2023 Home Health Final Rule Released
The 2023 Home Health Final Rule was released yesterday, making it a scarier than usual Halloween. The news, which was originally heralded by some news outlets as a victory for home health, is not as great a cause for celebration as first purported. APTA Home Health will have a deeper analysis of the rule in the next House Call, but below is a quick analysis.
The overall permanent adjustment is worse than proposed (i.e., 7.85% vs. 7.69%). However, to help mitigate the impact of the cuts during the first year of implementation, the 2023 cuts will be 3.925% (half of the full cuts). That's the bone that CMS is throwing the industry. Additionally, the Market Basket update (MB) was increased by .7% to 4.0% instead of the proposed increase of 3.3%.
Bottom Line: We got some relief for calendar year CY2023 only (but they increased the overall permanent adjustment from 7.69 to 7.85%) and the temporary adjustments (“clawback”) still loom. CMS has NOT changed their methodology regarding behavioral assumptions at all. Without further legislation, this rule will set in motion massive cuts that will have long term negative consequences for HH.
However, this is far from being over. There will still be a push for legislation and an omnibus bill to stop the clawback following the national elections and before the end of the year and moving into 2023 if necessary – which is the most likely scenario.
Important text from the rule:
“…we are finalizing our proposed behavioral adjustment methodology to reflect the impact of differences between assumed behavior changes and actual behavior changes on estimated aggregate payment expenditures under the HH PPS. We are also finalizing a -3.925 percent permanent payment adjustment for CY 2023 (half of the proposed - 7.85 percent adjustment), as we recognize the potential hardship of implementing the proposed full permanent adjustment in a single year…
“The overall economic impact related to the changes in payments under the HH PPS for CY 2023 is estimated to be $125 million (0.7 percent). The $125 million increase in estimated payments for CY 2023 reflects the effects of the CY 2023 home health payment update percentage of 4.0 percent ($725 million increase), an estimated 3.5 percent decrease that reflects the effects of the permanent behavioral adjustment (-$635 million) and an estimated 0.2 percent increase that reflects the effects of an updated FDL ($35 million increase)…
“. . . we considered other potential methodologies recommended by commenters to determine the difference between assumed versus actual behavior change on estimated aggregate expenditures in response to the comment solicitation in the CY 2022 HH PPS proposed rule (86 FR 35892). However, most of the recommended alternate methodologies controlled for certain actual behavior changes (for example, the reduction in therapy visits or LUPA visits) and this is not in alignment with our interpretation of the statute at section 1895(b)(3)(D)(i) of the Act, which requires CMS to examine actual behavior change and make temporary and permanent adjustments to the standardized payment amounts…
“Therefore, any method that would control for an actual behavior change affecting payment would be contrary to what is required by the Social Security Act. Additionally, we considered alternative approaches to the implementation of the permanent and temporary behavior assumption adjustments. As described in section II.B.2. of this rule, to help prevent future over or underpayments, we calculated a permanent prospective adjustment of - 7.85 percent by determining what the 30-day base payment amount should have been in CYs 2020 and 2021 in order to achieve the same estimated aggregate expenditures as obtained from the simulated 60-day episodes and are finalizing half of the determined adjustment which is - 3.925 percent for CY 2023. One alternative to the -3.925 percent permanent payment adjustment included taking the full -7.85 percent adjustment for CY 2023. However, due to the potential hardship to some providers of implementing the full -7.85 percent at once, we decided it would be more appropriate to take half the adjustment resulting in a -3.925 percent permanent payment adjustment for CY 2023…
“However, we note the permanent adjustment to account for actual behavior changes in CYs 2020 and 2021 should be -7.85 percent. Therefore, applying a -3.925 percent permanent adjustment to the CY 2023 30-day payment rate would not adjust the rate fully to account for differences in behavior changes on estimated aggregate expenditures during those years. We would have to account for that difference, and any other potential adjustments needed to the base payment rate, to account for behavior change based on data analysis in future rulemaking. Another alternative would be to delay the full permanent adjustment to a future year. However, we conclude that delaying the full permanent adjustment would not be appropriate, as this would further impact budget neutrality and likely lead to a compounding effect creating the need for a much larger reduction to the payment rate in future years.”
We’re still in this fight and member advocacy will continue to be as important as ever! Voices need to be heard when methodology is being applied improperly at the expense of patients/clients and those who serve them, and all of our voices count. The responsibility of advocacy can't be left to the administrators of agencies only. Stay tuned! |
