CMS Final Rule Reins in 2024 Rate Reduction, But Brings Big Cuts Beyond

HomeCare News

WASHINGTON—The Centers for Medicare & Medicaid Services (CMS) issued its 2024 Home Health Prospective Payment System Rate Update final rule on Nov. 1, landing on more moderate cuts than initially proposed but still enacting rate reductions beginning in 2025 that would present “serious concerns for the home health community,” according to the National Association for Homecare and Hospice.

The final rule calls for a -2.890% permanent adjustment in payment rates to home health agencies in calendar year 2024, half of the full permanent adjustment of -5.779%. The proposed rule called for a slightly lower overall permanent adjustment of -5.653%. CMS said that because the new rule only calls for half of the full permanent adjustment to go into effect in 2024, Medicare payment to home health agencies will increase by .8%, rather than the original 2.2% decrease initially proposed.

“This halving of the permanent adjustment is in response to commenter concerns about the magnitude of a single-year significant payment reduction,” CMS wrote in its announcement of the rule. “CMS will have to account for the remaining permanent adjustment not applied in CY 2024, and other potential adjustments needed to the base payment rate, to account for behavior change based on analysis at the time of future rulemaking.”

But NAHC said the cuts would still come to 6.533% over 2023 and 2024—with more to come in future years.

“We continue to strenuously disagree with CMS’s rate-setting actions, including the budget neutrality methodology that CMS employed to arrive at the rate adjustments,” said NAHC President Bill Dombi. “We recognize that CMS has reduced the proposed 2024 rate cut. However, overall spending on Medicare home health is down, 500,000 fewer patients are receiving care annually since 2018, patient referrals are being rejected more than 50% of the time because providers cannot afford to provide the care needed within the payment rates, and providers have closed their doors or restricted service territory to reduce care costs. If the payment rate was truly excessive, we would not see these actions occurring.”

“The fatally flawed payment methodology that CMS continues to insist on applying is having a direct and permanent effect on access to care,” Dombi continued. “When you add in the impact of shortchanging home health agencies on an accurate cost inflation update of 5.2% over the last two years, the loss of care access is natural and foreseeable.”

NAHC is currently suing CMS, saying the basis for its payment assumptions is flawed, and also pushing Congress to pass the bill S 2137, which would block the final rule.

“We now implore Congress to correct what CMS has done and prevent the impending harm to the millions of highly vulnerable home health patients that depend and will depend in the future on this essential Medicare benefit,” Dombi said. “We urge the Congress to support this bill and enact it into law before the end of the year. The 2024 rate cuts must not take effect” Dombi added.

The new rule also finalizes CMS’s proposals to:

• Rebase and revise the home health market basket
• Revise the labor-related share
• Recalibrate case-mix weights under the Patient-Driven Groupings Model (PDGM)
• Update low utilization payment adjustment thresholds, functional impairment levels and comorbidity adjustment subgroups for 2024
• Codify statutory requirements for disposable negative pressure wound therapy
• Establish payment rules for lymphedema compression treatment and home intravenous immune globulin

The rule also updates requirements for how often and when providers of durable medical equipment prosthetics, orthotics and supplies (DMEPOS) must contact beneficiaries before dispensing resupply items…

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Find the final rule at: https://www.federalregister.gov/public-inspection/2023-24455/medicare-program-calendar-year-2024-home-health-prospective-payment-system-rate-update-quality

Read a fact sheet on the rule at: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2024-home-health-prospective-payment-system-final-rule-cms-1780-f

Home Health Agencies Made The HHVBP Model Demonstration A Resounding Success

Home Health Care News | By Patrick Filbin
 
In the first six years of the Home Health Value‐Based Purchasing (HHVBP) Model demonstration, the nine participating states saved Medicare $1.38 billion, a 1.9% decline relative to the 41 non‐HHVBP states.
 
That’s according to a new study from the U.S. Centers for Medicare & Medicaid Services (CMS) that evaluated the first six years of HHVBP before the national expansion at the beginning of 2023.
 
The HHVBP Model was implemented to incentivize home health agencies to improve the quality of care they provide to Medicare beneficiaries.
 
The goal of the model is to link Medicare reimbursement to the quality of care, rather than just the quantity or volume of services.
 
CMS first adjusted Medicare payments by up to 3% in 2018, using home health agencies’ 2016 Total Performance Score (TPS). Payment adjustments increased each year, peaking at up to 7% in 2021.
 
With the nine-state trial in the rearview mirror, CMS’ study shows both positives and some negatives, with the HHVBP model.
 
While saving Medicare over $1 billion, providers under the HHVBP pilot also reported reductions in unplanned hospitalizations, skilled nursing facility use and gains in functional status for patients like mobility and self‐care.

The reductions in Medicare spending were largely driven by reductions in skilled nursing facility services ($235.8 million decrease), inpatient hospitalization stay ($807.0 million decrease) and home health spending ($283 million decrease).
 
Home health agencies in HHVBP states also received higher TPS scores than agencies in non‐HHVBP states for each of the six years.
 
Agencies reported modest improvement in patients’ mobility, the management of medications and self‐care due to the value-based model. A higher number of patients were discharged into the community rather than institutional care in the HHVBP model.
 
