those now sit at about $4.55 billion.

“The Administration has repeatedly expressed its support for care in the home, recognizing it as a high quality, lower cost alternative to institutional care settings that expands access to Medicare beneficiaries in the location in which they prefer to receive care: Their homes,” Stacey Smith, the vice president of public policy at AccentCare, said in a statement shared with Home Health Care News. “The home health community has repeatedly offered solutions to CMS that would reduce spending, while at the same time maintaining payment levels for those agencies that deliver high quality care and play by the rules. Yet CMS persists in its mathematical gymnastics that will give rise to nothing short of inferior health outcomes, lower patient satisfaction and stranding at-risk, older adults in higher cost, institutional care settings.”…

In addition to the cuts, CMS is also proposing: a recalibration Adjustment (LUPA) system, including an occupational therapy LUPA add-on factor; further delineations for the home health wage index; and more…

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[Details can be found in the CMS fact sheet. The proposed rule is posted to the Federal Register here, with comments due August 26, 2024.]

Compared to Traditional Medicare, MA Does Not Generate Significant Savings for Members, Study Finds

McKnight’s Home Care | By Adam Healy
 
Though Medicare Advantage plans offer out-of-pocket spending limits and other perks, they may not reduce beneficiaries’ healthcare costs in a meaningful way, according to a new study published in Annals of Internal Medicine.
 
The researchers sampled 7,054 traditional Medicare enrollees and 1,544 beneficiaries who switched from traditional Medicare to MA. Those who switched saw their out-of-pocket healthcare expenditures decrease by $168 dollars, and total health expenses paid out of pocket drop by only 0.2%. Participants who had reported “catastrophic” financial burden as a result of healthcare costs in traditional Medicare — meaning their out-of-pocket healthcare expenses accounted for more than 40% of their income — experienced only a 0.7% decline in healthcare expenses.
 
Those who switched to MA also were slightly more likely to report being unable to pay medical bills, the study found.
 
“Our findings contrast with the notion that MA’s apparently more generous health insurance benefits lead to financial savings for enrollees,” the authors wrote.
 
Many beneficiaries switch from traditional Medicare to MA to receive better coverage at a lower cost, they noted. MA plans can offer additional benefits such as dental, vision and Special Supplemental Benefits for the Chronically Ill, including home-delivered meals, transportation and home modifications. Meanwhile, MA plans also have limits on out-of-pocket spending, which can further entice traditional Medicare beneficiaries.
 
Despite these perks, switching from traditional Medicare to MA did not yield significant cost savings for enrollees, the study found.
 
Still, MA penetration has skyrocketed in recent years. Today, more than half of Medicare-eligible beneficiaries are enrolled in an MA plan. The growing share of MA-enrolled beneficiaries has led to revenue challenges for home care providers. Many agencies report being reimbursed from MA payers as little as 60% of traditional Medicare’s rates for care. 

And cost management practices such as prior authorization have led to administrative roadblocks and payment bottlenecks for providers treating MA-aligned patients.

‘An Absurd Amount of Denials’: New Legislation Seeks to Streamline Access to Home Health Services, Improve Senior Care

Home Health Care News | By Robert Holly
 
A group of bipartisan lawmakers this week reintroduced legislation aimed at curtailing restrictive – and often flawed – prior-authorization processes within Medicare Advantage (MA).
 
As it has been to most other parts of health care, prior authorization has long been problematic for home health providers and patients. That’s been increasingly true as more insurers have started to adopt systems and processes that use predictive analytics and algorithms to guide their decision-making, too.
 
In the Senate, the legislation – the Improving Seniors’ Timely Access to Care Act – was introduced by Sens. Kyrsten Sinema (I-Ariz.), Roger Marshall (R-Kan.), Sherrod Brown (D-Ohio) and John Thune (R-S.D.). Companion legislation was likewise put forth in the House, led by U.S. Reps. Mike Kelly (R-Penn.), Suzan DelBene (D-Wash.), Larry Bucshon (R-Ind.) and Ami Bera (D-Calif.).
 
“Right now, too many older Americans enrolled in Medicare Advantage are forced to deal with unnecessary delays when seeking out [care],” Sen. Brown said in a statement. “We need to update the Medicare Advantage program so it works better, faster, and is more transparent for patients and providers.”
 
If passed, the Improving Seniors’ Timely Access to Care Act would increase transparency around MA prior-authorization requirements and their use. It would additionally establish an e-PA process for MA plans, including a standardization for transactions and clinical attachments.
 
By digitizing parts of prior authorization, the hope is that some decisions could be reached faster – even in real time.
 
The Alzheimer’s Association, AARP, the American Hospital Association, the American Academy of Hospice and Palliative Care, and LeadingAge are among the many health and senior care groups to support the legislation. 
 
“By removing unnecessary barriers that create delays in treatment, this meaningful bill will improve access to care for seniors and allow caregivers to spend more valuable time at the bedside with patients and less time on burdensome paperwork,” American Hospital Association Executive Vice President Stacey Hughes said in a statement…

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