Room for improvement
 
While the value-based model showed improvements in nearly every OASIS-based quality measure, agencies did report an increase in outpatient emergency department (ED) visits.

“We examined additional utilization measures and found HHVBP led to cumulative declines in SNF use and ED use followed by inpatient admission, but there was no cumulative impact of HHVBP on overall ED use,” CMS wrote in its study. “Together, these results suggest that the increase in outpatient ED use attributed to HHVBP is related to the reduced likelihood of ED use followed by an inpatient hospital stay.” 

Lymphedema Compression Treatment Items

Starting January 1, 2024, Medicare will pay for lymphedema compression treatment items for Medicare Part B patients.

What’s Covered?

We’ll pay for standard and custom-fitted lymphedema compression treatment items for each affected body part, including:

• Compression garments, including those for daytime and nighttime, which offer different levels of compression
• Compression bandaging systems and supplies provided during the initial decongestion phase and maintenance phases of treatment
• Gradient compression wraps with adjustable straps
• Necessary accessories for gradient compression garments and wraps, including:
• Aids for putting on and taking off (donning and doffing) items for different body parts, like lower limb butlers or foot slippers that help patients put on compression stockings
• Fillers
• Lining
• Padding
• Zippers

How Often?

We pay for compression garments:

• Daytime: 3 garments every 6 months
• Nighttime: 2 garments every 2 years

We also pay for items, as needed:

• To replace lost, stolen, or irreparably damaged items
• If a patient’s condition changes, like a change in limb size

Who’s Eligible?

We’ll pay for these treatment items when:

• The patient has Medicare Part B coverage (their annual Part B deductible and 20% coinsurance will apply)
• The patient has lymphedema (a chronic condition that causes swelling in the body's tissues) and will use the item to primarily and customarily treat it
• An authorized practitioner prescribes the item

Can I Furnish These Items?

You must be an enrolled DMEPOS supplier to get Medicare payment for furnishing these treatment items. Become a DMEPOS supplier.

What Are My Responsibilities?

When you furnish a lymphedema compression treatment item, you’re responsible for all aspects of providing the item, unless you work out an arrangement with a professional fitter to perform the services. This includes:

• Taking measurements of the patient’s affected body area
• Performing necessary fitting services
• Training the patient how to take the treatment item on and off
• Showing the patient how to take care of the treatment item
• Adjusting the treatment item, if needed

How Can I Bill?

Starting January 1, use new and existing codes in the January 2024 Alpha Numeric HCPCS File. We’ll publish the January file soon.

Where Can I Get More Information?

• Final Rule
• Section 4133 of the Consolidated Appropriations Act (CAA)
• Section 1834(j) of the Act

‘Worse Than People Can Imagine’: Medicaid ‘Unwinding’ Breeds Chaos in States

KFF Health News | By Phil Galewitz, Katheryn Houghton, Brett Kelman and Samantha Liss

More than two dozen people lined up outside a state public assistance office in Montana before it opened to ensure they didn’t get cut off from Medicaid.

Callers in Missouri and Florida reported waiting on hold for more than two hours on hotlines to renew their Medicaid coverage.

The parents of a disabled man in Tennessee who had been on Medicaid for three decades fought with the state this summer to keep him enrolled as he lay dying from pneumonia in a hospital.

Seven months into what was predicted to be the biggest upheaval in the 58-year history of the government health insurance program for people with low incomes and disabilities, states have reviewed the eligibility of more than 28 million people and terminated coverage for over 10 million of them. Millions more are expected to lose Medicaid in the coming months.

The unprecedented enrollment drop comes after federal protections ended this spring that had prohibited states from removing people from Medicaid during the three pandemic years. Since March 2020, enrollment in Medicaid and the related Children’s Health Insurance Program had surged by more than 22 million to reach 94 million people.

The process of reviewing all recipients’ eligibility has been anything but smooth for many Medicaid enrollees. Some are losing coverage without understanding why. Some are struggling to prove they’re still eligible. Recipients and patient advocates say Medicaid officials sent mandatory renewal forms to outdated addresses, miscalculated income levels, and offered clumsy translations of the documents. Attempting to process the cases of tens of millions of people at the same time also has exacerbated long-standing weaknesses in the bureaucratic system. Some suspect particular states have used the confusing system to discourage enrollment.

“It’s not just bad, but worse than people can imagine,” said Camille Richoux, health policy director for the nonprofit Arkansas Advocates for Children and Families. “This unwinding has not been about determining who is eligible by all possible means, but how we can kick people off by all possible means.”

To be sure, some of the Medicaid recipients who signed on to the program when the U.S. unemployment rate soared amid covid-19 lockdowns have since gotten health insurance through new jobs as unemployment dropped back to pre-pandemic lows.

And some of the disenrolled are signing up for Affordable Care Act marketplace plans. Centene CEO Sarah London, for example, told investors on Oct. 24 that the health care giant expected as many as 2.4 million of its 15 million Medicaid managed care members to lose coverage from the unwinding, but more than 1 million customers had joined its exchange plans since the same time last year.

Still, it’s anyone’s guess how many former Medicaid beneficiaries remain uninsured. States don’t track what happens to everyone after they’re disenrolled. And the final tallies likely won’t be known until 2025, after the unwinding finishes by next summer and federal officials survey Americans’ insurance status…

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